WorkPuzzle

How ObamaCare Mandates Could Help Real Estate Hiring

As you may know, most of the ObamaCare mandates will  “kick in” over the next two years.  Of course, it is appropriate for real estate owners and managers to focus their attention on the impact this law has on their own businesses.

But what about other industries?  Until recently, I had not put much thought into how businesses in other industry sectors are wrestling with these impending changes.   But these changes are weighing heavily on business leaders in retail, restaurants, and service industries. 

While I feel for those struggling with these new directives (one of my business partners owns a large retail establishment), some good news may emerge from these changes --especially if your focus is hiring “new to real estate” agents over the next few years.  As the old saying goes, one man’s curse is another man’s blessing.

This angle on the healthcare issue was brought to my attention by John Sumser.  John is editor-in-chief of the HRExaminer Online Magazine and writes about Human Resource issues and recruiting from a broad perspective.  As he studied and wrote about the nature of the employment relationship, he discovered the following principle:

Workers who pay for their own benefits are significantly more mobile that those who don't.

This statement may seem self-evident after you read it, but it is surprisingly profound. As we’ve worked with hundreds of real estate hiring managers and thousands of real estate candidates over the last few years, I’ve come to the conclusion that this is the number one reason that high quality people choose not to pursue real estate careers. 

That may be changing.  

Not because real estate will be in a position to suddenly offer medical benefits, but because the competition (other non-real estate companies) will soon stop offering benefits.   Here is an excerpt from an article that John recently wrote on this topic:

“I had a chance to catch up with some friends who are at the bottom of the system. Both work in retail. Both are part-time students. Both work hard and creatively. Both are noticing weird behavior from their employers.

They work in different cities in different parts of retail.

Since the first of the year, managers have been rotating and schedules have been shifting. As the noise settles down, the managers are slotting 50-hour weeks while the rest of the store works 27 to 30 hours.

In both cases, this amounted to a 20% cut in pay and a potential loss of benefits. (Their benefits are still intact but won’t remain so when the next ‘look back’ happens.) Very little is explained.

From their [point of view], it looks like management is lurching.

Their companies are maneuvering through the challenge of figuring out who does and doesn’t get benefits. Since it’s over their pay grade, they only understand the bluntest impacts of the story.

Ultimately, they will end up paying for their own health insurance.

It’s not really a surprise. While it is a momentary inconvenience, what happens next is pretty obvious. While their employers have figured out how to dodge this bullet, they only get a temporary reprieve.

Workers who pay for their own benefits are significantly more mobile that those who don’t. Up until last year, a worker who got sick (or had a family member who got sick) was bound to the current employer for a very long time. Pre-existing conditions made a whole range of people uninsurable if they left the current boss.

Now, after the first initial pinch, these low level workers are freer than they’ve ever been...

The employers who recognize this short-term windfall will end up paying for their employees healthcare in the long haul. Workers who get saddled with new bills seem to always want raises.

The interesting question is whether the employers who dodge this first bullet really understand that they are creating an attrition problem that will be accompanied by wage increases.

It doesn’t look like it. They are predictably going for the short money.”

I think there are two take-aways for the real estate industry from John’s insight:

1.  Learn how to talk about medical benefits.  Ask open-ended questions about the candidate’s medical benefit situation during the interview—especially if the candidate is from one of the industries being impacted by the ObamaCare changes.  In the past, this topic was often avoided because it opposed a short-term disadvantage of working as a real estate agent.  Now the playing field is more level and a real estate career still offers significantly more income potential than traditional jobs.

2. Develop transition programs.  Find ways to help people transition from the jobs where they recently lost their benefits to a real estate agent position.  We hear frequently from our clients…”We only want to hire full-time agents.”  That’s fine, but there is window opening in the employment world where a quick transition from part-time to full-time may look compelling to many talented individuals.  Rigidly hanging onto the full-time only model may cause you to miss engaging many talented individuals who will be looking at the real estate industry for the first time.

Question:  Have you recently interviewed someone who has brought up the issue of medical benefits?   What did you learn from the interaction? 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Why "Career Seminars" Will Always Be Inferior to One-on-One Interviews

One of the questions we often get from hiring managers is:

“Are one-on-one interviews really necessary in the real estate hiring process?”

