Last week, I was able to spend some time with the leadership team of one our clients in the Midwest.  These types of consulting trips always energize me because I’m able to engage those who are “slugging it out” on the front lines.  The resilience, perseverance, and tenacity displayed by real estate leaders in today’s market (those still in business) is quite inspiring.

One goal of this consulting visit was to attempt to quantify what the future holds regarding the hiring of new agents.  While there is an initial tendency to look to the past to try to predict what will work in the future, the future seems to have a way of moving on before the benefits of that exercise can be realized.

This leaves us with trying to envision the future and then matching the actions of today to what we believe will be tomorrow’s reality.  This is what business leaders call "vision."  The question I’d like to explore today is:

How do you cultivate vision in your organization or team?

The quick answer to this question is…understand your customers.  

I know this sounds simple, but understanding your customers is a profound struggle for anyone who conducts business within a mature industry.  There are so many paradigms, business frameworks, and even regulatory restrictions that keep a leader from seeing and connecting with what the customer wants.  It is often difficult, frustrating and quite expensive to make changes.

As a point of encouragement, there are other mature industries that are also struggling with this issue.  I thought it might be helpful to share an example from a recent article published in Businessweek on this topic.  When I picked-up this article, I was surprised to learn that the casual-dining industry is experiencing much of the same pain that the real estate industry has been experiencing over the last few years:

“American twentysomethings are snubbing the restaurant chains their parents took them to as kids.  Chili’s, Applebee’s, Ruby Tuesday, and other so-called casual-dining chains are already struggling to revive sales in the wake of an epic recession. 

Now they risk losing an important consumer demographic group unless they remake themselves.  ‘If you have a little bit of money and you’re educated, you want a boutique feel, less chain,’ says Brad Swanson, who runs the restaurant group at KeyBanc Capital Markets, an investment banking and equity research firm.

The casual-dining chains, which serve reasonably priced sit-down meals, are losing customers to ‘fast-casual’ upstarts such as Five Guys, Chipotle Mexican Grill, and Panera Bread, which offer counter service, trendy menus, and not much else.”

So, the recession has knocked these restaurant companies down, but what may keep them from getting up is a generational issue.  I suspect that people will continue to eat out, but they’re probably not going to eat at the restaurants that were so prominent just a few years ago.

Some of these companies are experiencing a sense of paralysis as these changes approach:

“Revenue at Chili’s parent, Brinker International, has declined for four straight years.  Sales at DineEquity (DIN), which owns Applebee’s and IHOP, have slid in nine of the last ten quarters (in part because the company has sold about half its Applebee’s locations to various franchisees).”

While some companies remained paralyzed as their potential declined, others saw that changes were necessary and moved quickly to make adjustments.  These changes took a little while to incubate, but they are now starting to pay off.

“Ruby Tuesday, which grew revenue in its fiscal 2011 for the first time in four years, is licensing and opening stores from Lime Fresh Mexican Grill, a Florida chain that looks a lot like a certain fast-casual competitor.

Lime Fresh restaurants feature hammered copper countertops and earth-toned walls and sell the usual Mexican fare—guacamole, quesadillas, burritos—made from ‘humanely raised’ food.  The chain ‘plays on sustainably raised, better quality, more natural ingredients—not too dissimilar to what Chipotle has done,’ says Robert Derrington, a restaurant analyst at investment firm Morgan Keegan.  ‘It’s clearly positioned towards a younger demographic.’ ”

While some of the changes necessary to stay competitive require significant capital (Applebee’s is currently rehabbing many of their restaurants at $200,000 per location), some of the less expensive changes can have a large impact—if they’re focued on the what the end customer wants:

“Millennials like to hit the bar after work.  Hence Applebee’s “Girls’ Night Out” parties, which are advertised heavily on Facebook.  Ruby Tuesday is pushing $5 cocktails made with açai berries, as well as craft beers. 

The fast-casual restaurants are doing the same.  Chipotle serves beer and margaritas at most locations, while beer and wine is on the menu at select Five Guys stores.”

Here is the bottom line:  Since the beginning of time, businesses have had to adapt to the changes in their marketplace, finances, technologies, and hundreds of other challenges.  The companies that continually recreate themselves to meet the needs of their customers will be the ones to survive.  They'll earn the privilege of competing with the new start-ups that will inevitably replace the mature companies that were not able to change.  

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.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below.