A Response to Bill Brown, 2017 NAR President

Usually, Notorious is what you might call an underground-yet-not-really phenomenon. That is, I know that almost all of the leaders of the industry read it, and I get emails, messages, and phone calls from them from time to time responding to one post or another. Very, very rarely do I get a public response from someone in a position of authority.

Well, in a refreshing change from the atmosphere of omerta that seems to surround organized real estate, 2017 NAR President Bill Brown posted a lengthy comment on my post about Bob Goldberg’s elevation to CEO. He corrects the record, and takes me to task on a couple of items. I thought it worth responding to him here, in a separate post, rather than in the comments section.

Seems to me that this is a rare opportunity for public discourse about an important decision that the organization has taken. I think it’s healthy for people who have the same ultimate goal — to save the Realtor Movement — to discuss things openly.

I’m going to quote parts of Bill’s comments, but I encourage you to read the whole thing. It provides real insight into the thinking of the NAR Leadership of today. This will be written as an open letter to Bill.

Dear President Brown,

First of all, thank you so very much for your comment. It isn’t often that a leader of any association, never mind the National Association of REALTORS, offers public comment and criticism. I appreciate it, as it affords an opportunity for dialogue. And normally, not being a man who stands much on ceremony, I would call you Bill, and be far less formal in a response blog, but you used your official email address (NARPresident@realtors.org), so I must treat this as an official communique from the Office of the President. Accordingly, President Brown, let me reiterate how grateful I am that you are willing to have this conversation in public.

Let me also say that I have the utmost respect for anyone who volunteers so much of their time as to rise in leadership at NAR. I know the work and dedication it takes for someone to become NAR President, and so I’d like to make clear that whatever our disagreements, I have nothing but the highest respect for you personally and for the office you hold.

That said, there are some substantive areas where you and I don’t see eye to eye. That’s obvious. Let me start with the most important.

NAR Needs Saving

Your very first paragraph to me was this:

First, you mention NAR “needs fixing.” In a large organization like ours, there will always be strengths and weaknesses. I submit we have many more of the former. NAR is a member-driven organization. It is not staff-driven. This model allows NAR to tap the minds of practicing Realtors® to create a productive environment for our 1.2 million members.

We differ here on just about every point, President Brown.

You think NAR has 1.2 million members; I do not. I think NAR has 180,000 members based on the national average response rate of 15% to Calls For Action.

Perhaps the difference is that you consider everyone who has paid her dues to be a member, a Realtor in good standing. I do not. I believe that in reality, the vast majority of your so-called members are nothing more than MLS subscribers who are forced to purchase NAR membership in order to get what they really want and need. You don’t have to take my word for it — call and ask any local association CEO, any MLS CEO, any state association CEO. They’ll all tell you the same thing.

The recent Inman Report on the Association concluded that 70% of the respondents joined the REALTOR Association because they felt they had no choice. Those are not members; they’re hostages.

You see, to me, the difference between a member and a customer is that the former actually believes in the ideals, goals, and mission of the organization to which she belongs.

The ideals of NAR are contained in your founding document, the Code of Ethics, which calls upon Realtors to take on “obligations beyond ordinary commerce” and to accept “grave social responsibility and patriotic duty.” Those ideals have not changed over NAR’s hundred-plus years of history and generations of men and women have accepted those responsibilities. Today? A few still do; many don’t even know that the ideals exist.

The Code of Ethics further proclaims:

The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.

It is probably not news to you, President Brown, that the term REALTOR connoted those things once, but today, it has come to connote nothing of the sort. It is likely not news to you that the majority of your 1.2 million REALTOR members depart daily from ideals of competency, fairness and high integrity — sometimes without even the inducement of profit. Sometimes they depart from those ideals simply because they don’t know any better.

How then are people who do not believe in your ideals, who do not respond to Calls for Action, who do not get involved, who routinely behave incompetently, unfairly, and with no integrity be called a member of an organization founded on public service, political involvement, and highest ideals of professionalism?

You say NAR has many more strengths than weaknesses. What are these strengths? It isn’t the REALTOR brand. It isn’t your advanced technology, because let’s face it, NAR is not now, has never been, and never will be a technology company. It’s not even the 1.2 million member count, since most of them are but MINOS: Members-In-Name-Only.

The only real strength I can honestly list is that NAR remains a major political player in Washington DC as one of the real heavy hitters in lobbying and campaign contributions. That is not a small strength, but what else have you got?

