As many of you know, I’ve already taken some public positions on the whole new NAR CEO thing. Even going back to 2015, I predicted that NAR would select a female CEO in 2016… not realizing that the search committee won’t even be formed until November. Oops. I also wrote about the need for something like a Rooney Rule in real estate. And my girlfriend Sunny is sort of the mastermind behind #NARGirlBoss, the inspiration for which I may have had something to do with. Or not. You’ll have to ask her.
So I’ve made multiple public statements about the new NAR CEO. But until the above document was published by Heidrick & Struggles, the headhunter retained by NAR for the CEO search, I didn’t really know what NAR and its leadership were looking for from its future CEO. Now I do. And there are some interesting takeaways from just the job description alone.
I thought I might do a think-out-loud with everyone here post about the job description and what that says about the state of the real estate industry today. Shall we dive in together?
The Schizophrenia of the Position
The most striking thing for me is the schizophrenia evident from the language used in the job description.
On the one hand, the position appears to be one of a muscular, powerful, dynamic chief executive of the most important trade organization in the country. On the other hand, there’s a lot of language that suggests that the leadership of NAR would prefer if the CEO was much less of a commander and much more of a facilitator.
Consider this one paragraph, from the “key competencies” section:
Collaboration and Decisiveness – The successful candidate will demonstrate firmness in decision making while carefully assessing the facts of a situation and weighing alternatives. She or he must be able to collaborate with the Leadership Team and the Board of Directors in prioritizing and leading strategic and operational decisions that will best achieve the goals of NAR.
On the one hand, the new CEO has to be a firm decision-maker, who is able to carefully assess a situation and think about alternative solutions. But on the other hand, she or he has to collaborate with the “Leadership Team and the Board of Directors” in “prioritizing and leading strategic and operational decisions.”
So who makes the decisions for NAR? The CEO? The Leadership Team? The Board of Directors?
Why is decisiveness important if the CEO is supposed to collaborate with the Leadership Team and the Board before making not just strategic, but operational decisions as well?
You see patterns like this throughout the document.
Strategy and Execution – The individual must possess a strong intellect and capacity for strategy and vision, and must also be highly disciplined in prioritization, execution, process management, and leadership. She or he will thrive on partnering with others to anticipate challenges and implement new ideas.
So a brilliant strategic visionary, who is also disciplined in execution and process management, who “thrives on partnering with others.” The new CEO has to be a passionate and decisive leader but curb that passion enough to build consensus with a wide variety of stakeholders while withholding the decision.
Sounds like Good to Great, No?
As I was reading the job description, I couldn’t help but think back to a classic of business literature I read a few years back: Good to Great by Jim Collins.
Collins identifies “Level 5 leadership” as one of the requirements for taking a company to greatness. Collins summarizes such a leader as one combining personal humility with intense professional will:
Level 5 leaders display a powerful mixture of personal humility and indomitable will. They’re incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its purpose, not themselves. While Level 5 leaders can come in many personality packages, they are often self-effacing, quiet, reserved, and even shy. Every good-to-great transition in our research began with a Level 5 leader who motivated the enterprise more with inspired standards than inspiring personality.
From that perspective, perhaps what NAR is looking for is that mixture of personal humility which would allow the new CEO to seek collaboration, seek input, listen and facilitate, and so on without feeling threatened in the slightest bit — but with the indomitable will for organizational success.
Those individuals exist, of course, else Collins couldn’t have written Good to Great. And such a leader of NAR would indeed go a long way towards elevating NAR from good to great.
A few further thoughts, then, on Level 5 Leadership as applied to NAR.
Humility + Will
Collins suggests that Level 5 Leaders have the following five attributes:
- They are self-confident enough to set up their successors for success.
- They are humble and modest.
- They have “unwavering resolve.”
- They display a “workmanlike diligence – more plow horse than show horse.”
- They give credit to others for their success and take full responsibility for poor results. They “attribute much of their success to ‘good luck’ rather than personal greatness.”
The self-confidence and the personal humility are easy to understand in the context of NAR. The plow horse, not a show horse concept also makes sense. And giving credit to others while taking the blame on herself or himself is just good leadership generally.
That leaves the “unwavering resolve” attribute. What does that look like in the NAR context?
This new CEO — assuming that NAR is seeking that Good to Great Level 5 Leader as its new CEO — must have no ego investment in wielding power. That’s the only way that such a brilliant strategist and effective manager can work with the often strong personalities on the Leadership Team and the Board of Directors. After all, she or he would be leading a volunteer membership organization with widely disparate interests, rather than a for-profit corporation with shareholders with a single interest: return on investment.
