Real Estate Insurgency, Part 2: Organizing the Cell

In part 1 of this series, I discussed the First Principle of real estate insurgency: Never Fight on Their Turf.  The extension of that principle meant that insurgents have to figure out how to outmaneuver then neutralize the primary advantage of Big Brands: breadth of brand (aka, brand recognition).

So let’s suppose you’re an insurgent and you have managed to outmaneuver and neutralize the Big Brand advantage.  Now what?  Since I’ve been watching some NBA Playoffs the last few days, I’m afraid you’re in for a lot of basketball analogies people. 🙂

Second Principle: Build A Team, an NBA Team

This is less of a principle than a prerequisite for being a relevant insurgent that can contend at all, but we really should discuss it now.  Before you can outmaneuver or neutralize anybody, you need to make sure that you have what it takes to actually do the business of real estate at a high level.

Based on my conversations and research, every successful insurgent is built in a fairly specific way: one or two superstars with a cast of role players supporting them.  That is exactly how most agent teams are built, of course, and it’s the template for real estate insurgents.

The superstar will often be the owner/leader of the team (but does not have to be the operational leader and probably shouldn’t be) who will be the major rainmaker.  The GoodLife Team I mentioned in Part 1 is anchored by Krisstina Wise, uber-agent.  The McMonigle Group (although ostensibly part of the Big Brand Coldwell Banker/NRT, show me where you can spot those brands on the website) is anchored by John McMonigle.  Closer to home here, the Sue Adler Team is built around Sue herself, and without her ability to draw clients, land listings, and close business, it isn’t clear that there would be much to talk about.

I believe the Insurgent is built like a successful NBA team, whereas the successful Big Brand is built like a successful NFL team.  In the former, individual star players make an enormous difference and brings the rest of the team up; in the latter, a superstar on a subpar team just gets frustrated, underperforms, and gets dragged down by his team.  The difference is between Lebron James and Darren McFadden.  Conversely, a good basketball system cannot create a superstar out of middling players, while a solid NFL team can make a star out of a guy drafted 199th overall in the sixth round.

However, the prevailing wisdom in the NBA is that in order to win a championship, a team needs two superstars.  Single acts don’t fly.  This rule also applies for insurgent teams.

Inside Game, Outside Game

Because Insurgents are built around one charismatic superstar leader, I believe that it is essential to pair up with a disciplined operational leader.  The lead agent rainmaker may be the CEO of the operation, but just as important will be the COO of the Insurgent who runs the inside game.

There are three reasons for this — two practical, and one strategic.

First, there are very few people in the world who are great at both the Outside Game of business development, sales, and client management and the Inside Game of business operations, financial oversight, and personnel management.  Being a good visionary and storyteller — essential for the Outside Game — often conflicts with being a good detail-oriented guy and numbers analyst — essential for the Inside Game.

Second, there are only 24 hours in a day.  16 hours if you want to, y’know, sleep and eat and stuff.  Every hour that the Superstar has to spend running team meetings, training staff, or recruiting is an hour that the Superstar is not spending bringing in revenues.

Third — and perhaps most importantly — a single individual, no matter how good, can be neutralized with greater ease by the competition.  For example, without doing anything unethical, as a Big Brand player feeling the heat a bit, I might send a ton of business and referrals to the solo agent in order to erode the overall customer service experience as the agent is running around trying to make everything happen without dropping any balls, then talk up how our Big Brand System has layers of support.  It’s short-term loss for long-term victory.

Or I might try to isolate the individual agent from support networks, referral networks, and the like — slightly more unethical, but easily done to a single person.

But a superagent teamed with even a single superior operator is far far more difficult to deal with.  A well-constructed team with all of the support elements put together is a serious threat.

Elements of a Real Estate Insurgency Cell

So what are the critical components of a Real Estate Insurgency cell?

• Lead Rainmaker
• Operations Chief
• Marketing — Includes interactive, offline and PR (as well as any social media efforts).  It is important that this role is focusing on marketing the services of the Insurgent team rather than the properties of its clients.
• Technology — Operate and manage backend systems, such as CRM, lead management, telecommunications, database, and financial reporting systems.
• Transaction Agents — The last thing you want is for your Lead Rainmaker to be spending a bunch of time on details of a particular transaction.  These are your “agents” if you will who take the Lead Rainmaker’s clients and work with them on the actual transaction.  Most of the property marketing should come from this group, not from your Marketing team.

You can always add on other functions, such as Finance, Legal, etc., but those are the critical components.

Points of Failure

Where nascent Insurgents often fail is in three places: Lack of a real Operations Chief, Miscast Marketing, and Nonexistent Technology.

In many cases, the Lead Rainmaker is also the founder of the team and takes on far too much of an operational role.  He might bring on an office manager or an admin, but doesn’t ever really relinquish operational authority or control — hiring and firing, budgets, and training.  Often, he doesn’t hire the right person to run Operations — an Admin can hardly be faulted for not knowing how to construct a budget or a hiring plan or managing the entire staff.  It is important that the Lead Rainmaker sees his role as the Outside Game, and cedes control over the Inside Game to the appropriately talented Operations Chief.

Marketing is often miscast.  Yes, marketing a client’s listing well is important… to operations.  But marketing’s true function is to market the Insurgent team to clients, ensuring differentiation, marketplace superiority, and brand consistency.  Insurgents should be thinking about the marketing mix (“4P’s” of marketing — Product, Price, Promotion, and Place) to ensure competitive advantage.  Above all, Marketing should be the Lead Rainmaker & Operation Chief’s hand of justice in enforcing the brand promise and brand vision throughout the ranks, while making sure that customer loyalty and customer feedback are reaching the organization for continual improvement.

Technology is often nonexistent.  Insurgents don’t have the resources to have a fulltime technology manager in-house, and rely on a web of outside vendors and suppliers for everything from web hosting to CRM systems.  But given how critical technology is for competitive advantage, I believe the Insurgent should at least retain a consultant to provide strategic guidance on what systems to deploy and how, with an eye towards bringing that role in-house as soon as possible.

I Got A Def Posse, You Got a Bunch of Dudes

Of course, the Insurgent must recognize that every Big Brand today is deploying the team framework throughout its organization.  What’s the difference between some “Huge Success Team” at Big Brand X and the Insurgent team?

In theory, there is no real difference.  And in the next part, we’ll explore how the Insurgent will use this trend to its advantage.  But for our purposes today, the key is to recognize that in practice, the difference will come from organization.  The Insurgent is a team organized like a championship NBA team: complementary players who understand their role, surrounding two superstars, one who is the franchise player and the other who is the ideal supporting mate.  The “Big Brand Team” is often a group of agents who just choose to market themselves under a particular Rainmaker’s name, but otherwise function independently: it isn’t a real team, but a group of agents.  Just like the Big Brand itself.

Unity of purpose, consistency of brand execution, and a tight role-based organization will create real differentiation in the marketplace for the Insurgent.  And that allows for outmaneuvering, neutralizing, and ultimately defeating the Big Brand in the Insurgent’s market.

-rsh