On the other hand, NAR’s weaknesses are numerous and plain to see. Shall I list them for you? Here we go:

• Poor governance: US Congress is smaller than NAR’s Board of Directors, and the President serves a four year term as the Chief Executive
• Slow, slooow, slooooooow
• Involved in too many ancillary businesses (Credit Union? REALTOR University? Lockboxes? Forms? Venture Capital?)
• Far too reliant on the MLS
• Far too reliant on brokers mandating REALTOR membership to their agents
• Poor enforcement of the Code of Ethics
• Diluted and meaningless REALTOR brand, primarily because everybody has it

I further disagree that NAR is a member-driven organization. It is one only in principle, rather than in reality.

I say this because in my travels, in my work, I have spoken to thousands of REALTOR members — many of them in local, state and national leadership positions — who say things like, “We’d love to do XYZ, but NAR won’t allow it.” I ask them, “What do you mean NAR won’t allow it? Aren’t you NAR?” They all laugh ruefully and shake their heads.

I say this because if NAR truly were member-driven, you would not have authorized $20 million in annual funding for a software program no member has asked for, while Commitment to Excellence goes unfunded. That can’t happen in a member-driven organization whose members have been crying out for years now for something to be done about incompetence and lack of ethics in the REALTOR ranks.

By the way, the incompetence and lack of ethics in the REALTOR ranks? That isn’t my incendiary and uninformed opinion, sir, but the findings of your own DANGER Report.

The Process of Selecting Bob Goldberg

You further take me to task for giving voice to the doubts and questions of many thousands of people outside of your closed boardroom doors about the process through which Bob was chosen as CEO. You write:

Being one of the seven Leadership Team members in the room who heard and reviewed the final CEO applicants, I can assure you that the process was not predetermined. The search was extensive, thorough, and its integrity was protected and managed by one of the leading search firms in the world, Heidrick & Struggles. I can confirm the selection of Bob Goldberg was not preordained.

His 22-year tenure at NAR put him in the best position to help deliver the change that NAR needs to help move us forward as an organization and help move us forward as an industry. Personally, I was blown away at some of the suggestions Bob made during his final presentation. You will be hearing more about his ideas once he becomes CEO.

Thank you for the confirmation. I’ll take your word for it, trusting in you as an honorable man, Mr. President.

But I have a few questions. Now that the process is over, the decision is made, and everyone of good intent is lining up behind the new CEO to support him, I see no reason for deep secrecy.

1. Since Heidrick & Struggles managed the search, can you confirm that Bob Goldberg was their top recommendation? I can’t imagine that a search firm of their expertise and experience would not offer their opinion on who they thought would be the best CEO.
2. Same question, but with regards to the Search Committee. Can you confirm that Bob was their top recommendation? In all cases, we assume that Bob was one of the recommended, but was he the top recommendation?
3. If Bob was not the top recommendation from either Heidrick & Struggles or the Search Committee, but the Leadership chose him over the top recommendation, could you explain why you did so?
4. It seems that Bob’s 22-year tenure was a dispositive factor in choosing him over other candidates, even one as impressive as Alex Perriello. Given that he was the only possible candidate with that kind of tenure, why did you bother with a search in the first place? Why didn’t you simply name him as Dale’s successor in December of last year, or earlier when you knew Dale would retire? What was the point of the entire search process if tenure at NAR was the dispositive factor in choosing the next CEO?
5. You say you were blown away by Bob’s ideas and suggestions during his final presentation. Was this the first time you heard these ideas and suggestions from Bob? After all, you must have worked closely with him over the years as you ascended the leadership ranks to President; did none of these ideas get floated over the years?
   • If he did float those ideas over the years, what happened to them? Did Dale quash them? Did you or previous elected Leadership quash them?
   • If Bob did not float those ideas over the years, did you ask him why he didn’t?
6. Finally, why would it matter in the least bit whether Bob has great ideas or terrible ones if NAR is — as you say — a member-driven organization, rather than a staff-driven organization? His ideas aren’t the ones that matter; the members’ and leaders’ ideas are the ones that matter.

One of the reasons why so many of your members are disaffected is a widespread sentiment that NAR operates without transparency. Decisions get made without explanation by elected leaders or by staff behind closed doors and anyone who asks too many questions gets punished. For example, he might lose Committee assignments, or be blacklisted in other ways, or maybe, he might get called uninformed and told to get his facts straight.

Well, it’s hard to be informed when information is so rarely forthcoming. It’s difficult to get one’s facts straight when facts are hoarded like state secrets.

I assume this state of affairs is unintentional and as distressing to you as it is to your membership. I know you welcome the opportunity to explain your decision-making process to your membership in a more transparent manner.

Well, here is that opportunity, Mr. President.

Change vs. Status Quo

You go on to say:

Second, in terms of my comments in the video when I say Bob “has the ability” to have the vision to innovate. I am distinguishing between Bob and someone else who would support and retain the status quo.

