WorkPuzzle

Meaning at Work: How to Tap a New Level of Performance in Your Agents and Employees

Dr. Robert Emmons, a prolific researcher and professor at the University of California, recently wrote:

“As far as we know, humans are the only meaning-seeking species on the planet. ‘Meaning- making’ is an activity that is distinctively human, a function of how the human brain is organized. 

The many ways in which humans conceptualize, create, and search for meaning has become a recent focus of behavioral science on the quality of life and subjective well-being.” 

A tremendous amount of research and writing on the connection between human performance and the meaning people find in their work has started to emerge because of this focus.   And, some of the heavy-hitters in the business world were quick to take notice of these discoveries. 

Here are some examples of how much attention is being paid to “meaning-making” at work:

• Research at McKinsey and Company has led to actionable strategies and tasks that help infuse meaning in the work of individuals and organizations.  These findings were based on research done by social scientists. Their full perspective and recommendations can be found in Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage
• Gary Hamel, ranked by the Wall Street Journal as the world’s most influential business thinker, and who Fortune magazine called “the world’s leading expert on business strategy" is encouraging managers to see themselves as “entrepreneurs of meaning.”
• One of my favorite psychological researchers, Mikel Csìkszentmihàlyi, writes extensively about “the making of meaning” in his book Good Business.

I want to emphasize that the research being done in this area is far from the touchy-feely anecdotes or inspirational speaker clichés that sometimes sound similar. I have little tolerance for methods and insights that are not based on research.   Once you push through the surface language, there is substance behind this topic that leads to real and measurable performance improvements.

There is far too much to share with you about this subject matter in one blog edition, but here are a few examples that will get you thinking about the importance of meaning at work.  These examples were compiled by Susie Cranston and Scott Keeler at McKinsey and Company:

1.  Emerson Electric

"David Farr, chairman and CEO of Emerson Electric.... is known for asking virtually everyone he encounters in the organization four questions:

(a) How do you make a difference? (testing for alignment with the company’s direction)

(b) What improvement idea are you working on? (emphasizing continuous improvement)

(c) When did you last get coaching from your boss? (emphasizing the importance of people development)

(d) Who is the enemy? (emphasizing the importance of 'One Emerson' and no silos, as well as directing the staff’s energy toward the external threat).

The motivational effect of this approach has been widely noted by Emerson employees."

2.  Wells Fargo

"The CEO of Wells Fargo, John Stumpf, marked the first anniversary of its change program by sending out personal thank-you notes to all the employees who had been involved, with specific messages related to the impact of their individual work."

3.  PepsiCo

"Indra Nooyi, CEO of PepsiCo, sends the spouses of her top team handwritten thank-you letters. After seeing the impact of her own success on her mother during a visit to India, she began sending letters to the parents of her top team, too.

Some managers might dismiss these as token gestures—but employees often tell us that the resulting boost in motivation and in connection to the leader and the company can last for months if not years.

As Sam Walton, founder of Wal-Mart Stores, put it, 'Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free—and worth a fortune.'”

Don't get me wrong, working hard and expecting everyone else match your level of effort can be a powerful motivator. However, that philosophy has limitations.

As human beings, we need more.  Science is telling us that the “more” we’re looking for is meaning in our work.  Make sure your agents and employees understand and buy-into the meaning behind their tasks.  If they don’t, they’ll not reach their maximum potential and your team will suffer.

Question:  How do you help infuse your organization with meaning?   What communication techniques have you tried and found effective?

 

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Editor's Note: This article was written by Dr. David Mashburn. Dave is a Clinical and Consulting Psychologist, a Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle. 

The Equation for Achievement

We all spend a great deal of time trying to figure out the best possible ways to predict potential success in those we recruit and interview.

And we aren't alone.

Where there exists a big question, you can usually find big research. Many people within the field of psychology spend ample time and research dollars trying to predict the same.

While reading Martin Seligman's most recent book, called "Flourish," I am, once again, struck by how far research has come in boiling down "achievement" to its primary components.

The following is an excerpt of an article summarizing the research on this topic.

 "Many people think that if you are smart and have enough talent, you will succeed in fields such as sports, music, education and business.  When we think of great people in history such as Mozart, Edison, Confucius, and Shakespeare we hear about their talent and intelligence.

But true genius is being shown to be as much a product of grit as intelligence or skill. 

A study of genius (By Dr Angela L. Duckworth and Christopher Peterson) in twenty-one fields, including astronomy, music, mathematics, Eastern and Western philosophy, painting and literature showed that only two or three giants stand way ahead in each of these fields, a few top performers outdistance the rest by a huge amount. 

For example, in the publication of scientific papers, very few people publish many papers, but the majority of scientists publish none or only one.  In golf, only three golfers have won sixty or more PGA tournaments (Arnold Palmer, Jack Nicklaus and Tiger Woods). Greatness and high achievement are reserved for only a few. It is their grittiness, as well as their intelligence and skill that caused their success.

The equation that predicts success is: (Skill) x (Effort) = Achievement.  

Martin Seligman, a well known academic and psychologist, in his recent book “Flourish,” points to a a great deal of research that shows achievement can be understood and predicted by the following four factors.

SPEED: Seligman calls this ‘Fast’ and it is the sheer speed of your thought about a task.  This involves how much and how quickly you have access to relevant knowledge on the task. It is hard to develop this. You either have it or you don’t.

MINDFULNESS: He calls this ‘Slow’.  This is the ability to call up memories, plan, check, review and be creative in examining and exploring the task.  This can be learned through meditation and mindfulness practices such as walking, eating with attention, and breath awareness.

