Insights from the Journey of Discovery

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

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Insights from BCREA’s Journey of Discovery

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http://youtu.be/xFntFdEGgws?t=17s


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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)


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


Fact-based decision making for BCREA’s 2015–2019 Strategic Plan, as well as to assist member boards in their planning

Purpose


WHAT WILL THE PRACTICE OF THE REALTOR® LOOK LIKE IN FIVE YEARS?


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?



Industry 360° > Secondary Research Synthesis> Expert Interview Report > Regulator Interview

http://cdn2.bcrea.bc.ca/BCREAJODSecondaryResearchReport.pdf

http://cdn2.bcrea.bc.ca/BCREAJODExpertIDIReport_.pdf

http://cdn2.bcrea.bc.ca/BCREAJOD_RegulatorIn-DepthInterviewReport.pdf


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


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


> 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


> 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


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


Real Estate Transaction View

http://cdn2.bcrea.bc.ca/BCREAJODTransactionViewReport.pdf


> Decisions on FEAR vs. wow> Switching: between & midstream> Delayed REALTOR® selection> Searching for differentiation: rise of auditions> Rise of online search & referrals

REALTOR® Selection


Buying Process

Consumer Involvement

REALTOR® decision delay

Consumer

REALTOR®


> 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


Selling Process

Consumer InvolvementConsumer

REALTOR®


> 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


WHAT CAN BCREA DO TO ADVANCE A MORE SUSTAINABLE AND THRIVING INDUSTRY FOR BCREALTORS®, BROKERS & ORE?


1. CONSUMER AUTONOMY

2. REALTOR® PROFESSIONALISM

3. REALTOR® MATCH

4. RURAL & URBAN

5. SERVICE INNOVATION


http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckConsumerAutonomy.pdf

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckProfessionalism.pdf

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckREALTORMatch.pdf

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckRuralUrban.pdf

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckServiceInnovation.pdf


Consumer Autonomy

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckConsumerAutonomy.pdf


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

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0&abt=0002&abg=1

https://youtu.be/KkOCeAtKHIc


Image Credit: Josh Breinlinger, Disintermediation in Marketplaces and How to Avoid It (Link)

Disintermediate the Middle(wo)man

http://acrowdedspace.com/post/28387454995/disintermediation-its-a-bitch


Count Yourselves Lucky



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

https://youtu.be/jkaWYKlnli0


REALTOR® Professionalism

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckProfessionalism.pdf


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

http://www.gallup.com/poll/1654/honesty-ethics-professions.aspx


Professionalism as the main driver of buyer and seller dissatisfaction.

REALTORS® greatly desire a sea change.


Quality Standards & Continuous Improvement

Image Credit: Airbnb


Standard Enforcement

Image Credit: Ushahidi-Haiti Tufts University


A Unified Approach


REALTOR® Match + Quantitative Research

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckREALTORMatch.pdf

http://cdn2.bcrea.bc.ca/BCREAJODREALTORMatchSurveyReport.pdf


One Step, Two Step


71% /33%

http://google.ca


The Influence of Search


Value of the Source


Q21: How valuable are the following types of information for selecting a real estate Agent?

Value in the Information


And They Are Just Warming Up

Image Credit: IBM Research Accelerating Discovery: Social Analytics

Watch

http://youtu.be/3Qe_Med9Jyw

https://youtu.be/3Qe_Med9Jyw


Rural and Urban Report

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckRuralUrban.pdf


Incompatible Data Boundaries

Image Credit: Urban Futures Census Divisions in BC http://www.urbanfutures.com/maps/cd-bcw


85% Urban / 15% Rural

Image Credit: Urban Futures Canada’s Urban and Rural Portrait, http://www.urbanfutures.com/rural-urban


Black Holes of Data


Specialized Entry Point


Service Innovation

http://cdn2.bcrea.bc.ca/BCREAJODThemeDeckServiceInnovation.pdf


A Drive Towards Efficiency


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


“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.”


What Race is BC ORE Running?

Image Credit: The Æsop for Children, Illustrator Milo Winter


Strategic Positioningvs.

Operational Effectiveness


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


Incubation


Disruptive Change Report

http://cdn2.bcrea.bc.ca/BCREAJODDisruptiveChangeReport.pdf


Rate of change

AndWhether the change is significant

Lacking Agreement


Black Swan Events Low-probability, High-impact


Ask Those Following Disruption

Rob Hahn7DS Associates

David EavesEaves Consulting

Jeremy ConawayRECON Intelligence Services

Doug Devitre


267 responses in 24 hours

Garth Turner was “Blown Away”

http://www.greaterfool.ca/2014/05/20/they-asked-for-it/


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


Strategic Options Report

http://cdn2.bcrea.bc.ca/BCREAJOD_StrategicOptionsReport.pdf


Industry Factors

In Three Acts: Part One

9 consumer and market factors that

BCREA may contribute to, but does not

control the destiny of


Industry Factors

Strategic Categories

4 areas of strategic focus over the next five years

In Three Acts: Part Two


Strategic Options

Strategic Categories

Industry Factors

10 initiatives that support the strategic

focus areas

In Three Acts: Part Three


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


1. STRENGTHENING PROFESSIONALISM

2. IMPROVING REPUTATION

3. ENHANCING CUSTOMER EXPERIENCE

4. ENCOURAGING INNOVATION

Four Strategic Categories


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


TODAYTOMORROW.....


Behind the Eight Ball


Indirect Approaches


Image Credit: “HoratioNelson1” by Lemuel Francis Abbott, National Maritime Museum

“ Never mind maneuvers, just go straight at them.’’



Thank You.

Journey of Discovery, http://web.bcrea.bc.ca/jod/index.htm

Adam Lerner, @ADAMLERSolvable, @SOLVABLE | http://SOLVABLE.COlinkedin.com/in/ADAMLER

http://web.bcrea.bc.ca/jod/index.htm

https://twitter.com/adamler

https://twitter.com/solvable

http://solvable.co/

https://www.linkedin.com/in/ADAMLER

Insights from the Journey of Discovery

Real Estate

Transcript of Insights from the Journey of Discovery