With respect, Mr. President, who is this “someone else” you are referring to?

How, in your opinion, would Alex Perriello have supported and retained the status quo? Did you really feel that Alex lacked the ability to have the vision to innovate?

How would Sherry Chris have supported and retained the status quo? Pam O’Connor?

How would any of the names I have heard widely mentioned have supported and retained the status quo?

In the last 48 hours, I have heard from a number of people both publicly and privately. They have convinced me that Bob Goldberg is a man of character, ability, creativity, intelligence, and integrity. I look forward to getting to know him better, assuming he doesn’t completely blacklist me. But if he is the man they all say he is, he wouldn’t be that petty. So I look forward to assisting him if that is what he wants, criticizing him (out of love) if that’s what he deserves, and praising him when he succeeds.

Yet, until your statement, not one person has suggested that the other candidates were lacking the ability to innovate, lacking vision, lacking the capacity to drive change. I’d appreciate an explanation.

The Track Record

That Bob Goldberg has brought in $225 million in non-dues revenues to NAR is impressive. And I have said as much. That he has been successful in the tasks he was given is not in dispute; I have said as much.

I have already corrected my original post on the “Great Time to Buy or Sell” campaign. Bob had nothing to do with that. He was still a senior executive at NAR when that went down, and one assumes he had some influence, but he wasn’t responsible for that debacle.

I continue to criticize the ads because they are such amazing examples of how badly NAR handled the situation. If NAR is member-driven, then every single person on the Leadership Teams from those years needs to stand up and take responsibility. I have yet to hear a single person admit error and apologize to NAR and its Realtor members for the worst branding campaign in history. If NAR is staff-driven, then every single executive involved with that campaign needs to be held accountable, including Dale Stinton. As yet, I have not heard of anybody being held accountable.

In your response, President Brown, you appear to be defending the ad campaigns of 2006 and 2007. Your argument appears to be that NAR was telling consumers to buy at the top of the Bubble because homes are a long-term asset that would ultimately appreciate and pay off in 30-40 years.

Sir, all I can say is, any consumer who bought a home in 2007 on the recommendation of a Realtor lived through years of financial hell. Many of them went through foreclosure and lost their homes. A few chose to walk away from a totally upside-down mortgage. Far too many of them still haven’t fully recovered from their ordeal. If you believe that campaign strengthened the REALTOR brand in the eyes of the American consumer, because when the few who held on to their houses through the Collapse sell them in 2037, those houses will pay off… well, you and I can agree to disagree.

As for RIN… you write:

Third, regarding Bob’s involvement at Realtors® Information Network, I sense an overlapping theme occurring in your thinking: you do not either know the facts or refuse to acknowledge the reality. At RIN as the CEO, Bob did not unilaterally make policy. He could suggest it, but ultimately a Board of Directors, who are all members, determined the decision-making process.

I probably do not know all the facts, but I always acknowledge the reality, President Brown. What I asked has not yet been answered, but you are in a position to know and to answer. Once I understand the reality, I’d be more than happy to acknowledge it. So here they are, again:

• Did Bob push to free Realtor.com from its artificial constraints in the years 2008-2010? Did he see in 2008 that without changes to the Operating Agreement, Realtor.com would be a distant third within a few years, and did he express that concern to the RIN Board of Directors and to NAR leadership?
• If Bob as RIN CEO pushed hard to free Realtor.com, but failed to convince the member-driven RIN Board of Directors… what does that bode for his ability as NAR CEO to convince the member-driven NAR Board of Directors to do the right thing for the future of the organization?
• Finally, if Bob pushed hard to free Realtor.com, but was overruled by the Board of Directors, who are all members, would you agree that is Exhibit No. 1 in the case against NAR being a member-driven organization?

Please give me the facts, and I’d be happy to acknowledge the reality that those facts reveal.

Personnel Is Policy

I feel that this may be the recommendation that upset you the most, Mr. President. And I believe you misunderstood my point — as have many others, to be fair, as is evident in the comments. So allow me to clarify.

The people you mentioned, like Jerry Giovaniello and Katie Johnson, are extraordinary individuals. Others neither of us mentioned throughout the organization are top notch professionals. I completely agree with you, sir, that the staff at NAR are capable, smart, and dedicated. Many of them are my friends and I have the utmost respect for them as people and as professionals.

But when a new administration comes in, whether in government or in private sector, there is always a turnover of senior staff. This is no reflection on the previous administration’s staff. In fact, those individuals go on to extremely senior and often more lucrative positions elsewhere. Everyone recognizes that those capable people were not fired; they simply rotated out with the old regime. There is no negative connotation to being replaced by a new leader at the start of a new administration. The new CEO might keep some individuals from the previous regime, but more often than not, he brings in his own people.