What’s implied in this question (and usually comes out later in the discussion) is that it might be more efficient to conduct group interviews with several candidates at once rather than one-on-one interviews.

The line of reason is that interviews take a lot of time, and many early stage candidates are not serious about making a career change.  The group interview is a great way to “weed-out” those who are not truly interested or unqualified.

In a real estate company, this “group interview” usually takes the form of a career seminar.  It typically is an informational meeting where the company describes the benefits of changing careers and becoming a real estate agent.  At the end of the meeting, there’s typically some call to action (sign-up for licensing school, schedule a follow-up meeting with a hiring manager, etc.) that encourages the candidate to move forward in the process.

For years, we’ve recommended not using this methodology for interfacing with the majority of candidates.  There is nothing wrong with running an occasional career seminar for those who truly want information about a real estate career.  However, using this tool as a replacement or precursor to one-on-one interviews has not proven to be a best practice for recruiting high quality individuals.

Outside of the empirical data that we collected on this topic (ie. most real estate companies consistently hire 40% to 60% “D” performers using traditional hiring techniques such as career seminars), I could not put my finger on the psychology of why the “group interview concept” was inferior until last week.  I found this insight in an odd place—a coaching article written by Ed Batista.

I’ve read Ed Batista’s blog for several years, but I usually gain insight from a coaching perspective, not a recruiting perspective.   Ed is a successful executive coach and an instructor and leadership coach at the Stanford Graduate School of Business.  His business is coaching, but in the process of explaining coaching concepts he reveals a lot about the psychology of people.

The particular blog that peaked my interest was titled:  Spending Attention.  In this discussion, Ed makes the point that focused attention is one of the most powerful forces made available to human beings—both from a giving and receiving perspective.

“Focused attention is our most precious resource, because 1) it's extremely taxing on our intellectual and emotional capabilities, 2) it can have a amazingly powerful effect on its object, and 3) it can't be subdivided. (We can pay continuous partial attention to multiple objects simultaneously, but we can truly focus on only one object at any given moment.)

Much of what I do as a coach and as an experiential educator at Stanford involves nothing more than devoting my full attention to another person. This is somewhat easier in a one-on-one coaching session with a client or student, and it's somewhat harder in a group setting, but under any circumstances it's a challenging task that's almost always worth the effort.”

So, what does this have to do with interviewing?  There’s something  powerful that happens to an individual when they receive another person’s full attention.  Ed puts it this way:

“… devoting our full attention to someone can be a novel experience for both of us that in and of itself stimulates something useful in the interaction. The other person feels seen, heard, recognized, validated, appreciated or challenged in ways that partial attention never generates. And as we momentarily quiet our inner voice, we suddenly become aware of so many things that we missed before--not only about the other person and our environment, but also about ourselves. The subtler, more elusive thoughts and feelings that are usually drowned out by the louder currents can now be heard.”

It’s obvious that humans crave focused attention.  In the hiring process, the best chance of making this happen is in a one-on-one interview. 

By the way, just because a person is sitting across the desk from you, doesn’t mean focused attention will happen (read the rest of Ed’s blog to learn more about how you can become effective at giving focused attention). 

But, focused attention is almost guaranteed NOT to happen in a group interview/career seminar setting.

A high quality candidate wants and deserves the focused attention of the hiring manager during the hiring process.  If this element is missing, the high quality candidates will exit the hiring process. 

When the high quality candidates leave the hiring process, all you’re left with are desperate candidates who believe they deserve no better than a career information session. 

Of course there are exceptions to this rule (I’m sure some of you will write me about how you hired your best agent ever through a career information session), but you won’t win the hiring game by betting on the exceptions.  In the long run, the time and effort you put into one-on-one interviews will pay off.

Question:  What techniques have you found effective in making candidates feel they have your focused attention during an interview?

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Making Your Interviews Memorable (For the Candidate)

Over the last couple of years, we’ve written more than 40 blogs that that cover the topic of interviewing.  While there is much research available on this topic, some of the best ideas and insights have come from our readers.  Today, I’d like to share another one these insights. 

Al Mirabelli is the Broker in Charge of the Prudential Carolinas Lake Norman Office.  His office is located in Huntersville, North Carolina.  A couple of weeks ago, a candidate that had recently interviewed in Al’s office sent their company’s recruiting coordinator the following email: 

“Yesterday’s meeting was great.  From the time I walked in (amazing the effect of seeing your own name with balloons) till the time I left, I could see why Prudential Carolinas Reality would be a great place to work and a good fit for me.  I have a few offers on the table right now. Prudential feels like the best fit for me. I would just need a day or to to go over finances to make sure it would be possible right now.”  

