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REBGV BOARD RETREATSparkling Hill Resort Adam Lerner, @ADAMLERSolvable, @SOLVABLE | http://SOLVABLE.CO Journey of Discovery http://web.bcrea.bc.ca/jod/index.htm
22 APRIL 2015
Insights from the Journey of Discovery
Insights from BCREA’s Journey of Discovery
Image Credit: Boing Boing http://boingboing.net/2014/05/20/disneylandprospectus.html
Insights from BCREA’s Journey of Discovery
Image Credit: “Tomorrowland” by Thomas Duesing under Creative Commons Attribution 2.0 Generic (CC BY 2.0)
Insights from BCREA’s Journey of Discovery
JOURNEY OF DISCOVERY
Fall2013
December2013
January2014
February2014
February2014
March2014
April2014
May2014
May2014
May2014
June2014
June2014
July2014
August2014
July2014
Task Force & JOD Research
Team Formation
REALTOR® Corner (4)
(January–March, 2014)
Future of the REALTOR®
Maestro Conference
Whistler Leadership Days
Presentation
Real Estate Transaction View Report
Extraordinary Moments
Facebook Launch
Secondary Research Report
VIREB Managing Brokers
Presentation
Forces of Industry Change
Reports (5)(May–July, 2014)
Forces of Industry Change
Webinars (3)(June–July, 2014)
JOD Research Summary
Report
Expert IDI & Regulator In-
Depth Interview Reports
BCREA AGM Presentation
Disruptive Change Report
Strategic Options Report and
Presentation
*
BCREA LEADERSHIP DAYSJOURNEY OF DISCOVERYUPDATE29 MAY 2014
*Strategic Planning Sessions
(September 2014)
A Tale of a 12-Month Journey of Discovery
Insights from BCREA’s Journey of Discovery
Fact-based decision making for BCREA’s 2015–2019 Strategic Plan, as well as to assist member boards in their planning
Purpose
Insights from BCREA’s Journey of Discovery
WHAT WILL THE PRACTICE OF THE REALTOR® LOOK LIKE IN FIVE YEARS?
Insights from BCREA’s Journey of Discovery
Image Credit: “F5 tornado Elie Manitoba 2007” by Justin1569 at en.wikipedia. Licensed under CC BY-SA 3.0 via Wikimedia Commons
Inside or Outside the Tornado?
Insights from BCREA’s Journey of Discovery
Industry 360° > Secondary Research Synthesis> Expert Interview Report > Regulator Interview
Insights from BCREA’s Journey of Discovery
Existing Knowledge: Agreement & Dissent> Real Estate Board Research (CDN/U.S.)> Real Estate Association Research (CDN/U.S.) > Real Estate Consultant Reports> Journalism
Collation of insights from 21 reports
Our Starting Point
Insights from BCREA’s Journey of Discovery
David BaxterUrban Futures Institute Special Advisor
Larry BeasleyUBC, Chief Planner City of Vancouer (retired)
Graeme EadieReal Estate, Canada Pension Plan Investment Board; CEO Cadillac Fairview (former)
Michael GoldbergUrban Land Professor Emeritus, UBC Sauder School of Business
Bob HaleHouston Association of REALTORS® (HAR)
Stan HamiltonUBC Sauder School of Business, Faculty
Nobu HataNAR, Digital Engagement
Adam WienerRedfin, Marketing, Analytics, New Business
Insights from BCREA’s Journey of Discovery
> Shifting transaction models> Pressure on commissions & business models> Rise in consumer autonomy> Demographic shifts, consumer technologies
and data access challenge REALTOR® expectations and value
> Decline in word-of-mouth referrals> Correlation between technology adoption and
REALTOR® success> REALTOR® specialization & fragmentation
Emerging Themes
Insights from BCREA’s Journey of Discovery
> Consumer perspective> Consumer behaviour shifts in REALTOR®
loyalty, discovery and transaction involvement> Significance of more and accessible data as
information asymmetry disappears> REALTOR® business model innovation> Millennial REALTOR® ORE membership
Identified Knowledge Gaps
Insights from BCREA’s Journey of Discovery
The Council perceives no issues with> Number of licensees entering/leaving> Number of complaints filed> Licensing standards> Continued self-regulation
Plans to increase consumer communications about the Council, its role and the role of licensees.
