SUCCESSION PLANNING AS A BUSINESS TOOL

What’s next for older agents?

By Steve Murray, Publisher

There are a great many people who comment that the difference in the ages of real estate agents and the average age of buyers is vast, and likely causing problems, or perhaps will cause problems. While we don’t subscribe to that theory (the age difference 30 years ago was likely the same), we do know that there is an entire generation of both agents and brokers who are thinking about “What’s next”? They are north of 55 years old, have accumulated some net worth, and they are trying to figure out what is next with their careers, businesses, and lives.

COUNSELING AGENTS AND TEAMS

While most of our work had been with broker-owners for the last 29 years, we are increasingly counseling agents and teams about the same topic. How does an owner of a realty business establish a plan, other than a sale, for his or her business? What are the keys to successfully establishing a succession plan?

We would offer this. First, don’t try and replace yourself with yourself. In all likelihood, you have grown your business with your skills, background, relationships and view of the world. As we have previously said, it is difficult to replace an iconic founder with someone just like him. So, don’t go down that path.

SELECTING SEVERAL PEOPLE in your organization who might have the skills to lead your business is also key. It may take more than one person to fill the roles the founder has provided.

CONSIDER FUTURE SKILLS

Instead, consider what skills are needed to continue to drive your organization forward. Can that be found in one person or a team? Some firms have been successful using personality assessment tests to line up the people skills of potential successors as a starting point.

Selecting several people in your organization who might have the skills to lead your business is also key. It may take more than one person to fill the roles the founder has provided. The next steps are investing your time in educating this team about the business and the environment, testing their ability to make decisions and be responsible and, most importantly, testing their ability to work as part of a team to achieve mutual goals.

MEASURE RESULTS

Lastly, whether you are building a team as part of a succession plan or to strengthen your company, measure results rigorously. We’ve found that it doesn’t mean only measuring financial or operating results, but also measuring how well these potential future leaders work together and support each other. As Patrick Lencioni said in his book, “The Five Dysfunctions of a Team,” it is the attention to results and not egos and status that marks a truly effective team.

Thinking about how you would build a future team should be the goal of a business owner whether he intends to sell or not. One of the biggest weaknesses in residential brokerage is the lack of investment in the leadership and business skills of the management teams of brokerage firms. The important thing is to invest your personal time in doing so. ^

This article originally appeared in the March 2016 issue of the REAL Trends Newsletter and is reprinted with permission of REAL Trends Inc. Copyright 2016.

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s