RATE OF LEARNING: The faster your rate of learning, the more knowledge you can accumulate about the area.  This is different from sheer speed of thought.  This occurs by being involved in new, challenging, and tight time-lined projects and through reviewing “lessons learned.”

EFFORT: Time on task.  This is the time spent on doing or practicing the task and multiplies the skill available in achieving the goal.  It also adds to speed since more time spent on a task results in more knowledge of it.

Research has shown that extraordinary achievement in sports, chess, music, writing and business is not just talent or IQ but the amount of hours you practice something.  If you want to be great at something practice it for 60 hours a week for 20 years!"

When reading the literature, I am left with questions I believe we all need to be asking if we expect to continue learning, growing, and getting better at what we do: 

1. Can you find both sides of this equation being lived out in those you know who have succeeded? 

2. Does it clearly differentiate workers who succeed from those who don't? 

3. Did the successful individuals come with one or both characteristics, or did they develop them?

4.  Do people lose either side of the equation with time? If so ,how and why?

5.  Can you teach this equation in a way where it will inspire people to develop a growth mindset and better pursue both sides of the equation?

6.  Are there components of the equation that are missing? (i.e. interests, signature strengths or innate wiring etc.)

Let me know your answers or other questions that I might be missing.

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Editor's Note: This article was written by Dr. David Mashburn. Dave is a Clinical and Consulting Psychologist, a Partner at Tidemark, Inc. and a regular contributor to 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. 

The Progress Principle

Since reading the books "Flow" and "Finding Flow" summarizing the empirical research of Mihaly Csikszentmihalyi, I constantly think about improving work tasks and how to keep them from being too boring or anxiety producing. 

The book, "The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work" by Teresa Amabile and Steven Kramer, does an excellent job reminding us what goes on inside the heads of those we are responsible for and how to improve their engagement at work. Analyzing nearly 12,000 diary entries, provided by 238 employees in 7 companies, the authors explain how managers can cultivate progress and enhance work life. 

 The diaries themselves can provide insight to the inner turmoil people experience, and that alone might be worth the price of the book. However, the real value comes in their insightful recommendations. Not only are the recommendations well worth considering, but existing research also agrees with the suggestions.

 In the book, the authors demonstrate how to remove obstacles to progress, such as pointless tasks and toxic relationships, how to enable progress, using clear goals matched with autonomity, and how to nourish interpersonal events that demonstrate respect and foster collegiality. 

 The following video is rather long, at 18 minutes, but, if you have the time on an upcoming flight, it may be worth a look. 

 

  

Knowing how to get and keep your team engaged may  qualify as one of the top three tasks of being a leader. You can work on many other factors, but, if you have disengaged workers, the progress will be slow.

Question:  Are you able to keep those around you engaged?  Share the techniques that you've found effective in keeping those on your team engaged.

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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 Dr. David Mashburn. Dave is a Clinical and Consulting Psychologist, a Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle. 

The Science and Benefit of Failure

    "Never underestimate the magical properties of failure. It rewires the brain and gets the creative juices flowing."

This quote caught my attention in an article I found in a recent edition of Psychology Today. The reason: I have lived that statement in so many ways. People who know me might not even know this,  I tend to forget my failures from time to time, but I failed a lot.

When I was in the 4th grade, I was a miserably poor reader, and was put in the lowest of the 3 reading groups. I was too active to sit still long enough to read, however, my 4th grade teacher saw something in me that led her to believe I could read better. She took the time after school, for what seemed like months on end, to get me up to speed.

When I graduated from high school, I had a 2.6 GPA, which continues to be embarrassing to admit. I eventually managed to set my sights on greater things. However, I had to spend the first two years in a mediocre college achieving a 3.8GPA to qualify for a more prestigious college.

Then, after being rejected in my application to graduate school, I found out, through some investigation, that I had been  considered  "on the bubble" for admissions due to stiff competition among the other applicants.  So I convinced the person in charge of the committee for admissions to the Psych program to an agreement: Admit me in as a provisional candidate, and, if I achieve less than a 3.8 GPA in the first quarter of school, then they can let me go. Conversely, if I achieve that GPA or more and am viewed by the professors as a valued student, then I'll be accepted to the program. I made the GPA and was voted as student representative to attend faculty meetings.

Those types of initially frustrating experiences have tended to follow me around in life. My hunch is, that if most of you who have been marginally successful think about it, you can come up with similar stories and events in your own life.

But what’s happening in our brains as these experiences occur that seem to lead, eventually for some, to success? Here is one explanation:

"With success, people keep on doing the same thing. When they fail, they are forced to adapt and change. That is not just a human characteristic but constitutes a basic feature of how the mammalian brain works.

If a lab rat no longer gets rewarded for pressing a lever that had yielded food pellets before, it gets visibly upset. As its frantic efforts fail, it resorts to all manner of strange, or novel, reactions; from grooming itself to biting the lever, or leaping into the air. It is learning that the world has changed and its brain is getting rewired, so to speak.  When one combines emotionalism with originality, that is fairly close to what most people think of as artistic creativity. Artists are not necessarily frustrated people but tend to be dissatisfied with what they have accomplished previously and try to do something better, or something new."

How do you handle failure? And...How do you view and treat others who fail?

The answers to those key questions may be two of the most important differentiators between the best leaders and the worst. Don't get stuck hiring only people who have succeeded recently. Many of those who have failed recently may have the best success tomorrow. (With the exception of people who fail at moral and character failure- we have to be more careful here).

Question:  Do you have a failure in your life that later contributed to your success?  Share your story—we’d enjoy hearing your experiences.

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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 Dr. David Mashburn. Dave is a Clinical and Consulting Psychologist, a Partner at 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.