View from the Real Estate Council
Insights from BCREA’s Journey of Discovery
Real Estate Transaction View
Insights from BCREA’s Journey of Discovery
> Decisions on FEAR vs. wow> Switching: between & midstream> Delayed REALTOR® selection> Searching for differentiation: rise of auditions> Rise of online search & referrals
REALTOR® Selection
Insights from BCREA’s Journey of Discovery
Buying Process
Consumer Involvement
REALTOR® decision delay
Consumer
REALTOR®
Insights from BCREA’s Journey of Discovery
> Dream: a lost opportunity for REALTORS®> Search: content with the DIY’er> Evaluate: fear of bias due to self-interest> Offer/Negotiate: high value, opaque process> Closing: from the informal to the checklist
Buying Process
Insights from BCREA’s Journey of Discovery
> General discount with value of services> Confirmation of listing price estimates> Listing price auditions reveal cookie–cutter
marketing plans> High value role in negotiations yet opaque
assessment beforehand> New approaches for sophisticated sellers
Selling Process
Insights from BCREA’s Journey of Discovery
WHAT CAN BCREA DO TO ADVANCE A MORE SUSTAINABLE AND THRIVING INDUSTRY FOR BCREALTORS®, BROKERS & ORE?
Insights from BCREA’s Journey of Discovery
1. CONSUMER AUTONOMY
2. REALTOR® PROFESSIONALISM
3. REALTOR® MATCH
4. RURAL & URBAN
5. SERVICE INNOVATION
Forces of Industry Change
Insights from BCREA’s Journey of Discovery
Consumer Autonomy
Insights from BCREA’s Journey of Discovery
What? The ability for consumers to choose products/services independently, rationally and without undue influence or pressure.
Why?Driven by a consumer desire for an unbiased process and perceptions of value for service.
Consumer Autonomy
Insights from BCREA’s Journey of DiscoveryImage Credit: Amazon.com Image Credit: The New York Times (Link)
Watch Echo
Identifying Friction
Insights from BCREA’s Journey of Discovery
Image Credit: Josh Breinlinger, Disintermediation in Marketplaces and How to Avoid It (Link)
Disintermediate the Middle(wo)man
Insights from BCREA’s Journey of Discovery
Count Yourselves Lucky
Insights from BCREA’s Journey of Discovery
Insights from BCREA’s Journey of Discovery
Image Credit: James Willock, “build($ikea->desks),” under Creative Commons Attribution-ShareAlike 2.0 Generic
The IKEA EffectThey build it. They love it.
Watch the Video
Insights from BCREA’s Journey of Discovery
REALTOR® Professionalism
Insights from BCREA’s Journey of Discovery
Very low / Low
%
24
25
20
22
23
26
22
23
25
26
27
25
26
22
25
34
31
28
30
Rising from the Bottom
Image Credit: Gallup “Honesty/Ethics in Professions”, December 5–8, 2013
Insights from BCREA’s Journey of Discovery
Professionalism as the main driver of buyer and seller dissatisfaction.
REALTORS® greatly desire a sea change.
Insights from BCREA’s Journey of Discovery
Quality Standards & Continuous Improvement
Image Credit: Airbnb
Insights from BCREA’s Journey of Discovery
Standard Enforcement
Image Credit: Ushahidi-Haiti Tufts University
Insights from BCREA’s Journey of Discovery
REALTOR® Match + Quantitative Research
Insights from BCREA’s Journey of Discovery
Q21: How valuable are the following types of information for selecting a real estate Agent?