This peaked my interest.  What did the candidate mean when he said, “amazing the effect of seeing your own name with balloons?” 

Al provided some background later that week,

“At the entrance foyer of the lobby to my office I have a small [whiteboard easel] that welcomes candidates and other visitors to my office.  During the day of this candidate’s interview, we happen to be welcoming a local group of builders to our office who are partnering with some of our agents and attached some balloons to the whiteboard.  It was such a hit that they ended up taking a picture on their way out.  They later said they were very flattered that we would do such a thing.”

Apparently, the candidate was flattered as well and made a point of mentioning it to the recruiting coordinator during a follow-up call.

Who knew that such a simple thing would have such a great impact?  I must admit, that I was even a little skeptical when I heard this story.   Maybe this candidate was just overstating their feelings in the initial email.   

But, then I received this email a week later from Prudential Carolina’s recruiting coordinator:

“I thank you very much for allowing me to meet Al.  He definitely has passion for the business, which drew me in.  He was wonderful and the entire workforce was very courteous. 

They even had my name on a white board upon entry that said "Welcome [Candidate’s Name]."  It was great!  I plan on working at Prudential and learning the skills necessary so that I can be extremely successful in the field.  So with my ambitious nature and all the information that Al provided to me, I will be successful.”

[Note:  I removed/blurred the candidate’s names in the emails and pictures because we did not get their permission to share their identity]

Al and his staff are onto something—don’t you think?  I believe that Al has figured out how to tap a basic human need—the need for acknowledgment.

I recently read that acknowledgement lets people know that you have truly seen them.  It communicates we have taken the time to pay attention, to notice, and to speak out loud what they contribute, what they accomplish, and some of who they are at their best.

Al—great job on figuring this out and applying it to your interview process!  I hope others will try this as well.

Question:  Do you have interviewing techniques that you’ve found helpful.  If so, share them with us, and we’ll publish your ideas.

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Why Bad News for the Real Estate Industry May Be Great News for Recruiting—Part 2

Last week, I started a discussion on the historical price trending in the real estate industry.  I highlighted  a recent interview that was done by Robert Shiller on Bloomberg television. 

The interview centered on the notion that home ownership has historically been a mediocre or poor investment.  In his opinion, treating it as an investment was a  “fad” based on short-term economic conditions that probably will not happen again.

Wow…did I get an earful back from several of the WorkPuzzle readers! Apparently, many of you don’t care for Dr. Shiller (in general) and did not find his analysis very thoughtful. 

Here is part of an email I received shortly after publishing:

“…to think that [drawing the conclusion that] this real estate cycle, however severe, will change these longer term trends is a rush to judgment. I’ve always found Shiller coy, playful, and not entirely serious in the way he comes across. Or so he seems on TV.  His index was full of bubble markets and, I always felt, distorted (and made worse) the perception of real estate in the 34 states that were not bubble markets.”

Here is another one:

“…the problem [with Shiller’s analysis] is it ignores rents, or imputed rents.  Over time, rents rise, but housing debt service is more or less fixed.  Eventually, when the house is paid off, you live there 'rent free.' No matter what, you’re paying rent, either to your landlord, or to yourself.  Yes, you have maintenance, taxes, and so forth, but so does a landlord.  And you get the psychic reward of owning your own place, and can do what you want with it.

I can’t believe a smart guy like Shiller doesn’t get this.  Compare the net worth of homeowners and non-homeowners…there’s no comparison, and the house is a big part of that.  Sorry for the rant, but seeing a knowledgeable guy like Shiller run down housing just frosts me.”

There were several other good points as well.  I’m glad I prefaced my original introduction with the statement “I’m not a real estate expert…”   I think that I've proven that to be true, and it appears that some of the talking heads on television may not be experts either! 

It’s certainly good to know that it's not all doom and gloom for the real estate industry.   That’s encouraging.

So, what does all of this have to do with recruiting?  Suprisingly, it is what I initially found interesting is the historical housing price graph above.  There is great news in this data.  And, there is especially great news for real estate companies focusing on “new to real estate” recruiting in the future.