But to be a truly effective leader, this new CEO must also be possessed of an incredible will, this “unwavering resolve” to see NAR successful. That has to mean having her or his way even through collaboration and partnership with the volunteer leadership, including the Board. Whether s/he accomplishes this through convincing the Leadership Team, browbeating the Board, cold-blooded power plays, or horse-trading, the Level 5 Leader is willing to do whatever is necessary (short of compromising his or her core values or personal integrity) for the organization to achieve greatness.
The Key: Seats on the Bus
Readers who are familiar with Good to Great ought to know what comes next. The absolute key to seeing if the new CEO has this unwavering resolve, this will to greatness for the organization, will be to see how she or he handles issues of personnel.
Here’s Collins himself in an essay on leadership:
Life is people. What distinguishes the good leaders from the great leaders is the ability to get the right people in the right seats on the bus. If you get the right people on the bus you will get the best outcomes. When you are facing a challenge, uncertainty, or a question, change every “what” question into a “who” question. It’s not about your strategy as you climb the mountain, its who you have climbing with you. Who will get you where you need to go? There is still leadership in all of this [Emphasis added]
One of the things that is common to the world of organized real estate — whether Associations or MLS — is the relationship that builds between staff and volunteer leadership, especially as the staff gains tenure. It is not at all uncommon in the Association world to find Association Executives who have been in the position for 35 years, or mid-level managers who have been with the Association for decades.
The job description for NAR CEO says this:
Influence and Relationship Building – This individual must be a highly collegial and passionate leader with an exceptional ability to ask questions, listen, and reach consensus regarding the challenges facing NAR. This individual must also possess the human, emotional, and intellectual qualities that earn the respect of the NAR Leadership Team, Board of Directors, membership, staff, business partners, and other constituencies.
While the new CEO must be able to earn the respect of NAR staff, she or he must be willing and able to get the right people in the right “seats on the bus.” Conversely, and perhaps more importantly for someone stepping into an organization, she or he must be willing and able to remove the wrong people from the bus no matter how long their tenure with NAR and no matter how deep and wide their relationships are with the membership or with the Leadership.
That is a tall order. People who may be less familiar with how organized real estate really works will underestimate just how difficult that task of removing the wrong people actually is. Yet, without the ability and the will to get rid of the wrong people, the new NAR CEO will fail, period.
Note: in all of Collins’s examples, the “wrong people” are not bad people. They’re often wonderful people and capable executives. They’re just not the right fit for what the organization needs in that “seat on the bus” at that time. Removing them is often painful and leads to challenges in the short-term; but the Level 5 Leader cannot succeed without the right people in the right places to help her or him carry out that “unwavering resolve” for organizational greatness.
A Structural Problem
Thinking through all of the above, what occurs to me is that there is a deep structural issue with NAR governance that needs to be resolved one way or another as the new CEO steps in to her or his role.
That issue is what to do about the NAR President, and by extension the Leadership Team of elected volunteer leaders.
The schizophrenia exists because of that tension between the role of the NAR CEO and the role of the NAR President. Who sets the agenda of NAR? Who sets the strategic goals of NAR?
On the one hand, the members themselves have the right to set the agenda and strategy of their own organization. The CEO works for them, not the other way around.
On the other hand, it is clear that NAR wants a Chief EXECUTIVE Officer, not a Chief ADMINISTRATIVE Officer. It is further clear that the CEO role has a major strategic component.
So how do you reconcile this, especially in light of the fact that the NAR President serves a single one-year term, while the NAR CEO might stay in that role for years and years?
That tension is why the job description has so much on the one hand but on the other hand language in it.
Nobody at NAR has asked me for advice, and the people at Heidrick & Struggles are the best at executive recruiting and consulting so I’ll assume they’ve thought through the issue. Nonetheless, I’ll offer my two cents.
Alternative One: Make the President NAR’s Chief Executive
One simple way out of the conundrum is to make the President NAR’s Chief Executive Officer, exactly the way that our country makes the President the Chief Executive of the United States. The NAR CEO position then becomes something more like the President’s Chief of Staff, and serves at the pleasure of the President.
Vision, strategy, and key personnel become the prerogative of the President who is elected by the membership of NAR. The most key of that key personnel, of course, would be the Chief of Staff (NAR CEO) who would carry out the vision of the President who has the mandate from the membership.
I would strongly advise setting the term at longer than a single year in this scenario. If the President of the United States gets a four-year term, seems to me that the President of NAR can also get a four-year term. I understand this approach plays havoc with the current system of electing the President many years in advance, but if we’re talking about the ideal governance model, this is probably it.
