Millenials and Real Estate, Part 2: Leading vs. Managing

In my first blog conversation post, I wrote about Millenial family formation. That was fun stuff, and Travis Robertson, my dialogue partner, has posted his response. Go check it out; it’s worth a read, and the discussion is fun. But I thought I’d move onto some of the real meat.

Travis claims in the video (embedded in the first post) that companies — and specifically real estate brokerages — have to change the way they operate in order to recruit the Millenials. I don’t think so; I rather think Millenials have to change the way they operate and view the world in order to be recruited by employers, including brokerages (at least the ones that demand something of their agents).

I’m going to be referring to Travis’s posts and his eBook; and I do encourage you to go check them out.

In this part, let’s address the issue of managing Millenials.

Leading vs. Managing, According to Travis

Travis believes that one of the fundamental ways that companies have to adjust is that Millenials need to be led, not managed:

Growing up, most Millennials played at least one team sport. We had soccer moms and little league dads. We were shaped by those experiences to expect coaching – not managing.

If you want to attract and retain Millennials you and your managers have to learn how to become great coaches. Have you ever noticed what sets great coaches apart from good coaches?

  • Great coaches care about winning (results) but they know there is no set method for achieving it (methodology). Each game will be different. Each game will require different strategy. Players can’t do the exact same thing in each game and expect the same result.
  • Great coaches learn about the gifts and strengths of each team member. We can’t all be pitchers. We can’t all be star outfielders. That’s okay. You need an array of talent. Find out what we’re gifted and talented at and let us work in our strengths.
  • Great coaches give players lots of one-on-one attention. They don’t hand them a manual and tell them to “learn the plays.” Instead, they tell them to learn the plays then they work with them day in and day out practicing those plays. Most companies offer little in the way of ongoing training. And very rarely does that come from a manager. Instead, employees are shuffled to a classroom during a lunch hour.
  • Great coaches rarely sit in an office. Instead, they are down on the field working with the players. The lead from the field.

What do you think? Are you up to the challenge of becoming a great coach? Is your leadership team? What changes can you start making right now? What things can you stop doing? (Emphasis in original)

Travis cites examples like Martin Luther King, Jr. and the civil rights movement, as well as Jesus Christ and the apostles, rather than the SVP’s of Proselytization.

The fundamental criticism is that “management” is focused on process and method, rather than results. It focuses on controlling variables in performance so as to standardize the output. Travis believes this style of management is rooted in the Industrial Age assembly-line manufacturing, and is outdated for the Information Age knowledge-based service businesses.

The better method, in a knowledge economy, particularly in dealing with Millenial workers, he believes is to empower them, inspire them, and then get out of the way:

If management is focused on process and methodology, leadership is focused on outcome and results. Leaders improve results by leveraging the passion, gifts and talents of a group of people inspiring them to work toward a common goal.

Leaders are part of the team – not above it. They focus on demonstrating and coaching from the front rather than on directing and controlling from above. (Emphasis in original)

I think I captured the general gist of his arguments. Now I take them apart.

Coaches vs. Employers

What Travis leaves out is what sets great coaches apart from employers: they don’t pay their players to create marginal profit. (I’ll assume Travis means your average youth sports coach, rather than big time college football coaches who are in effect working for the minor league of the NFL, since 99.999% of Millenials were not on big time money-making college athletic programs.)

But even if we are talking about using athletics as an example, there’s an enormous missing piece here. Good coaches teach, because their raison d’etre is to introduce a young person to the athletic life. Again, excepting the most extreme examples (Texas high school football, Division I basketball, etc.), even the most competitive of junior high school coaches would recognize that their job isn’t to win games, but to teach the youngsters in their care the love of the game.

In contrast, employers do not hire people in order to introduce them to the joy of accounting. They hire them to make money. They have to, because employers who do otherwise won’t be in business for long. The anti-corporate culture of a certain segment of the population, particularly among the Millenials, is completely missing the point that a company that does not generate a profit does not get to stick around for too long. It isn’t like a youth soccer league that will stick around whether they win every game or lose every game.

The hardest and most valuable lesson a Millenial can learn is that unlike parents, unlike coaches, unlike their teachers, or even their college professors, the employer does not exist for your benefit. Companies do not hire you in order to train you. They do not offer you a job, pay you money, and give you benefits so that you can improve yourself. It’s quite the other way around. They hire you, pay you, and give you stuff so you can improve them. And for a business, the only improvement that matters at the end of the day is the bottomline. Improve the culture? Sure. Improve morale? Of course. Get inspired and all charged up? Absolutely.

As long as all that culture, morale, and inspiration is leading to more revenues, lower costs, and greater profits. Otherwise, all of that crap is out the window.