Regardless of whether you ascribe to Shiller’s vision or the more hopeful scenarios outlined by many of our readers, I think there is a consensus that what happened between 2000 and 2010 will probably not repeat itself (at least not in the short-term).

It is much more likely that the graph will either flatten out to the right or begin a slow and steady rise that keeps pace with inflation.   As one reader put it,

“…all the talk was about how real estate may never be any good again, because it will 'only' appreciate at about the rate of inflation.  It’s SUPPOSED to only appreciate at the rate of inflation.  It’s a consumable…someone has to be able to afford to live there to rent it.  If it appreciates faster than people’s incomes, it becomes unaffordable, and we just saw what happens when that happens. “

That makes sense.   And if it’s true, then this recruiting principle will help you be successful in the future:

Recruiting is most effective in stable markets.

This idea may seem counterintuitive, but it’s definetly something that goes through the minds of talented candidates as they consider changing careers. And this principle has already had a profound effect on real estate recruiting over the last 10 years.

Think about it--if you were attempting to recruit between 2000 and 2006, it was much easier to get warm bodies in the door, but it was difficult to hire the right people.  What drew many of these new hires into the industry was a “get rich quick” mentality.   These new hires not only left when the easy money dried up (more than 600,000 agents left the real estate industry between 2006 and 2009), but also they caused disruption and harm to many organizational cultures along the way.

Of course, hiring “new to real estate” agents during the backside of the real estate bubble (2007 to 2009) has been very challenging.   While the press constantly paints a negative picture of markets undergoing correction, talented individuals naturally shy away from the turmoil. 

So, where does that leave us now?  For the past couple of years, there seems to be some stabilization happening.  As we move to the right on the graph (the future), many experts are suggesting (Shiller included) that we may be in for a period of slow and steady growth.

Here is the recuting lesson to take from this discussion:  Slow and steady growth is the ideal environment for hiring “new to real estate” agents. 

How do we know this?  We've seen it with our own eyes.  As we consult with real estate companies we constantly see truly high-quality agents who have been with companies over 15 years.  When did those new agents come into the industry? During the previous period of stability.

As you know, it’s difficult to predict the future.  However, if there is a sustained period of slow real estate growth ahead and the real estate industry experiences the retirement of many of it’s mature agents (those 55 and older now), there could be a perfect storm brewing (in a good sense) in the world of  “new to real estate” recruiting. 

I think we’d all enjoying seeing that happen.  Make sure you're prepared to take advantage of it.

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Why Bad News for the Real Estate Industry May be Great News for Recruiting

As real estate buffs, I’m sure most of you are familiar with Robert Shiller’s work.  As you may recall, it was Dr. Shiller’s infamous book, Irrational Exuberance, that accurately predicted the bursting of both the dot-com stock bubble and later the housing bubble.  The first edition of his book was published in 2000, and the second edition (that focused more on the housing market) was published in 2005.

Since Dr. Shiller predicted the collapse of these bubbles (especially the housing bubble) so accurately, he has risen to “prophet status” in the minds of many media pundits.  At least once a month, it seems I read an article where he is cited as the expert on what the future holds for the real estate industry.

Most of the prognosticating, seems to center around some form of the chart below:

While there are many different ways to present this historical housing data, most of the discussions, with Dr. Shiller focus on the right side of this graph.   “ Are we at the bottom of the market?” “Will housing prices return to their previous levels?” “Will housing prices now follow a more traditional trajectory?”etc.

After watching a number of these interviews, I’m starting to think Dr. Shiller is getting tired of these questions.  This is especially true for the interview I saw last week on Bloomberg television.

At one point, the interviewer (Trish Regan) challenges Dr. Shiller’s lack of enthusiasm for the most recent housing stats that suggest a rebound may have started.

“"Then why buy a home?" she asked. "People trap their savings in a home. They're running an opportunity cost of not having that money liquid to earn a better return in the market. Why do it?"

"Absolutely!" Shiller exclaimed. "Housing traditionally is not viewed as a great investment. It takes maintenance, it depreciates, it goes out of style. All of those are problems. And there's technical progress in housing. So, new ones are better."

"So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000's. And I don't expect it to come back. Not with the same force. So people might just decide, "Yeah, I'll diversify my portfolio. I'll live in a rental." That is a very sensible thing for many people to do."