Value in the Information
Insights from BCREA’s Journey of Discovery
And They Are Just Warming Up
Image Credit: IBM Research Accelerating Discovery: Social Analytics
Watch
Insights from BCREA’s Journey of Discovery
Rural and Urban Report
Insights from BCREA’s Journey of Discovery
Incompatible Data Boundaries
Image Credit: Urban Futures Census Divisions in BC http://www.urbanfutures.com/maps/cd-bcw
Insights from BCREA’s Journey of Discovery
85% Urban / 15% Rural
Image Credit: Urban Futures Canada’s Urban and Rural Portrait, http://www.urbanfutures.com/rural-urban
Insights from BCREA’s Journey of Discovery
Service Innovation
Insights from BCREA’s Journey of Discovery
Image Credit: Jerry “Woody”, “GREAT BRITAIN, ENGLAND, MANCHESTER 2007” under Creative Commons Attribution-ShareAlike 2.0 Generic Image Credit: Über Cool, Über Cab, Sweet Lemon
Barriers to Entry
Insights from BCREA’s Journey of Discovery
“Uber is building a digital mesh–a grid that goes over the cities. Once you have that grid running, in ever one’s pockets, there is a lot of potential for what you can build as a platform. Uber is in the empire-building phase.”
Insights from BCREA’s Journey of Discovery
What Race is BC ORE Running?
Image Credit: The Æsop for Children, Illustrator Milo Winter
Insights from BCREA’s Journey of Discovery
1. Who we serve2. What we serve “customers”3. How we serve “customers”
Reidentify
Insights from BCREA’s Journey of DiscoverySLOANREVIEW.MIT.EDU SPRING 2013 MIT SLOAN MANAGEMENT REVIEW 33
company high marks on external success (which
they ranked No. 1 among 18 factors) and enterprise
success (No. 6 among 18 factors), but ranked the
company poorly on the individual component of
success, ranking it No. 16 out of 18 factors. Employ-
ees also ranked the company’s leadership poorly on
engaging the rest of the workforce; the “engage”
factor ranked lowest among the 18 factors. (See
“Ranking Innovation Factors at a Latin American
Agribusiness.”) Individual employees did not take
the initiative in innovation activities (ranked No.
53 out of 54 elements), perhaps partly because the
leaders did not coach and provide feedback to em-
ployees (ranked No. 50 out of 54 elements). Many
employees felt that they did not have adequate sup-
port from leadership during success or failure of
projects (ranked No. 46 of the 54 elements). Nor
did they think the company would reward individ-
uals for participating in potentially r isky
opportunities (ranked No. 51 out of 54 elements).
After a healthy discussion of the survey results,
the executive team set out to develop the next layer
of management through management training
programs coupled with delegation, coaching, sup-
port and feedback systems — and most of all, by
changing their own behavior.
Everyone’s Opinion Counts We find that people
at or near the top — the individuals who make the
decisions and control activities — often tend to
have a much rosier view of their organization’s cul-
ture than do mid- to lower-level managers and
rank-and-file employees. Executives, like everyone
else, naturally think that they are doing a good job.
Further, executives do not always have a complete
view of enterprise reality; they simply cannot see
everything that goes on.
Executives are also often at odds with their em-
ployees in terms of where they see the greatest
strengths. Most executives rate their companies as
being stronger in the more intangible, people-ori-
ented building blocks (values, behaviors and
climate) than in the more tangible, tool-oriented
ones (resources, processes and definition of suc-
cess). People lower in the enterprise often make the
opposite assessment.
If given to a broad enough group, the survey can
help correct for these two imbalances, by, in effect,
giving 360-degree feedback to capture the insights
of many and bring to light things that the bosses
cannot see.
Elimination of Conjecture and Barriers to
Change The bigger the organization, the more re-
sistant the enterprise is to change.8 This trait seems
to be most pronounced in multinational compa-
nies. Managers often blame poor acceptance of new
strategies, sloppy implementation of enterprise-
wide projects and lack of standardized processes
across geographies and divisions on subcultures
within the enterprise.