The examples of MLK and JC are instructive. As far as I know, the Apostles did not draw a salary from the ministry of Jesus. I’ll put this out right now: any Millenial or young person willing to work for 7DS without getting paid a dime is welcome to email me to see if I can inspire you to work towards a common goal: that of making more money for 7DS.

Mechanical vs. Cognitive

A closely related assumption that has to be challenged is the idea that there is such a world of difference between the Industrial Age “mechanical” tasks and Information Age “knowledge” tasks.

The flawed assumption is that every “knowledge” based job is some sort of a creative endeavor to solve problems. Fact is, the knowledge economy is a steep pyramid. At the top, you have the creatives. These are your lead software engineers, the senior managers, the creative directors, the chief architects. These are the men and women who are paid for their knowledge, innovative thinking, creativity, and understanding of business. This is your Steve Jobs and your Jonathan Ive. Below them, you have a group of managers who are valued primarily for Getting Things Done. That requires creativity, leadership, discipline, and knowledge — but they’re not paid for their ideas. They’re paid for executing those ideas.

And then at the bottom, you have legions of coders, junior “designers” (who don’t actually design anything, but just code the designs that the Creatives have come up with), customer service reps, draftsmen, pattern-makers, technical designers, writers, and so on and so forth. At this level, the standardization, process controls, and method are supreme. They have to be.

Take just one example: checking out source code. Every serious software development shop has rigorous methods of checking in and checking out source code. The reason is that you can easily overwrite someone else’s work without these controls. No matter how creative, how inspired, how results-oriented the 22-year old junior coder responsible for one little section might be, she cannot under any circumstances circumvent check-in and check-out.

Junior document review attorneys do not get to be creative with how they’re supposed to read thousands of pages of a currency swap contract. The senior partner has set the legal strategy, the junior partner and the senior associate have formulated what specific elements they need, and what they require of the junior knowledge workers is that they produce those specific data points from a mountain of paperwork. That’s it.

Even Travis’s example of customer service is flawed. In any well-run shop, there are rules and procedures and methods that each and every customer service rep will follow, period, end of story. The young whippersnapper CSR might think it’s cool and hip to use cuss words during a call, y’know, to “keep it real, bro”, and believe that it would achieve the End Result of superior service. There isn’t a manager who wouldn’t fire that CSR on the spot unless the company policy allowed the technician to say things like, “Oh *bleep*, your *bleeping* cellphone is fried again? *Bleep*, that sucks!”

Yes, leadership is great to have, and it’s rare. But let’s not delude ourselves that because you’re a 23-year old tech support rep that the CEO has to change his company culture or move away from processes to retain your services. There are 79,999,999 others just like you (and more — see below on that).

Management vs. Leadership

Finally, and perhaps most importantly, Travis is taking down a straw man. He paints the picture of the “manager” as the clueless pointy-haired boss from Dilbert who has to buckle down on methods and process, because he doesn’t get that results are what matter, while the “leader” is this charismatic cat who knows how to earn loyalty, work one-on-one with even the most junior staffer, and inspires them to new heights of personal satisfaction.

That’s not a difference between a “manager” and a “leader”; that’s the difference between a crappy manager and a great manager.

Let’s look at a “knowledge-based service delivery” organization that happens to be extremely good at delivering its particular “service”: the United States Marine Corps.

The officers of the Marine Corps have responsibility for the lives of their men and women. They have impossible pressure to find, defeat, and kill the enemies of the United States in hostile territory where making a mistake doesn’t mean that the quarterly financials are off by 3%, but that they don’t get to go home ever again along with their fellow soldiers. They work in an environment where methods and procedures are almost certain to change: as is often said, no plan survives contact with the enemy. If group of managers/leaders cares more about achieving the best possible End Result with minimal losses, I’d like to know who that is.

Do we think these officers skip over fire team procedures, or weapon inspections, or drills and exercises because those are mere methods and processes? Do we think that they don’t manage the inputs and control variables because they are leaders who get out in front of their platoons carrying a rifle with them? Do we seriously believe that they’re not directing and controlling from above? General Petraeus isn’t in the field carrying an M-16.

Every single effective manager I have ever worked for, ever seen, ever met is also a leader. And that isn’t restricted to knowledge-based companies. Nor is it something new to Millenials. The effective manager of some assembly-line factory floor isn’t just some guy sitting behind a desk issuing memos. He’s a real leader who does everything Travis is describing in terms of inspiring, disciplining, teaching, and the rest of it — but he also manages the process, because that is how success is built.

In fact, in my experience, managing people is the single hardest thing anyone can do for a living. It’s really, really, really hard to do right. And I confess that I have not met a single leader in the mode Travis describes, able to inspire the staff, who wasn’t also an extraordinary manager.