Notice what he said about viewing housing as an investment—he clearly believes “investing in housing” (for the purpose of getting a financial return) is a bad idea.  He goes on later in the interview to show that the real return on a housing between 1890 and 1990 amounted to a 0% return. 

You’re welcome to watch the whole interview here (be warned, it’s about 10 minutes long):

 I’m certainly not a real estate expert, but this seems like a major paradigm shift for the real estate industry, and possibly for society at large. 

Ever since I bought my first home 15 years ago, I’ve heard and believed that my house was a good investment.   While that has personally worked out well for me, the future will likely be very different for those who are buying homes today.

If we relook at the housing graph that we considered to start this discussion, it seems that Dr. Shiller is suggesting that we’re headed back to the left side of the graph.  This would mean some sort of steady growth that really amounts to negligible growth. 

While this doesn’t seem very exciting for real estate sales (perhaps many of your are feeling depressed by this analysis), I think it is great news for real estate recruiting. 

Why?  I'm out of time for now.   I’ll share these thoughts in my next discussion.

Question:  Do you belive the Dr. Shiller is correct?  If so, how could this be good news for real estate recruiting?

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Successfully Influencing “New to Real Estate” Candidates to Make a Career Change

One of the questions we often get from hiring managers is…”How do I consistently get high quality candidates to make the commitment to become real estate agents?” 

As we observe this process, it always seems the best candidates are on the fence because they don’t have to become agents.  Since they have talent and marketable skills, they usually have the option of doing something else.  Often, that “something else” is just staying in their current job or career field.

How do you get these candidates off the fence and headed towards becoming your next top performing agents? 

According to new research recently published in Harvard Business Review, keep them focused on a great outcome they will personally realize if they become real estate agents.

The research on this topic was conducted by Dr. Mark Goulston and Dr. John Ullmen and is summarized in a new book called Real Influence: Persuade Without Pushing, Gain Without Giving In.   Here is a excerpt from the HBR article:

“ Few people like to be pushed into doing something, or sold hard on it. And few like to push or deliver a hard sell. But at the end of the day, or even the end of a conversation, you do have to move things forward. So how do effective leaders really get things done?

As part of the research…[we] interviewed more than 100 people who "get things done," but who aren't pushy. But when we asked them, "Who persuaded you to do something really important?" more than a few arched their backs and replied defensively, "Nobody persuaded me to do anything important!"

When we switched tactics and asked, "Well then who positively influenced you to become the person you are?" they leaned back, smiled, took a deep breath of satisfaction and replied, "Now that's a different story!"

This small change in perspective seemed to help the researchers uncover several consistent and repeatable patterns among great influencers.  As a hiring manager, these patterns could be very helpful—don’t you think?

I won’t steal the author’s thunder by revealing all their secrets, but I did find one of their techniques very compelling:  Great influencers learn to communicate great outcomes.

“When people paint a picture of a great outcome, they're not trying "to persuade people to do something important." They're trying to "positively influence them" to get them to a better place.

Take the story of Jim Sinegal, co-founder and former CEO of Costco, largely seen as the heart and soul of that great company. Jim is very humble and doesn't like to be given too much credit for his and Costco's success.

He often tells the story of how, as a recovering juvenile delinquent still headed in the wrong direction, he was working as a bagger at FedMart in San Diego. One day he was singled out by the legendary Sol Price, the founder of FedMark who is viewed as the father of the warehouse store concept.

Price saw beyond where Jim was, even beyond where he wanted to be, to where and who he could be — and focusing on that "great outcome" let him influence Jim, even as others had failed to persuade him. Price's dedication to customer value and the caring treatment of employees lived on through Jim and is so ingrained in the Costco culture that those values live on beyond his stewardship as CEO.”

For a real estate hiring manager, there is an important lesson in this approach. If you try to persuade someone to take the next logical step in their work life (ie. become a real estate agent), you’ll likely come across as “salesy” and meet resistence.  

But, if you effectively “paint a picture of a great outcome” for the candidate during the interview (and consistently during the follow-up process), the research suggests that this will produce a different result.   You’ll become a positive influencer rather than a ineffective persuader.

Question:  What type of “great outcomes” do you think would be compelling to the candidates you are interviewing?

