Human Capital presents…

Who is going to take the reins when you go?

“A leader’s lasting value is measured by succession.” – John C. Maxwell

 Do you have a succession plan? If not, why not?

When faced with the day-to-day challenges of running a real estate brokerage, it’s easy to forget about this essential element of the business. It can take decades to build up your brand recognition with a strong bench of agents, offering competitive compensation plans, and cultivating a name for yourself in your particular market.

What will happen to your company once you decide to retire?

When I have discussed succession planning with my clients, I choose to refer to it as a succession strategy. This is not just merely semantics. A plan is reasonable, necessary, and defined as a 'detailed proposal for doing or achieving something.' Whereas a strategy is actionable and to be thought of as a 'plan of action or policy designed to achieve a major or overall aim.'

 In other words, it's not enough to have a plan in place; there need to be actions behind it. A succession plan is not something to be kept in a box to be broken open in case of emergency. Some steps need to be taken for any transition to be as seamless as possible.

In her book, Why Leaders Fail, Doctor Mary C. Kelly asks the question, “Are we grooming the people within our organization to take over after we’ve moved on?” She goes on to further say, “Many people don't want to think about training their replacement because they think they are invaluable, and you are. However, at some point, somebody else is going to take over, someone else will step into your shoes, and you have to make sure you have prepared that person for wonderful, amazing success. Because you care about your organization and the people you serve.”

Further on in her book, she talks about how most leaders in both small family-owned and even large organizations plan to work until the age of sixty-seven. However, in actuality, national statistics show that leaders end up only working until sixty-two. They end up having to retire early due to their health or health of a spouse or loved one. It’s never too late or too early to work on a succession strategy.

Your successor can be more than one person. It may be worth exploring a team to cover the work you have done to as a leader. It's essential to keep an open mind around the individual or group of people that will take over when you leave. It is simplest to look within your organization to find this person to take the reins from you.

However, it's essential to sufficiently scrutinize any internal candidate by comparing them with available candidates outside of your company. I cannot stress enough that if there isn't an easily identifiable person within your company to set up as your successor, it's best to start looking outside your company at those outside the organization, but within the industry. For this purpose, it's best to tap into an Executive Recruiter that has a strong working knowledge of persons within the industry that match the criteria of what you seek in a successor. Of course, this may sound self-serving, but that doesn't make it any less accurate. You do not want to limit the scope of your search to those only within your sphere of influence.

As a method of evaluating a candidate, gather a list of values and beliefs that you want to see within that person. As the leader or founder in your company, you have a value system and a passion that has translated to your success, it can be tough to find that level of conviction in your replacement, so while less tangible it's still essential to make this part of your assessment. 

Regardless, there are a few key things to make sure your successor is aware of logistically about your company once you bring them on board.

Here are my seven suggestions for real estate brokerage succession planning:

1. Once you’ve named your successor, introduce them to any directors or critical business partners.

2. Also, introduce them to the hierarchy of administrative individuals within your company that has been instrumental to your success. If this can be done in a social setting (i.e., lunch or happy hour), it will prove fruitful.

3. Train candidates on all aspects of the brokerage's operations, so they have a good understanding of the firm's business.

 4. Provide your successor with detailed instructions about the location of client files, escrow accounts, and information about the brokerage's licensees.

 5. Equip them with access to information about former client files, bank account, contracts, insurance policies, and association/MLS membership information.

6. Have them trained or at the very least familiar with the systems, processes, and software programs that are used to power your organization. This should include setting them up with access to computer accounts, voicemail, and critical passwords.

7. Please make sure they are aware of the company's current liabilities and any other risks or legal issues, either past or current.

Succession planning is an essential issue for all real estate brokerage firms to consider. Having a proper strategy in place can never occur too early. The point the more time this individual or individual(s) have to spend with you only further allows them to get a sense of your culture, leadership style, and vision for your brokerage. Having a successor around with you for several years before you retire is a good thing and will assure the success of your brand, employees, and business for years to come.

About Stephen Kowalchuk:

As Managing Director and Partner of CMA – Corporate Management Advisors Stephen has been an instrumental moving force behind staffing, many of the top industry-leading companies in Real Estate. With over 20 years of experience, he has worked alongside executives In the areas of Residential Brokerage, Finance, Technology and Vendor Services to the Real Estate industry. His passion for matching up against top candidates with established and aspiring businesses is unparalleled in the industry. In his spare time, Stephen is a devoted family man who enjoys travel and has an intense zeal for music and art. https://stephenk.works/ and LINKEDIN. 

About the Author -Jonathan Peterson:

?Jonathan has been in the Real Estate Industry for nearly 20 years. Over his time, he has helped Brokers, Managers, and Owners improve and strengthen their business thru technology tools. For almost 14 years he was a Vice President at Lone Wolf Real Estate Technologies. He worked as an Enterprise Account Executive with DocuSign and has consulted with numerous tech companies in the past several years. LINKEDIN.