Why Company Culture is More Important Than Ever
I have been thinking a lot about company culture and how the real estate industry is perceived. It has become painfully clear that we have a perception problem. And as we know…perception is reality. This was just played out in court in the Sitzer-Burnett commission trial. Whether the verdict is right or wrong, sadly, is irrelevant. The attorneys and defendants failed to prove their case. And the jury’s perception was that real estate brokers don’t act in the best interest of sellers.
It’s kind of funny when you think about it. Assuming that 1.5+ million real estate agents collude on anything. Brokers can’t even get their agents to agree to use the same programs and services offered in their company much less get them to agree on pricing. Managing real estate agents is like herding cats. They do exactly what they want in their daily business practices because they are independent contractors. The last thing on an agent or broker owner’s mind is ‘How can we collectively screw over our clients?’ They operate in a competitive environment, so they are going to do what they need to do to capture the client and that is dictated through negotiable pricing. But I’m preaching to the choir.
The leaders set the tone.
The broker and their leadership team are there to set the culture, ethics, and guiding principles, they train them in legal and best practices, and they provide tools and services, but ultimately it is up to the agent if they want to participate in any of it. Then it is up to the broker to determine if that agent remains a fit for the company culture. With the lawsuits and the chaos at NAR, the company culture of each brokerage has never been more important. Brokers have the opportunity to set the tone by charting the future to best serve the sellers and buyers.
Here is the definition of company culture from Chat GPT: “Company culture is a term that encompasses the shared values, goals, attitudes, and practices that characterize an organization. It is often described as the living, breathing persona of a company, capturing the norms, values, and behaviors that define the very character of the business.”
It’s tricky when the leader who drives the culture has to do hard things. But if the culture is sound and the reasons are made clear, people will understand. When leadership changes every few years, it becomes very difficult to align oneself with the mission. With every key person that leaves, a bit of the history and the culture goes with it. Institutional knowledge is what preserves culture.
To reveal the culture we must ask ‘Why does the company exist’? What is our mission? What difference do we make in our customer’s lives? What are the guiding principles of the organization? Do your employees and agents feel proud to be associated with your brand? Why are they loyal? Have you set the tone for the behavior of all associated with the company? Someone has to know and regularly share the why behind these questions. I would venture that while ‘money’ is in there somewhere, it is not the guiding principle behind the why. It’s about making people feel cared about and valued.
Back in the day, I worked for a company with a very clear internal barometer. When it was bought by a newly formed national conglomerate, things weren’t so clear. It was an opportunity to establish a strong culture in a new company, but I never felt a kinship with an established culture even though I worked there for many years. Their position was that they wanted to let the local companies they bought keep their culture, but with the local owners cashed out, the local culture dissolved. Over time the company’s actions were driven by the bottom line…no matter what. The people were only a means to an end. It evolved into ‘profit over purpose’.
Why establishing a local culture is worth the risk.
As a consultant, I have the luxury of peeking behind the curtain of brokerages and observing lots of different types of company culture. I have seen companies that have one person at the top driving culture and it sets a clear tone. Those that have multiple owners or boards tend to have a more muddied path.
While it’s risky to align a company behind one person’s beliefs and goals, it can be very rewarding to have such clear messaging. People like to align themselves with a clear goal and mission. Giant national companies put their trust in the local leaders who set the tone for the local culture as an extension of the parent company. Then when they decide to make a change with that leadership, they risk upsetting the established culture. It always strikes me as peculiar that national companies don’t understand the importance of their local leaders and often treat them as expendable. That just shows how out of touch they are with what draws people to and keeps them in a company. I’m not going to deny that people are out for themselves, but having a leader who embodies the culture gives people something to rally around.
Does your department pass the culture test?
When I first meet with a prospective client, I like to meet their broker owner(s) or key leadership. I can tell immediately how supportive they are of relocation and the client services. If they aren’t 100% supportive and behind the initiatives we discuss, then I know it will be an uphill battle. They may say the right things, but I get a gut feeling based on how they respond to some of my questions. It’s not that hard to tell if someone is all in or just going through the motions because it seems like the right thing to do.
Running a relocation department can be tricky if you don’t have a culture that supports it. The leaders like the revenue, but do they really support you? If leadership waivers in their support, the agents can smell it. If an agent runs to the broker screaming about a preferred referral fee due, do you have confidence that the broker will support you? If they don’t, you have received a clear message where you rank in importance. It’s not about taking sides, it is about them taking the time to understand the process so they can calm the agent down and explain what is happening so you can work through the issue.
How might you change the culture of your company towards your business lines?
Get a clear read from your leadership where you and your department fit into the company culture. You have to know where you are before you can address it properly.
Determine where you might back off on some touchy policies or procedures
Help your leadership navigate the current challenges and develop buyer programs
Assist with recruiting and retention at a time when agents are evaluating their future
Train the agents to articulate their value to the customer
Broaden your agent team opportunities
Engage all of your agents for business development assistance
Make sure your staff is treating the agents well
Share your successes and why you are a subject matter expert
Educate them on why the metrics and goals matter that you have to achieve
Help them understand the value of the service you provide to corporations and how that contributes to the economy
Uncover new sources of revenue to the benefit of the entire company
It’s not ‘them and us’! Be transparent and earn your agent’s and leadership team’s trust.
I have seen many companies where the relocation department is woven firmly into the fabric of the company culture. I assure you it didn’t happen overnight. It takes years of developing trust and creating a partnership that benefits all parties. If you aren’t embedded where you would like to be in the culture of your company, think about how you might change that and let me know how I might help.
“Culture is not an initiative. Culture is the enabler of all initiatives.” — Larry Senn, named the Father of Corporate Culture for conducting the world’s first research on company culture.