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

How Mastering Habits Can Have a Profound Impact on Your Performance in the New Year—Part 4

Hopefully, you’ve spent some time working on your habits as you’ve started the new year.  If you’re just joining the discussion, you may want to catch up by reading  the previous posts on this topic (1,2,3).

We’ll finish up this series by introducing the concept of a “keystone habit.”  From a holistic perspective, this concept has the greatest application to real estate organizations and individual offices.

In his book, Charles Duhigg introduces this concept in a chapter he calls “The Ballad of Paul O’Neill.”  If you’re a political buff, you may remember that Paul O’Neill was Treasury Secretary during President Bush’s first term.  However, he is more famous for his work as CEO of Alcoa during the late ‘80s and ‘90s. 

Here is a quick summary (as written up by Keren Threlfall ) of what happened at Alcoa:

Investors and employees alike were shocked when Paul O’Neill shared this in his speech of acceptance as the new CEO of Alcoa:

“I want to talk to you about worker safety. Every year, numerous Alcoa workers are injured so badly that they miss a day of work. I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”

Some people thought perhaps he had a touch of dementia. Investors called their clients and advised them to sell their stock immediately. (Those who did so would later realize that was some pretty bad advice.)

What O’Neill was doing was introducing a keystone habit.

“O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization. Some habits, in other words, matter more than others in remaking businesses and lives. These are “keystone habits,” and they can influence how people work, eat, play, live, spend, and communicate. Keystone habits start a process that, over time, transforms everything.”

As the company focused on safety, employees and investors were amazed at the other areas of change, as well. Alcoa eventually rose to new heights in production, employee satisfaction, and in their portfolios, as well.

By the time O'Neill retired in 2000 to become Treasury Secretary, the company's annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion. Someone who invested a million dollars in Alcoa on the day O'Neill was hired would have earned another million dollars in dividends while he headed the company, and the value of their stock would be five times bigger when he left.

There is a lot more to his story—more than I can write here and stay within the reasonable bounds of a WorkPuzzle discussion.  If you want to delve more into the details, read the lengthy article published on keystone habits in the Huffington Post last year. 

There are two principles that I took away from the Ballad of Paul O’Neil:

1.  The organizational habits that matter the most are the ones that, when they start to gain momentum, dislodge and remake other patterns.

2.  Keystone habits encourage change by creating structures that help other organizational habits to flourish.

As a business leader, the challenge is to identify the keystone habit for your organization.  Obviously, it would not be appropriate to select the same one that Paul O’Neil used (safety).  Instead, look for ones that would impact your organization as described above.

Any ideas?  

Here’s what I’ve noticed after working with hundreds of real estate managers and organizations over the last seven years:  the keystone habit for most real estate organizations is recruiting.  

In the years ahead, the keystone habit that will increasingly impact the real estate industry will be new agent recruiting.

Why?  This is the one habit that best fits the two principles outlined in Duhigg’s research for a real estate organization. New agent recruiting has the capacity to dislodge and remake other patterns.  Also, new agent recruiting has the unique ability to encourage change through the creation of new structures.

What are your thoughts?  Do you see new agent recruiting as the keystone habit that can help your organization prosper?

Bonus Materials:  As we wrap our discussion on habits, you may have an interest in referencing this cool infographic on habits (some of you may remember, I really like infographics).  If you're serious about changing habits, this breaks down the process and helps in the diagnosis of each stage.

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

How Mastering Habits Can Have a Profound Impact on Your Performance in the New Year —Part 3

I hope each of you had a wonderful Christmas holiday and are looking forward to a prosperous new year. Our crew took a couple of weeks off from our normal writing schedule over the holidays, and we’re excited about kicking off a new season of insight and dialog in 2013. 

As you may remember, I started the discussion on habits in December with the assumption that many of you would be doing some strategic planning around this time of year.  If you need a refresher, you may want to reference the previous (Part 1, Part 2) discussions. 

Common sense tells us that real change will not happen in our lives unless we learn how to dislodge bad habits and cultivate new ones. Using the process that I outlined in my last blog, have you identified one or two bad habits you’d like to address? 

If not, I encourage you to go through the process of sketching out your own cues, routines, and rewards cycle for the habits you’ve identified. Then, start the trial and error of testing your hypothesis.  If you haven’t personally gone through the “habit loop” process at least once, you may have trouble understanding the next part of our discussion.