Alternative Two: Replace the President with a Chairman of the Board
The other simple way out of the structural issue is to eliminate the office of the President, and replace it with something like the Chairman of the Board of Directors.
The closest analogy here is to treat the NAR CEO as something like the “mayor” while the Board serves the same function as the City Council, and the President becomes the Council Chair. So while the CEO will serve as the actual executive with wide responsibility and authority over strategy and operations, the Board and the Chair exercise legislative power (rules and regulations) and provides oversight on the CEO to ensure that she or he is doing the job properly.
Under this model, the strategy and agenda of NAR are set by the CEO who will be there year after year, not the President/Chair who rotates out each year.
NOTE: Just in case you thought I was crazy, please note that simple does not mean easy.
The Face of NAR
Before we leave off, I wanted to touch on one thing that struck me. It comes right from the first opening paragraph:
Reporting to the President and the Board of Directors, the Chief Executive Officer will serve as NAR’s lead staff member and oversee annual revenues of over $200 million. This role has significant strategic and externally focused responsibilities, including serving as a public face of the organization. [Emphasis added.]
Given all of the various roles that the CEO of an organization might be asked to occupy, the fact that the job description specifically calls out being the public face of the organization is all kinds of interesting.
After all, the current CEO, Dale Stinton, never served as the public face of NAR. The President of NAR each year served as the public face. Go do a Google search on “NAR Congressional testimony” as an example. You’ll see Chris Polychron, President in 2015, come up. You might see Charles McMillan, President in 2009, come up. You’ll see various NAR elected leaders come up — most powerfully for me in the 2006 Congressional hearings when President Patricia Vredevoogd-Combs pushed back against making the MLS a public utility — but you’ll be hard-pressed to find the CEO testifying before Congress.
Similarly, take a look at the National Association of REALTORS YouTube channel. Out of the 1000+ videos in the channel, it’ll be a challenge to find the CEO speaking as the face of NAR. Instead, you have the elected leadership speaking for NAR, as Bill Brown, 2017 President, does here:
I don’t know if the past job descriptions for NAR CEO contained the same “public face of the organization” language. Is this new? Is this some kind of a hint as to what NAR leadership believes the CEO position requires going forward?
This “public face of NAR” thing is even more interesting in the Good to Great Level 5 Leader analysis. Because Collins makes clear that the most effective CEOs are not charismatic stars. In his language, they are plow horses, not show horses. He specifically rejects public adulation and dynamic personality, saying that the best leaders are quiet, shy, humble and shun the spotlight.
So, are you sure that you want the new CEO to be the public face of NAR? In light of the above, why?
Final Thoughts: Outsiders Will Find It Tough Sledding….
My final thought is that given what the job description details, I think it will be very, very difficult for a true outsider to be successful in the role of NAR CEO.
I know I personally have thrown out names of potential outsider candidates, like Carly Fiorina. But that was before I read the job description. Afterwards, I don’t think a true outsider can really be successful in the role.
There’s simply too much that is unique to how organized real estate works that the new CEO must know on Day One for a real outsider to be successful. For example, the document states as one of the “specific responsibilities” of the position is:
Seek to understand the priorities of NAR local associations/boards and state/territory associations of REALTORS®, while moving toward a stronger more vibrant professional community structure at NAR.
Well, the three-way agreement that binds the local, state, and NAR together is under all kinds of interesting stresses right now. And the priorities of the various levels and various segments of organized real estate are in full flux because of technology and changing consumer expectations, not to mention the uncertainties of the political environment.
Combine that with the whole schizophrenia of the position as written today and it isn’t clear to me that someone coming from the for-profit corporate world could negotiate being CEO of a membership trade organization with extremely powerful personalities on the Leadership Team. Even someone from a nonprofit association background might find the unique issues confronting real estate in the 21st century to be overwhelming, especially as things change rapidly and unpredictably.
I think the right candidate will come from within NAR itself or from a large local Association or a state Association. A brokerage leader, especially at the franchise level where the CEO must often balance her or his own vision and strategy with the needs and wants of a group of brokers with very strong views and personalities, could work out as well.
But right now, after having read the full job description, I don’t see someone coming in from the outside without major stumbles and major learning curves, both of which would limit her or his effectiveness at a critical juncture in organized real estate when we all need the new NAR CEO to be the most effective Level 5 Leader we have ever seen.
YMMV. I’d love to know your thoughts, of course.
Well, this got long. Hope it was as entertaining and enlightening for you to read as it was for me to write. All thoughts and comments are, as always, welcome.
I’ll say this: I don’t envy the job of the selection committee. They have a critical task ahead of them, and I suspect it will not be easy. Yet, their decision will reverberate throughout real estate for years and years to come. I pray for guidance for them.