I think most people who know me realize I’m a firearms enthusiast. Or, as might be said in some parts of the country, with the appropriate sneer, a gun nut. But I’m also a business strategist. So when Forbes runs a story like this one about Sturm Ruger & Co., I went thither as a hummingbird to an orchid:
And then I distilled a nugget of wisdom that might be helpful to my friends and colleagues in the real estate business, who are trying to figure out how the hell to improve business that’s stagnant at best and headed to the cliff at worst.
The Tragedy of Genius
Ruger comes in as the #4 Best Small Company in America. But its origins lay in the vision of one man: Bill Ruger, Sr. From the article:
Founded in 1949 by Alexander McCormick Sturm and William B. Ruger, the eponymous gunmaker caught fire with its first product, a .22-caliber target pistol. Sturm died in 1951. Bill Ruger was something of a corporate Caesar, who beat well-entrenched competitors and famously swore off market research. He made guns he wanted to shoot, overseeing every design detail. “If I really personally like it,” he said in 1981, “then I can be fairly sure and positive that there will be a lot of other people who feel the same way.” (Emphasis mine)
That attitude reminded me of another genius of American business: Steve Jobs. He also made stuff he wanted to use, and his imperial manners and attention to detail are both famous. Even to this day, Apple products frustrate even as they delight, because they don’t have features that Jobs himself didn’t think were important. But the important point is that they delight because they do have the features that Jobs wanted.
Both men were geniuses. I don’t believe that they could ever articulate what about a particular product or a particular design feature clicked and did not click. Innately understanding what was going to be popular and what was not was part of their genius. And there are numerous examples of such individuals throughout history.
But the tragedy of genius is what happens when the genius has moved on, whether through death like Ruger and Jobs, or retirement, or life changes. When you’re the next guy up, and you lack whatever that innate genius of a Bill Ruger or a Steve Jobs was, you could be smart, hardworking, conscientious, and deeply caring and still be screwed. Because you’re not a genius.
What do you do then?
Mike Fifer Solution: Ask Everybody
That’s the challenge that the current President & CEO, Mike Fifer, faced. He came into a terrible situation, with the company struggling badly, its financial results poor, and its products uncompetitive in the market. What’s more, Bill Ruger had passed away.
As soon as he set foot in the Newport, N.H. plant, Fifer knew Ruger badly needed to retool and make new products. That was something of a challenge for a plumber whose business hasn’t changed fundamentally since ancient Rome. Fifer couldn’t intuit what the market wanted. “We didn’t have Bill Ruger Sr. anymore–that genius in-house,” he says. “So, I just did the next simplest thing: I went out and asked everybody.” (Emphasis mine)
Fifer spent 38 weekends in his first year actually working behind the counter at gun stores, asking the buyers questions. He conducted surveys of distributors, customers, and potential customers. At the 3:30 mark of the video above, Fifer says that Ruger sent a lot of their staff — including senior staff — to gun shows, gun stores, etc. to get exposure to consumers. He didn’t just send his field marketing team or his sales team to get feedback and bring it back to corporate; he sent the SVP of Manufacturing out personally to talk to gun buyers.
The result is a series of new product introductions that have turned the company around:
Customers have responded well to Ruger’s recent efforts: New models accounted for 38% of sales through June 30. They’ve also become the fundamental driver behind Ruger’s increased profits. Thanks, in part, to LCRs, operating margins last year were 22.6%, compared with 2.4% when Fifer took over, according to Value Line. The company has pushed out eight new models in the last 12 months.
Think about that: operating margins went from 2.4% to 22.6%. Knowing what I know about brokerage margins, wouldn’t they love to find out how to get their margins to 22.6%?
A Lesson for Real Estate
The takeaway is a simple one. If you are a broker, the CEO of a large company, the manager of a significant office… when was the last time you really spoke with a consumer?
If you are a genius — and I believe that real estate has a few of these geniuses who intuitively understood what the market wanted — then you don’t need to. I suspect that people like Colbert Coldwell and Benjamin Banker may be one of these geniuses. Maybe they didn’t need to conduct market research and go talk to every day consumers because they just got it. Offer the kind of service they themselves would have wanted, and the market would respond.
But if you’re not a genius, then you can do what Mike Fifer did: ask everybody.
If Mike Fifer can spend 38 weekends as the President & CEO of a public company working behind the gun counter, why couldn’t you spend a few hours working in the e-leads team or answering phone calls? Why couldn’t you tag along with one of your listing agents and visit a potential seller’s house and listen to their concerns and objections?
And the important clarification is this: Fifer didn’t talk to only Ruger owners. He made sure to talk to people who were buying different brands, asking them, “Why that one?” What he wanted to know was why people didn’t want his products, not why his customers did want it.
Every single senior manager in a real estate company is busy as hell. I know this. It’s tough to find time in the calendar between important meetings. But I have to ask seriously… is there something more important for a company leader to do than to “intuit what the market wants”?
Action Item
So… I’ve now said this in a couple of presentations, but I’ll share it with all my readers who give a damn. It’s a concrete action item you can implement right away in your business.
If you have a senior leadership position in a real estate company, have your assistant setup four phone calls every morning: two with buyers or sellers who recently did a transaction with your company, and two with those who chose not to. And talk to them. And listen. Really listen. Even if each call takes 15 minutes, that’s only an hour out of your day.
I can’t imagine a better use of an hour of your day, I really can’t. I suspect you’ll find ways to improve your service offerings, and fairly dramatically in some cases.
This has been a free consultation. Probably worth what you paid for it. But hey, if you want to throw money my way, I may not refuse. 🙂
-rsh
