Mmmmm.....Secret Sauce

I think the secret sauce of any successful business is strategy. I've tried the "fly by the seat of your pants version". I don't recommend it. These days it seems that everyone wants to pin the future success of the real estate industry on technology strategies. To be sure the industry is finally starting to experience the impact but it's only one small part of the equation. The real sea change is being driven by an entirely new kind of consumer and a constantly shifting business landscape. If the future success of real estate professionals was dependent upon technology alone, they wouldn't have that much to worry about. When it comes to technology, the barriers to entry have never been lower and for that matter, most of the tools we're seeing today are not that new or unique.

Brokers and agents need more than access to technology. Perhaps what is needed is a deeper understanding of basic business acumen and execution. Understanding branding, marketing, advertising, business planning etc. Creating and implementing top notch marketing strategies at a broker, agent and listing level are just as crucial as understanding the mediums that people are using to consume the messages. I noticed Real Living just hired a new executive in charge of professional and organizational development (PDF). Brilliant. After all, what good is all that technology and strategy if put in the hands of people that lack the proper skills to execute them?

Those that master the ability to apply technology to the tenets of professional business and superior customer service are going to win. It's not rocket science. It's all in the execution.

Why Do You Need A Strategic Plan?
Goals are great and setting a realistic target and staying focused on your progress is important. Without a clearly defined strategy for getting there it's just a number.

"Being a business entrepreneur today takes constant vigilance in order to be able to take advantage of new opportunities and the availability of new information and technology as they come into being." The first step in doing this is to have a plan.~US Small Business Administration

A strategic plan doesn't have to be that formal, and it should be something that has built in flexibility to change with the market conditions and services you provide. Business coaches seem to be very popular with agents these days. From what I've seen most of these coaches are old school agents with tremendous track records. Unfortunately what many of them teach seems to center around traditional methods, many of which are in decline. I'm not saying to ignore any of it, however, a fresh look at ideas outside of the industry could help you zero in on new methods, methods that could give you a substantial competitive edge. Web 2.0 isn't going away, so you're coach should know as much about the future of real estate as they do the past.

Resources For Developing Your Plan
There are people a heck of lot smarter and more successful than myself that have written on this subject. My favorite is Guy Kawasaki. His two best books are Rules For Revolutionaries and The Art of The Start. They are quick, entertaining reads. Guy has an awesome ability to dispense with a lot of the worthless noise that seems to surround the issues of contemporary business.

The second document you should read is a free publication you can download from the SBA website, Strategic Planning for The Growing Business (.DOC). This document outlines in great detail why you need to develop a business plan and the key steps to execution. By understanding how to assess the market you're in and establish goals, you can begin to piece together the strategy for getting there.

I believe if you take the time to implement an overall strategic plan, you've put in place the skills necessary to succeed on daily basis. I often watch in amazement at some of the real estate shows on cable that trot agent after agent through properties. They give it a once over and say with confidence what they would price it at. Great. Why not ask each one of them to outline every point of their strategy for actually selling it at that price and see what you get? I'll bet dollars to doughnuts there wouldn't be very much variation in the responses. I've seen plenty of agents repeat the same line that 80% of marketing a property is in the pricing. I disagree, but let's assume it's true. In today's market there's a heck of lot of competition for listings that are 80% marketed. If you're not doing something dynamic and results oriented with the other 20%, you're just going to end up treading water with the rest of the crowd.

Grey Matter, The New Open Source Movement

This month's issue of Business 2.0 has an interesting article regarding an creative new trend in business strategy. It's been dubbed "crowdcasting" and it seems to be catching on. It's basically a contest in which corporations present strategic problems to teams of MBA's. Companies invest a fee with the operators of the program and from the looks of the client rosters, (IBM, Hilton etc.), it must be an effective tool.

This isn't the kind of crap you see on the Apprentice year after year. It's not just a bunch of good looking kids in Armani suits running junior achievement lemonade stands. These teams are given real world problems and challenged to create ideas that can be implemented in meaningful ways.

I think it's a interesting alternative or at least an adjunct to consultants. The teams have different incentives to succeed and by approaching specific challenges from outside of the corporate culture or niche consultants with cookie cutter solutions it creates unique perspectives. I think the ideas generated will be out of the box and much more creative.

Sponsors in the program gain ownership of the intellectual property generated by the competitions. I'm guessing if you compare the sponsorship investment to a consulting agreement, it's a bargain. If I were operating a large brokerage or perhaps even a regional MLS, I would consider this as a means to approaching some of the challenges taking place in the real estate industry today. I'm sure they would salivate at the opportunity to create ideas for overcoming the issues of new real estate business models, government intervention in business practices and more. One of the best reasons to do it can be gleaned from this quote by Stephen Liguori of GE Money, a sponsor of crowdcasting.

"This is a chance to tap into not just the best and brightest business minds in America but also the thought leaders and early adopters that are going to be our best customers down the road."

This is a great concept, let's face it, the group of braniacs building these new strategies would the very demographic the solutions need to be developed for in the first place.

There are two companies identified in the article that facilitate the competitions, Idea Crossing and Innocentive. Innocentive is an Eli Lilly spin off that focuses more on challenges facing bio-chemistry and pharma related issues but I think as the concept moves more into a mainstream vertical service you'll probably see them take on other business issues. Idea crossing has a web platform that looks impressive. The "challenge accelerator" concept is a great way to get the collaborating participants, judges, teams etc. to facilitate the timeline of the program. Title insurance execs may want to take notice of this, why not have these guys take on the challenge of the ultimate transaction management platform?

It will be interesting to see what these competitions generate and how effective they will be in plotting the course of the sponsors that invest in them.