There is nothing new to this dynamic of management and leadership. Millenials didn’t invent this. We Gen-X went through the same thing. And before us, the Boomers, and the Greatest Generation, and so on and so forth. Managing the Roman legions was, I’m certain, a difficult job for Julius Caesar.

What is new with Millenials is the idea that it isn’t they who have to change and adapt and get used to being managed (as well as being led) and following processes they don’t fully understand or agree with, but the manager and the company who put in those processes, usually for some very good reasons.

And the notion that because Millenials are so numerous, because employers have to hire somebody and the only option will be these Millenials, the companies are the ones who have to do the changing is sadly out of touch with reality.

Globalization of Labor in a Knowledge Economy

The most important reality is that in a knowledge economy, in the Information Age, there are really very, very few jobs that requires a company to hire someone here in the United States. And the jobs that requires physical location are normally not the kind of jobs Travis is talking about (e.g., plumbers, lawn care, babysitters, etc.).

The big news about the workplace for Millenials is that virtually every service-based industry can be outsourced. That website lists Designers, Programmers, Consultants, Admins, Writers, Marketers, and Finance. Law firms are turning more and more to outsourcing for routine work that they would have hired a young junior associate to handle at one time. Here’s an article Millenials ought to find very very applicable; the money quote:

You no longer have to imagine a company whose finance team in the United States is made up of only the controller, treasurer, and CFO, with their staff in India. This is already happening.

And guess what the young twentysomethings in India, China, Ireland and elsewhere never had? Helicopter parents, trophies for participation, a safe cocoon to shelter them from the realities of the world. They are not Millenials, these global competitors, but more like anti-Millenials: hungry, ambitious, and ruthless. They’re not whining about work-life balance, or demanding that companies change their culture so that they can feel inspired. Speak to an elite young professional from overseas, particularly someplace like China or South Korea, and you’ll quickly discover that they are full of confidence, think their American counterparts are badly spoiled children who would rather spend time dreaming about getting inspired, while they will put in extra hours, make managers happy, and advance their careers.

Here’s the thing: information and knowledge based companies can utilize outsourcing far more effectively than a manufacturing company, because their “products” and “services” can be delivered over the telephone and the Internet. There is no shipping container full of clothing from Hong Kong. So wake up, and recognize that your choices are as follows:

  1. Become a high-value Creative as quickly as possible; or
  2. Quit yer bitchin’ and get with the program; otherwise the entire department might be outsourced to Ireland

So why is it that Millenials think that companies have to cater to them, exactly, especially in a knowledge economy?

As it happens, real estate is one of the few industries where physical geographic location is important. Hard to have someone in a Mumbai call center show you a house in Texas (although, with advances in mobile video… don’t bet on it never happening). But Travis, in his RETSO speech, got it exactly wrong when he said the reason why Millenials don’t go into real estate is because they look at brokers and see a bunch of white haired no-clue folks. The reason why Millenials don’t flock to real estate is because a real estate agent doesn’t get paid. Oftentimes, in a real estate brokerage, the agent is not the employee whom the broker pays, but the customer who pays the broker.

So in that sense, Travis has a message that will resonate with real estate brokers: change your culture so that you can get more buyers of your brokerage services. That message, however, does not translate to just about any industry other than real estate brokerage.

Wrapping Up…

We can go on and on, but let me wrap up. Here’s the deal about the workplace of the 21st century, and it is something I hope the Millenials will understand sooner rather than later.

  • Companies do not hire you to improve you; it’s the other way around
  • Not all “knowledge workers” are the same
  • Good managers are also leaders, and both manage methods and procedures, often for a good reason
  • Your competition is not with other members of the Lost Generation, but with hungry, ambitious, and highly disciplined young men and women from India, China, Korea, Ireland, Poland, Argentina, etc. etc.
  • Globalization is far more effective for a knowledge-based company than for a manufacturer

My conclusion? As I’ve said in my first post, before the Millenials will change the world, the world will change Millenials.

Over to you.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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2 thoughts on “Millenials and Real Estate, Part 2: Leading vs. Managing”

  1. “the employer does not exist for your benefit. Companies do not hire you in order to train you. They do not offer you a job, pay you money, and give you benefits so that you can improve yourself”

    The best way for Millenials to learn this lesson is to just start their own company from the ground up. Only then will they understand that profitability (within the bounds of the law) is paramount and everything else like being “green” and employee happiness must serve priority #1.

    I’ve been reading the series….thanks for the great dialogue.

  2. “My conclusion? As I’ve said in my first post, before the Millenials will change the world, the world will change Millenials.”

    We all thought we were God’s gift to the world when young. Reality takes a bit longer to grab hold when they run in packs. 🙂

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