If habits have a profound impact on our own personal lives, it only makes sense they’ll also have an impact on professional relationships. As a leader, understanding the influence that habits have on others can significantly increase your level of effectiveness.

 For today’s discussion, we’ll consider two areas of professional relationships that are common to most real estate owners and managers:

1.  The habits of those you manage and coach.

2.  The habits of the clients your company serves.

Habits for Coaching

If you’re struggling to understand and manage your own habits, you can bet the people you coach are struggling, as well.  Or worse, they are not struggling because they are completely blind to the influence of habit in their own lives.  Many agents are dragged along by influences of which they are not aware. 

In either case, your role as a coach can take on a new level of effectiveness with an understanding of how habits control behavior.  While it is easy to identify poor outcomes, it is not easy to pinpoint the causes of poor outcomes.  

Try looking at poor outcomes through the framework of the “habit loop.”  What are the cues that
agents are reacting to during the day?  Which of these cues lead to routines that produce poor results?  What false rewards are agents typically pursuing that cause them to continually repeat the cycle of ineffectiveness?  

Like you did for you own habits (part 2 of this discussion), try sketching out a couple of “habit loops” for the agents you coach and then discuss these issues during your next coaching session.

Habits for Clients

Studying the habits of consumers (ie. those that buy your services) is not something that most people have considered.  However, I found this topic the most intriguing part of Charles Duhigg’s book.  Much of what has been discovered in this realm has not been yet been applied to the real estate sales industry.

Here’s the basic premise of habit theory as it applies to customers: Since all human beings are controlled by their habits, understanding typical cues, routines, and rewards can help a company optimize the sales process. In the real estate industry, it would be particularly interesting to know who will be buying or selling a home in the near future.

In his book, Duhigg documents an extensive case study involving Target; the popular nationwide retailer. The case study illustrates how Target has become very good at predicting what products a person will buy.  How? By figuring out what is going on in a unique customer’s personal life. For example, Target can often tell if a female customer is pregnant and how far along (ie. what trimester) she is in her pregnancy after she spends some time in the store.

They find out this information by studying habits.  For example, women often change from using scented lotions to non-scented lotions in the second trimester of a pregnancy.  A cue changes (scents become irritating) and that causes a routine change (buying a different product) that leads to a
reward (healthy skin) women don’t want to give up.  

This piece of information, combined with several more data points, equip Target to guess (with a surprisingly high level of accuracy) when a woman is in the second trimester of a pregnancy.  Once Target has this information, they can focus on specifically marketing to that person for the large number of purchases she’ll make  in the months just before and after the baby arrives.

I’m summarizing a concept that took the author about half of the book to describe, so this concept may still seem cloudy at this point.  If you want to learn more, here are a couple of articles from Forbes and the New York Times Magazine that describe this in more detail.  By the way, Target is not the only company doing this.  Many companies in various industries are starting to apply these principles of human behavior to optimize their sales efforts.

So, what application does this have for the real estate industry?  I think many of the answers to this question are yet to be discovered.  But I do know this: there will be big rewards for those who innovate in this arena. Also, I’ve had several meetings in the past couple years where real estate executives ask very similar questions.  If you don’t figure this out, your competitors probably will.

Spend some time learning about habits—both your agents and your clients will benefit.   In our final chapter of this series we’ll discuss the concept of a “keystone habit” and how these theories will help you improve recruiting.  Stay tuned.

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Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

How Mastering Habits Can Have a Profound Impact on Your Performance in the Upcoming Year—Part 2

The first step to “minding our habits” (as Meryl Streep advised to do in my previous blog) is understanding how habits work and drawing conclusions on why they have a powerful impact on human behavior.

Early in his book, Charles Duhigg points out that good habits are actually an essential part of an individual's existence.  While bad habits seem to attract the most attention in a typical discussion concerning performance, good habits quietly perform their role without much notice. However, their importance should not be diminished--the human brain would be unable to effectively function without the widespread use of good habits.  

For example, think about backing your car out of the garage.  Most of us can do this task with very little thought or focused attention.  However, as I’ve tried to teach my teenagers to perform this task, it’s amazing how much mental energy it takes for them to negotiate all the variables in the process (how much speed, where’s the brake, watch the mirrors, how far to the back wall, etc.)  However, after a few dozen times, they (and most other people) can perform this task with very little thought.