That is especially true when the mandate for the new CEO is change.

My suggestion is in the context of Leadership’s repeated assertion that Bob Goldberg was chosen because he is truly a change agent with vision and innovative ideas. Well, no executive can drive change throughout an organization without bringing in new people with fresh perspectives. No executive can implement new policy ideas without new personnel, especially if those new policy ideas are ones that the old personnel find unsettling or uncomfortable. That is why people say that personnel is policy.

Your selection of Bob, with his 22 years of tenure at NAR, suggests that you wanted continuity rather than change.

If that isn’t the case, then Bob can prove it by cleaning house and bringing in new people of his own. That isn’t a reflection on the current staff, most of whom will get snapped up the minute they hit the street because they are, as we agree, competent and dedicated.

But if he brings in new people, that will tell us all quite a bit about his intentions as CEO: continuity, or change? And who he brings in will tell us a great deal about him as the CEO and what his priorities are and what his plans for NAR are.

I consider that suggestion for change to be neither uninformed nor incendiary. In fact, it is one of the most standard of corporate strategy suggestions to a new CEO being brought in to drive change and shake things up. I’m sorry you read it as you did.

Concluding: It’s Not About Bob; It’s About You

You close with a powerful call for unity, Mr. President:

Finally, let me emphatically point out that I am concerned about helping are our 1.2 million members who look to NAR for a range of services from advocacy to education. I understand that there will always be those who sit on the sidelines and opine about what should be done. My job as NAR president is to look out for those who are willing to get into the arena and get dirty doing the hard work of making a difference for NAR’s members. Bob Goldberg is in the arena fighting every day.

I can assure you Bob Goldberg will be a change agent once he takes the CEO mantle. What I ask for in return is that you and our members give Bob the same opportunity that the Leadership Team gave him. If you give him a fair shake, I firmly believe you will be as impressed with him as we are.

Apart from the disagreement on 1.2 million members, which I have already detailed above, I agree with you 100 percent.

You do not need to assure me or anybody else that Bob Goldberg will be a change agent. He will prove it one way or the other with his actions, with his policies, with his leadership. If he’s a change agent, he will change things. If he is not, then he won’t. And no amount of words, yours and mine, will make a whit of difference either way.

You do not need to ask me or your Realtor members to give Bob a fair shake. I have already done just that in my original post. I’m not going to pretend, as some are doing, that Bob Goldberg was my first and only choice. He wasn’t. But he is the new CEO. He has my full support because his success is NAR’s success, and I want to see NAR fixed, saved, and set on the right path. The Realtor Movement must be preserved; it is our patriotic duty to do so. I and everyone else of good intentions will give Bob Goldberg his fair shake, and we will root for him to be what he promises to be.

But my post was never about Bob; it was about you, Mr. President, and your fellow leaders on the Leadership Team. Here’s what I wrote:

We can say that the Leadership Team at NAR has some explaining to do about this choice. Not because of Bob, but because what the choice says about their vision of NAR, their perspective on what is going on and what is coming down the road. President Bill Brown needs to do more than just a short video announcing the decision. He and Elizabeth Mendenhall, the 2018 President, and John Smaby, the 2019 President, as well as everybody involved in NAR in a leadership position now need to tell us a lot more about how they view the future of NAR.

Your comment is a fantastic start, Mr. President. But in your castigation of my “uninformed and incendiary comments,” you neglected to tell us what your vision of NAR is. You failed to illuminate your perspective on what is going on and what is coming down the road. The next set of leaders coming up — Elizabeth Mendenhall, John Smaby, and Vince Malta — all need to tell us what their vision is, and what their perspectives are.

This is even more imperative given your words about NAR being a member-driven organization, and given Bob Goldberg’s own words: Fearless leaders embrace fearless ideas. Even if Bob is a fearless leader, if the elected leadership is not equally fearless, I fear nothing much will change. Even if Bob is a visionary, if the elected leadership is not, I envision that nothing much will change.

I happen to believe for a variety of reasons that the next generation of leaders are fearless, are visionary, and are willing to confront reality head-on. But they need to tell us more. You need to tell us more.

You all owe some answers to your 180,000 members, to the 1.02 million MINOs, to the 10 million consumer households who risk their financial future every year, to the American public whom you serve as part of the REALTOR Movement, and perhaps most of all, to Bob Goldberg, whom you have just chosen as the CEO to lead this member-driven organization into a tumultuous and uncertain future.

We want answers.

We can handle the truth.

And we’re waiting.

Thank you for your time, your attention, and your service, President Brown.

-rsh