G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
When You Can't Do It All
Brokers with too many balls in the air risk missing company goals. Consider hiring a manager so you can focus on your strengths.
January 21, 2014
The first step in any self-improvement journey is admitting you need help. This advice applies equally to the responsibilities of running your company.
How can you determine whether you’re stretched too thin as the person who handles every management task at your brokerage? Here, brokers discuss some of the telltale signs that will let you know when you’d be better off concentrating on the tasks you do best and hiring a manager to handle the rest. It isn’t just one event that should prompt you to consider hiring a manager. Here are four indicators of an underperforming company that could suggest you aren’t focusing on what’s most important as broker-owner:
- You’re not meeting your company’s goals. If you want to build production or market share and aren’t accomplishing those missions, you probably need assistance. “I need to be growing at a rate better than the market to be ahead of my competition,” explains David McCarthy, CRS, operating partner–broker at the 150-salesperson Keller Williams Boston-Metro and the 69-salesperson Keller Williams Chestnut Hill in Massachusetts.
- You don’t have enough time to consult properly with your sales associates. “The most important thing you can do is realize that if you don’t have enough time to be with your sales associates, you need a manager,” contends Janen Ardia, executive vice president and broker of record for the 39-salesperson RE/MAX Heritage with offices in Flanders and Chester, N.J. “In that case, I’d hire a manager who’s able to take over a lot of the day-to-day issues that come up with salespeople who need more hands-on attention. And I don’t even mean new salespeople. Because the market has been volatile, a lot of experienced salespeople need more consultation.”
- You’ve neglected big-picture work. If you spend most of your time on day-to-day tasks like operating the office, argues Ardia, your talents are likely being wasted. Ardia realized she needed help when she neglected to do a quarterly review to map out a strategic plan to improve productivity. “People mistakenly believe moving the company up another level is done only through recruiting,” she explains. “If I realize I’m paying attention to too many other things—even though they’re valid and necessary—I need to bring in someone to handle the day-to-day coaching or training or attending to other issues, like handling a price adjustment with a client.”
- You’re just not able to keep up. Maybe you’re not seeing the signals. That’s a stage of his company’s trajectory Kelly Sweeney vividly recalls. “I remember back when we had only 100 salespeople and three offices,” says the CEO of three Coldwell Banker companies spanning 15 offices in southeast and western Michigan. “I had to do all the managing of the largest office, plus the deal doctoring, recruiting and training, and setting the strategic vision and leading the company. There’s not enough gas in your tank to do all that effectively.”
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Is a Manager the Answer?
When you recognize you need help, the question is whom to hire. Different brokers have different selection criteria, and your choice doesn’t have to be a manager. “It’s based on what you’re good at and goes back to what you need.” says Sweeney. He says he’s seen lots of successful brokerages with a selling broker, a highly skilled administrator who runs the office swimmingly, and no need for a manager. “That might work for a 20-to-30–salesperson company,” he says. “But if you have 70 salespeople, you probably need a licensed manager to deal with all the challenges that come up in transactions. Also, what’s your demographic? If you have a small group of experienced salespeople, they may not need a lot of mentoring.”
Another option is to hire someone who can do what you don’t want to do. Dan Kruse, president of the 54-office Century 21 Affiliated headquartered in Madison, Wis., says he knows lots of good brokers who love the day-to-day interaction with their salespeople. But they hate the grind of administrative issues. If that describes you, Kruse suggests hiring an administrator or clerical staffer to free up your time so you can do what you love.
Kruse also knows brokers who aren’t good at mentoring salespeople; instead, they’re good at helping salespeople by bringing leads into the company. That situation calls for hiring a manager skilled at mentoring and coaching sales associates.
Can You Afford It?
There’s a hitch: “Hiring costs money,” explains Bruce Ailion, CRB, CRS, associate broker at RE/MAX Greater Atlanta in Marietta, Ga. “Most owners, myself included, delay because it’s not just [about] hiring a manager. It’s hiring a competent manager, and good people don’t come cheap. We delay and delay because, of course, no one can do the job better than we can and we’re not sitting on huge bank accounts loaded with profits.”
Dub Dellis, COO at Walt Danley Realty in Paradise Valley, Ariz., says when his boss, Walt Danley, hired him to manage the company so Danley could spend more time selling, it was purely a financial decision: “The question was, ‘What was Walt’s cost in lost business of not hiring a manager?’ ”
That analysis was straightforward, says Dellis. Danley evaluated how much of his time he was spending on tasks that weren’t his strong suit. If it was 30 percent, Danley assumed he could increase his sales by 30 percent if he hired someone to handle those functions. Ardia, who hired a non-selling manager to assist her, recommends looking beyond the upfront expense. “The value of spending good money on a great manager will come back to you three times over in any given year,” she says. Ardia’s company pays the manager a “comfortable” base salary and a monthly bonus based on the sales profits in her offices. She says that’s a common way to compensate managers without breaking the company bank.
It may also be a wise long-term move to take an immediate loss. “Even though you may think economically you can’t hire a manager, it’ll be the best move for your company,” says Kruse. Delaying rarely makes sense either. “There’s an old saying that goes something like, ‘The only regret I have is not doing something sooner,’ ” says Ardia.