So, good habits empower humans to perform hundreds of tasks each day with very little mental energy and focus. If we had to think about each of these behaviors every time we did them, even the basics of life would be debilitating.

However, anything that has the capacity for this much good also has the power to create and sustain undesirable actions.  Bad habits are just as strong as good habits.  Once the brain goes on autopilot, it is very difficult to get it out of what Duhigg calls the “Habit Loop.”   

The Habit Loop is the way of explaining what happens in the brain as a habit is executed.  The following diagram helps describe this process:

The diagram above is fairly intuitive—the cue is something that your brain notices, the routine is something you automatically do to solve the problem, and the reward is some benefit you get for solving the problem.

For example, Duhigg points out that most of us brush our teeth as the result of the habit loop.    When we wake up in the morning, the surface of our teeth feels fuzzy (the cue).  To solve the problem, we brush our teeth (the routine).  After brushing our teeth, our mouths feel fresh, minty, and clean (the reward).  This good habit leads to healthy teeth.

As you probably guessed, bad habits follow the same process.  A cue ignites the brain’s craving for a certain reward and launches a routine that quickly and efficiently makes the reward a reality.  Duhigg does a great job of explaining the bad habit process in the following video:

 

So, the key to mastering habits is recognizing that certain cues exist and these cues lead the brain to anticipate a certain reward.  This craving for the reward can be strong and unrelenting--so much so that an individual's willpower to change is, in the long term, rendered ineffective.   To change a habit, the habit loop must be disrupted by altering the routine.

Once you watch the video and think about how this process works, take some time to identify one of two habits you’d like to change.  As the author suggests, sketch out your own habit loop and try to diagnose the cues, routines, and rewards that make your habit come to life.

In our next discussion, I’ll show you how understanding the habit process can make you a more effective sales person (why do your company’s clients do what they do?) and a more effective coach (why do your agents do what they do.)

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

How Mastering Habits Can Have a Profound Impact on Your Performance in the Upcoming Year

As things wind down for the year, I’m sure some of you are already starting to do some strategic planning for next year.  While reflection on the events of the previous year and hope for improvement are foundational pieces of any good planning process, I think many of us wonder if we truly have the capacity to make and sustain significant change. 

I’ve personally pondered this question even more than usual in the last few months after reading Charles Duhigg’s best selling book titled The Power of Habit: Why We Do What We Do in Life and Business.  Why?  Because I’m starting to understand the powerful grip that habit has on my life—especially as I get older.

The researchers have been making this point for a while.  In fact, I even wrote a blog on this topic a couple of years ago where I highlighted the work of Tony Schwartz.  Schwartz made this statement in his book Be Excellent at Anything:

“Fully 95% of our behavior occurs out of habit, either unconsciously or in reaction to external demands.  We’re run by the automatic processes of the primitive parts of the brain far more than we rely on the complex conscious capacities of our prefrontal cortex—we think we’re in charge of our lives, but we’re not.”

If this is true, then mastering habits is one of the most important components to making positive changes in our lives.  

Over the next couple of weeks, I’ll be sharing some of the lessons that I learned from Duhigg’s book.   The information I’ll share will not only impact your personal performance, your ability to coach, and your effectiveness as a recruiter, but it will also help you understand your customers better.  It really is amazing how the science of habit infiltrates nearly every part of a person’s life.

To get you thinking about this topic, I’d like to share a movie clip of Meryl Streep playing Margaret Thatcher in The Iron Lady.  This performance won Streep both an Academy Award and a Golden Globe Award for best actress in 2011. 

This clip shows Margaret Thatcher, long after retiring from political office , reflecting on the importance of "thoughts" over "feelings" during a tense doctor's visit.   Notice what she says about habit.

 

Our habits are directly connected to both our character and our destiny.  Stay tuned over the next couple of weeks and we will learn how to “mind our habits….”

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Engage in the WorkPuzzle discussion by joining the TMOC private social network.  Commenting on a public blog like WorkPuzzle can be a little intimidating, so why not join the discussion inside the privacy of the TMOC discussion group?  

By joining TMOC, you'll get to see who else is in the group and your comments will only be seen by those whom you trust.   Joining TMOC is quick, easy, and free (no kidding…this takes less than 2 minutes).   To get started, click here.

Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.