Jul. 27, 2011 - Let There Be Lions
Kim Prior created a bit of a buzz last week in the MLS world. Kim, who is the Director of MLS Market Operations at Onboard Informatics and has had a ten year career in real estate sales, posted a blog titled “MLSs Taking Control of Destiny—a Plea, an Observation, a Call to Arms.” The post was reprinted and commented on at some length: let’s examine why.
Prior’s premise is that change is happening on the outside of the MLS world much faster than it’s happening on the inside, and ‘we’ (I presume that word encompasses MLS managers, leaders, and vendors) are facing a crisis: the end is in sight.
The main reason for Prior’s statement: “We are reticent (and at times nearly obstinate) to lead survival-level change.” Ultimately, Prior says, “We avoid game-changing decisions…leaving our destiny in the hands of outsiders.”
In her mind, there are four strategies in developing a solution and regaining control of the future of the MLS: (1) regaining full control of our product (including distribution, terms, usage and price), (2) appropriate dissemination of external power and appropriate control of outside relationships, (3) eliminating the middle man from our relationships with our consumers, and (4) enabling opportunities, innovations, and job growth.
Doom is ahead if we don’t grapple with these issues, she tells us. And she ends with a call to action: “We can tip the scale of change, but the time is now.”
OK, I am curious about Prior’s post. People who have been listening to me for the last 15 years know I’ve been predicting the imminent demise of the MLS; my not-so-secret nickname is “Chicken Little.” The sky is falling:! My early whispers became shouts, and still the sky didn’t fall—the storm moved on through, and the lions were still snarling on the other side of the hill.
Well, I thought, Kim Prior must know something I don’t know. I think I’ll ask some people I really, really respect about their response to this post. What’s your reaction to Kim’s observation and call to arms? I emailed.
Marilyn Wilson posted her own call to action on the WAV Group Blog : “Enough Analysis Paralysis! Time for MLSs and Associations to make it happen!” The problem, Marilyn says, is that the real estate industry is focused on the needs of agents and not consumers. “Any company that worries more about its own margin and sales commissions more than the long term satisfaction of its customers is writing its own death sentence. “ And that attitude of protectiveness means that third party vendors offer more information to consumers than the real estate industry does. The industry hasn’t, Wilson claims, evolved property search methods in 20 years, for example.
And then she hits on MY personal hot button: “The governance structure of MLSs and Associations makes it even more difficult to get things done quickly and decisively. “ Governing boards made up of brokers and agents hunkered down in a survival mode are simply too risk-adverse to think broadly and act creatively.
I asked a prominent MLS administrator what she thought about this lack of leadership and she agreed with Marilyn. She wrote, “As a side note, I have (and still am) been on the road this week speaking to brokers about their data, about syndication, about other issues -- many are shocked, more are exactly as Kim said – reticent – not overly concerned, just hoping for that one (BIG) lead…… “ And a recently retired AE of a large Realtor and MLS operation says, “We won’t be able to deliver what the consumer wants until we transform…(ourselves)…into true, well-educated, fee-based, professional advisors. The ‘bar’ that should be above our heads is instead firmly lashed around our knees and nobody seems willing to make the first move to raise it—not the Realtors, not the big brokers, not the state licensing agencies.”
My wise friend Bob, who manages a giant-sized MLS in the Southwest, chimes in, including even more culprits in his analysis: “I don’t know of an MLS executive anywhere who is willing to put his/her job on the line defending a course of action that may be right but that will get him/her fired,” he writes. MLS executives do exactly what the title implies – they execute. “
Bob comments further on the governance issue: “(MLS Executives) executives execute on the wishes of their association owners that hopefully reflect and are based on the business interests of their broker participants. That’s the difference between a ‘corporate success’ which for a business usually is measured by return on investor’s equity and the non-profit world…. Failure in a corporate environment usually is followed by a change in management. Failure in the MLS business puts thousands of brokers and their agents out of business.”
In the end, Bob concludes, “the measure of success according to the brokers is, ‘Did it make the phone ring?’ Even if the decision of where and how to distribute listing data is a bad one, it will seldom be seen as such if the (broker’s) phone is ringing.”
When I ask one of the NAR staff to comment on Kim Prior’s article, she grumbled, “Not much substance, and (Prior) criticizes more than she advises.”Of course she does! As they say on Facebook, “it’s complicated.”
So what to do? How does the MLS sector respond to Prior’s call to action? Here are some suggestions, culled from those who responded to Kim Prior’s article:
1. Jim (a seasoned Realtor exec and consultant) says: Get over the turf wars and politics. This is a world of collaboration and listing syndication. If your MLS is unwilling to share data and support initiatives like RPR and other collaboration efforts, someone else will build a nationwide—or even global—property database. That’s what the consumer wants.
2. David, the CEO of a megaMLS, observes that Prior’s ‘call to arms’ “is about listing syndication and compliance. Kim is right. We need to understand where the content is going and make sure the recipients play by the rules….This is simply about ensuring that the brokers’ content goes where it is supposed to go. If someone profits from it, then the broker wants to know and if appropriate, be reimbursed.”
3. The retired Realtor CEO I mentioned earlier says that maybe the problem is a little more far-reaching and encourages MLSs to take leadership and decision-making to a more professional and business-like level. To me that suggests not only ‘raising the bar’ on our own members, but perhaps expanding the MLS decision-making body to include non-members who bring needed skills to the table—people who understand technology, investments, education. Develop a leadership pool of skills, not just a glorified users group.
4. This CEO also observes that “One small step the industry COULD take right now would be to wholeheartedly embrace the .mls domain idea. “At least,” he says, “That might hold the wolves at bay for a little while.”
5. Choose your business partners wisely. Bob says, Sometimes MLSs need ‘middle men’ because “Most MLSs don’t have the resources (money or staff) to determine what the consumer wants, or to deliver on that challenge effectively. All facilitators (middle men) should not be lumped into the same category and condemned because of their position or their profit motives.” But, he cautions, it’s important to carefully select your partners, because ‘a poor selection can damage your reputation for years to come.”
6. Finally, as Marilyn Wilson so eloquently writes, base your MLS organizational decisions on the demands of the people who purchase homes, not the people who sell homes. “Until we address the needs of consumers in real-time (getting over our own insecurities), the industry will continue to be dominated by outside parties who will ultimately take it over.” Marilyn reminds us that third parties already offer more in depth information to consumers than most brokers and MLSs do, and these same third parties offer consumers information about agent performance and property valuation, and they extend user-friendly and innovative property search tools. “It’s the people that give us checks for real estate who need to be at the center of every decision,” she concludes.
When I work with clients on strategic plan development, I teach them how to use a ‘strategy screen’. Not all decisions can be anticipated and incorporated in to a long-range plan, I tell them--you need a tool to use in order to evaluate your leadership actions and judge them in light of your organizational mission.
How about if our mission, as MLSs, were to give our members the tools which would enable them to best serve their customers, the consumers who pay money for real estate? If every tool we offered, every service we provided, were carefully evaluated in light of its contribution to the success of that mission of satisfying consumer needs, would MLSs increase in value and usefulness?I think so.
Wednesday, July 27, 2011
Let There Be Lions : Off Stage