A structured cultural assessment using some-
thing like the Innovation Quotient survey can
check the veracity of such complaints. For exam-
ple, a global medical device company wanted to act
upon a more coordinated global operations strat-
egy. Two years into the program, the executives
and senior managers of the company spoke of big
challenges due to the cultural differences between
their European and U.S. operations, and also be-
tween the R&D and manufacturing groups in
those two geographies. To everyone’s surprise, the
assessment results found no statistical differences
between the units’ responses for each of the six
building blocks — suggesting that their problems
were due to some other issue.
RANKING INNOVATION FACTORS AT A LATIN AMERICAN AGRIBUSINESSEmployees at a large, family-owned Latin American agribusiness gave the company high marks on external success (which they ranked No. 1 among 18 factors) and enterprise success (No. 6 among 18 factors), but ranked the com-pany’s poorly on the individual component of success, a factor they ranked No. 16 out of 18. Employees also ranked the company’s leadership poorly on en-gaging the rest of the workforce; the “engage” factor ranked lowest among the 18 factors.
Resources
Processes
Success
Values
Behaviors
Climate
12
3
11
People
Systems
Projects
14
9
17 Ideate
Shape
Capture
1
16
6
External
Enterprise
Individual
2
8
5 Entrepreneurial
Creativity
Learning
4
18
7 Energize
Engage
Enable
13
10
15
Safety
Simplicity
Collaboration
ORE Cultural Capacity for Innovation
Image Credit: Six Building Blocks of an Innovative Culture How Innovative Is Your Company’s Culture?, MIT Sloan Management Review
Insights from BCREA’s Journey of Discovery
Disruptive Change Report
Insights from BCREA’s Journey of Discovery
Rate of change
AndWhether the change is significant
Lacking Agreement
Insights from BCREA’s Journey of Discovery
Ask Those Following Disruption
Rob Hahn7DS Associates
David EavesEaves Consulting
Jeremy ConawayRECON Intelligence Services
Doug Devitre
Insights from BCREA’s Journey of Discovery
267 responses in 24 hours
Garth Turner was “Blown Away”
http://www.greaterfool.ca/2014/05/20/they-asked-for-it/
Insights from BCREA’s Journey of Discovery
BCREA Journey of Discovery: Disruptive Change Report
ROB HAHN (PGS 07–08)
1. Elance, The BrokerageThe real estate transaction becomes highly fragment-ed, highly specialized, and highly outsourced.2. Zillow Killed the Franchise StarWill franchises be able to charge their 6% royalty fees when Zillow, Trulia and Move become the dominant brands synonymous with real estate?3. Real Estate Agents Become EmployeesGovernmental entities eliminate the “loophole” of clas-sifying real estate agents as independent contractors, and 80% of REALTORS® are fired the next day.4. Large Brokers Flex Their MusclesA database is created that sits between the brokerage and the MLS®, thereby granting total control over list-ing data to the brokerage5. Banks Enter the Portal BusinessTo control the consumer at the top of the funnel for mortgage leads, another bank, mortgage company, or other financial institution enter the portal business.
DAVID EAVES (PG 10) 1. The Collapse of Some BrokeragesLarge brokerages without a clear brand or resonance in the marketplace go under.2. The Bubble BurstsAt some point the housing market will stumble or fall, which could force consolidation or cause a temporary decline in the number of REALTORS®.3. Baby Boomers Continue to DownsizeThis will have a big impact on the types of housing that is built and the large number of single family homes occupied by empty nesters.4. Driverless CarsThese cars could increase the outer range of a city rather than concentrating growth in the downtown core.5. More Data in Consumers’ HandsConsumer access to more information will cause prime neighbourhoods to be more readily identified and undesirable ones to be readily avoided.
