Blogs

To be an effective leader, you must be able to thrive in the tough times.

Volumes are being written about the dynamics of today’s North American residential real estate industry. While only historians will have the ultimate privilege of defining and designating the nature of the current industry environment, it is highly likely that their choice of words will exceed turmoil.

Leadership, vulnerability and survival are ideas that were on everyone’s mind. In some industry segments, we are watching in amazement at what can only be described as a dearth of leadership. In others, we observe what appears to be leadership even though we instinctively know that it is exerted in the wrong direction. In still other segments, we see moments of brilliance that give us hope for the future.

For many, the leadership sector that is of most concern is that which reflects one’s own efforts and energies, those sectors that they have been assigned, have accepted or feel a burden or responsibility.

Are You Adapting?

Today’s industry leaders are often mesmerized as they watch the industry unfold. In the face of this spectacular rate of change, few do not feel the need to adjust leadership courses, approaches, strategies and tactics. Even those with constitutions and commitments that require, even demand, that they stay the course, feel the gravitational pull of change and transition.

What is it that leaders can do to ensure that their personal leadership is adjusting and responding in a manner that is appropriate for these extraordinary circumstances?

Adjusting and Thriving

A solid first step is to accept that these are extraordinary times for our nation, its economy and our industry. Understand that these roads have been traveled before. Read “No Ordinary Time,” by Doris Kearns Goodwin. It chronicles America’s leadership challenges during the early years of WWII when suddenly everything was the same and everything was different. Learn how men and women in virtually all walks and stations of life met challenges that might seem quite similar in intensity to those facing our industry today.

•   Accept the fact that regardless of life’s experiences, wealth, power and/or influence, few have led in this environment before.

•   Understand that the refusal to accept this reality places a crippling handicap upon the industry’s leadership potential.

•   Appreciate the fact that every aspect of the marketplace and transaction has changed, is changing or will change over the next few years.

•   Realize that your cumulative leadership portfolio, regardless of how magnificent it may be, will probably not serve you well without some adjustment.

•   Consider the fact that almost all of the factors that surround industry leaders, including shareholders executives, managers, agents, customers, financing methodologies, technologies and even competitors, are in change mode. Business cultures, as well as associated practices, ethics, rules and regulations, are all transitioning.

Together these forces are creating a new world, one that requires that you adjust and perhaps even overhaul your leadership style, strategies and tactics.

A New Approach

Leading in the midst of turmoil, even for the most accomplished of leaders, requires a significantly different approach. Whether the turmoil is viewed as an opportunity or as a threat, it requires competencies that are markedly different from those used in a normalized environment. Leading in turmoil that is viewed as a threat constitutes a struggle. Leading in turmoil that is perceived as an opportunity constitutes a campaign. How leaders handle their leadership struggles or campaigns over the next two years will, more than any other factor, determine the real estate market’s new configuration.

It is a cause for concern how many leaders are attempting to fool themselves as well as those around them, both allies and competitors, by sending out false bravado signals. Leadership modification is mandatory. There are struggle-related leadership strategies and tactics, and there are campaign-related strategies and tactics. Far too many industry leaders are declaring their experiences to be fully relevant with no change required.

Business Struggles

In 2013, Harvard Business School Professor Joseph Badaracco evaluated the concept of struggle in a business context. He presented the results of his research in a book entitled, “The Good Struggle: Responsible Leadership in an Unforgiving World,” which provides an excellent look into the unique challenges presented by the turmoil that is today’s emerging business economy.

One of Professor Badaracco’s most salient findings is that the primary characteristic of today’s business environment is turbulence. Badaracco suggests, “What’s going on now is a return to an earlier, more volatile, form of capitalism, where there is lots of turbulence. The new invisible hand of markets is even more intense than the old one due to rapid global dissemination of information.” Badaracco’s work is extremely relevant to the leadership challenges faced by the modern day industry executive and leader.

Leadership Vulnerability

Another critical concept regarding contemporary business leadership is the idea of vulnerability or, perhaps more to the point, invulnerability. One of the most destabilizing psychological factors in today’s real estate world comes from the constant drumbeat of change. Industry and brokerage leaders start each day by visiting one of the several respected blogs that currently serve the industry faithful. Over the past several months, this task has become increasingly anxiety ridden because of an unending flood of stories, intense to the minutest detail, relative to how the real estate business has changed overnight. Of course, half of what is announced will not, in the long run, make any difference at all. Yet, the daunting task of evaluating each announcement and projecting its likely impact has taken on a life and a pressure of its own. These events lead to a growing sense of vulnerability.

The severity of this situation was recently brought to the forefront when one of the blogs wrote a post that announced the employment of a former Obama administration celebrity by an industry entity. The news traveled through the industry like a shot, causing untold numbers of leaders to evaluate its possible ramifications. While the blogger must have thought that such an undertaking was cute, very few of his formally loyal readers agreed.