G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
With Friends Like These, Who Needs Consultants?
June 1, 1996
Name: Mason McDuffie, REALTORS®
Location: Walnut Creek, Calif.
Size: 1,500 salespeople
For just the cost of dinner once a quarter, Mason McDuffie, REALTORS®, has tapped into a vast network of experts in other businesses---and saved itself big money.
The brokerage created a program through which it makes "friends" in other industries, and those friends offer insight on how to improve the company's operations. Ed Krafchow, chief operating officer and senior vice president of Mason McDuffie, explains "Friends of the Brokerage."
The program: The president of Mason McDuffie came up with the idea to create an advisory board. It's composed of people outside the industry who talk to us from a different point of view.
Initially, the board consisted of five people: one came from the insurance industry, the second was from the valuation industry, the third had his own computer company, the fourth came from the leasing business, and the fifth was a businessperson outside of real estate who'd been through a merger and acquisition and had a very strong marketing background.
The reasoning: We're going through massive change, and that's uncomfortable. What's really difficult is getting enough consultation to make the proper changes. The program has helped us focus and make changes that are appropriate.
The creation: To set up the original group, we went to lunch with a lot of people to determine their level of expertise. We now ask our salespeople to act as feeders and nominate friends. They nominate clients and customers or personal friends who are valuable to the community. We ask the salespeople what strengths those friends bring, and then we invite those friends to a meeting at which we tell them all about the company.
The meeting is like publishing your profit-and-loss statement in The Wall Street Journal. We tell people about our profitability, what we're doing, where our struggles are, and what we think we need to do, and we look for feedback.
The intangible results: The program allows salespeople to bring in people from the community continually to tell them about our company. It also generates goodwill for our company.
The invitation is also a way for salespeople to maintain a relationship with clients and customers. Even if their friends don't come, salespeople are getting value because their friends were noticed. Someone has said, "Hey, we acknowledge you for being an active person, and we'd like to meet with you." It helps if friends come to the meeting, but whether they come or not isn't terribly important. It's public relations.
Another benefit is that the friends challenge your assumptions about the fundamentals of managing a company. We're so ingrained in our industry, but they ask such basic questions as, Why are your fixed expenses so high? Why are your lease costs so high? Why are you in retail space when you can't afford it? You're uncomfortable because you have to explain the answers.
Finally, the program has helped in the sense that our board of directors has traditionally been internal. But we felt we needed to move our organization in a different direction. So some of the friends went on to serve on our board of directors. It now consists of 11 people, five of whom are external to the company.
The tangible results: Two years ago one of our competitors installed a wide-area computer network for about $1.5 million, but we were able to put one in for about $20,000 because a friend came and looked at what we were doing. He said, "You're going in this direction, but you need to turn around and go over there, simplify this, and move away from that." We ended up paying him a consulting fee, because I began to feel guilty.
The cost: We take friends to dinner each quarter.
The surprise: People who are very effective seem to have more time than those who are less effective. And they're willing to volunteer their time to help you.
Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.