JEREMY CONAWAY (PGS 12–13)
1. Standards/Accountability/Transparency FailureOutside parties set standards for the residential real estate industry that promote their agendas rather than the best interests of REALTORS®.2. Drive for Greater Profitability by New Entrants Companies are creating new business models that dramatically impact ROI, and thus cause Wall Street to demand other public companies follow their lead.3. The Failure of Millennials to Buy HomesA change in the overall passion and interest in home ownership by Millennials would be dire for a number of existing economic and business interests. 4. Comprehensive RegulationThe industry and marketplace deal with an omnibus regulatory framework by government regulators for economic stabilization and/or consumer protection. 5. Government Funds Growth through Taxation A tax on real estate commissions might put consum-ers, brokers and REALTORS® at odds regarding which should be paying the tax.
DOUG DEVITRE (PG 16)
1. Self-Diagnostic Tools for the CustomerTechnology companies are building tools for custom-ers to analyze their situation and to deliver advice to the questions traditionally asked of REALTORS®.2. Increased Demand for ROITransparent performance information will surface, and alter how ROI is calculated and communicated.3. Executing the Transaction from Your PajamasA whole new set of best practices, presentation skill sets, and language to influence will need to be devel-oped to justify the augmented working relationship.4. Cross Channel UsabilityOnce task metrics such as online completion, error, and satisfaction rates surface across multiple devices, leaders will need to improve the customer experience.5. Increased Participation and RevenuesIf the association could access the performance met-rics for each REALTOR®, they could quickly suggest products and services to close performance gaps.
The Top Five Future DisruptorsThe full descriptions can be found on the associated page numbers
05
Insights from BCREA’s Journey of Discovery
Strategic Options Report
Insights from BCREA’s Journey of Discovery
Industry Factors
In Three Acts: Part One
9 consumer and market factors that
BCREA may contribute to, but does not
control the destiny of
Insights from BCREA’s Journey of Discovery
Industry Factors
Strategic Categories
4 areas of strategic focus over the next five years
In Three Acts: Part Two
Insights from BCREA’s Journey of Discovery
Strategic Options
Strategic Categories
Industry Factors
10 initiatives that support the strategic
focus areas
In Three Acts: Part Three
Insights from BCREA’s Journey of Discovery
1. BC MLS®2. CONSUMER EXPECTATIONS3. NUMBER OF BC REALTORS®4. REALTOR® REPUTATION5. REALTOR® VALUE PROPOSITION6. REGULATION7. SIGNIFICANCE OF BROKERAGES8. STRUCTURE OF BC ORE9. TECHNOLOGY
Nine Industry Factors
Insights from BCREA’s Journey of Discovery
1. STRENGTHENING PROFESSIONALISM
2. IMPROVING REPUTATION
3. ENHANCING CUSTOMER EXPERIENCE
4. ENCOURAGING INNOVATION
Four Strategic Categories
Insights from BCREA’s Journey of Discovery
CATEGORY 1: STRENGTHENING PROFESSIONALISM• REALTOR® ACCREDITATION• QUALITY ASSURANCE• EDUCATING THE NEXT GENERATION OF LEADERS
CATEGORY 2: IMPROVING REPUTATION• ADVOCACY• MATCHING REALTORS® & CONSUMERS• REALTOR® BRAND APPEAL
CATEGORY 3: ENHANCING CUSTOMER EXPERIENCE• CREATING EXTRAORDINARY CUSTOMER EXPERIENCES• CENTRAL RESEARCH SOURCE
CATEGORY 4: ENCOURAGING INNOVATION• TECHNOLOGY EVALUATION• NEW TECHNOLOGY INVESTMENT
10 Strategic Options
Insights from BCREA’s Journey of Discovery
Image Credit: “HoratioNelson1” by Lemuel Francis Abbott, National Maritime Museum
“ Never mind maneuvers, just go straight at them.’’
Insights from BCREA’s Journey of Discovery
Thank You.
Journey of Discovery, http://web.bcrea.bc.ca/jod/index.htm
Adam Lerner, @ADAMLERSolvable, @SOLVABLE | http://SOLVABLE.COlinkedin.com/in/ADAMLER