The wrong diagnosis of your business can cost you the life of your business...

I think we'd all agree that the wrong diagnosis or a misdiagnosis could be fatal in our personal lives. A little bit extreme, but stay with me on this and. Or you get the misdiagnosis. Well, anytime there's a diagnosis, there is a prescription. And actually if you've got a misdiagnosis or the wrong one, hey, you're fine and someone's not fine. Nothing's done. This is wrong and that's not what's wrong. But you're prescribed what to do for that thing. That's not the thing. There's a problem. Well, let me take you into your business. It's John Chepbak on a Sunday morning at looking around here, 6:33am Pacific Standard Time, just getting ready my driver to get here about 7am and fly back to Louisiana. And I want to help with team leaders, broker owner managers constantly in supporting you. And really, quite frankly, this message is for anyone in business and in life. But let's just talk about business. There are a few conversations that I've had recently and I have them a lot. And this thought comes to my mind is that, you know, we've got to diagnose, prescribe. It's really if you take a look at the coaching, business people have different scenarios or different perspectives on it. I don't know. I think coaching is not all about cheerleading and motivation, holding someone accountable. I think true coaching, maybe it's consulting in the context of how I look at it, is having that competency and capability to take a look at something and ask questions and find out what the true issue is. And then when you get the answers, go a little bit deeper. When you thought you had the real answer but you didn't and you got it underneath it so that you can identify what the prescription is going to be. Here's a scenario. Having a conversation with a chief operating officer, a large organization, I think humbly all know that my average client does at least 500 million plus a year, probably a higher average, but irrelevant. I just want to make a point of the level of businesses that I'm talking about here. And the conversation is talking about where production that versus where they want it to be, where expenses are at versus where they want to be, some choices they need to make with staff, unfortunately, and maybe even looking at training because ultimately the production profitability is not on the path that the organization wants it to be. So I'm listening. Great. Now here's the key two parts for any of you that are working with a coach and I say this respectfully. Anyone that is a coach, you know, hey, there's all kinds of coaches out there in the world that are better than me. And there's probably some coaches that can hear this that hopefully I can lend this to as some value. There are many that went before me that helped me out. The critical piece is, as a coach is not trying to validate yourself and validate the investment that someone has made in you by giving them an answer. No, I think that your greatest skill set and greatest counsel can be in the questions and the depth of the questions so you can actually get to the truth. The path is the relentless pursuit of the truth. Too many business owners, too many team leaders, too many broker owner managers. What's happening is as I jump in and I'll see the challenges or frustrations they have, I can go backwards and I can find where there was a misdiagnosis like the wrong diagnosis. Hence when you get a misdiagnosis, you're gonna get the wrong prescription, wrong action steps, and we get to fix that. I wanna take you back to this scenario. So production's not where we want it to be and maybe we need to look at training, maybe standards need to be raised up, maybe the people need to do more and gosh, we've gotta cut staff and, and cut expenses. Okay, cool. So what is your per person productivity typically been 12, 13, 14ish. Oh, really, really good. Great. So I stopped right there and here's what I said and listen, you know, if your desire by the way, is, well, that's what I am and that's what I want to be and I don't care what the average is, hey, good for you. But you better make sure that the activities that support your capability to hold a number like that of per person productivity is congruent with what the market requires today. See, that's the difference maker. We're different. Great. If you're going to be different, then there's some other pieces I'm going to touch on in a moment that you better be doing. Okay, because here's the point that I made. So wait a minute, wait a minute. Production's not where we want it to be and you know, revenues aren't where we want it to be. So we want to change these things. But yet your purpose and productivity. If you look across North America, team leaders throughout North America, they're hoping to get somewhere from 8 to 10 per person productivity. And I'm talking higher volume organizations. Again, keep in mind, I'm looking at 500 million as an average sales volume of my audience typically, here's what I'd say, it's really simple, is smaller you are, the higher the per person productivity is. If you can look over time, what happens is as there's more agents and you grow, per person productivity naturally takes a hit. So I said, well, wait a minute, our per person productivity, so the true measurement of productivity, and I'm not getting into that, that's true measurement of productivity. I'm not talking about true measurement of profitability because then we get into cost of goods sold and what kind of commission splits the agents are on and scenarios like that. So there's so many rabbit holes, I'm not trying to leave them out. I'm just trying to make a point right here of the misdiagnosis. The misdiagnosis. So our purpose and productivity is great. Now watch this. If we want to up the standards on our current agents and our per person productivity is above the rest almost throughout North America. What do we risk? Here's what we risk. We risk pushing people away. We risk pushing people. Ah, it's just the way. Knock yourself out. I've been in this game long enough to know you can't make someone do more. You can do anything you want. But I'm going to tell you something, what's going to happen. You have massive attrition, okay? You're going to have people feel that they don't fit in when you've hit a level where, okay, you know what? I feel really good about my purpose and productivity. Guess what? You've proven. Here's what you've proven. You've proven that you're a pretty doggone good leader. You've proven to have good purpose and productivity. You've got a good retention, okay? You've probably got pretty good onboarding, good training and accountability. Leave it alone or leave it. Sit there for a moment until you ask the final question. Well, let me ask you this. How was recruiting? And there was the diagnosis, recruited half as many agents as they needed to recruit over the last 12 months. And we did a little bit of Math on what? 30 more 2.5 recruits of a large organization a month. What would 2.5 recruits, more recruits a month do for both? Oh, my gosh. We wouldn't have all those problems. Okay, great. So you don't have all those problems. Get it? They are a product of the problem. Let's go a little bit deeper. What is the activity that is taking place right now? We looked at outbound call volume and appointments. There it was. So think about this. First of all, for you as a team leader, I think philosophically, team leader, broker, owner, here's what you need to get. Be really cautious. And I'm not talking about, you know, analysis to paralysis. I figured this out in about seven minutes of a coaching call. That's all it takes. A good coach should be able to determine what the problem is in the first five minutes or really, so maybe I'm a bad coach. If it took me seven minutes, okay, I was able to find this. But think about this. But think about if they started pressing the agents for more activity, probably could have pressed them right out the door, made them feel they don't fit in when they've already established a baseline of purpose and productivity. It's above all else. What if they change their training around because we, we want to tweak the training or how we coach the agents up or lead rotation or whatever because we think this will squeeze more deals out. It is such a mistake. Leave the things alone that are working. Until you find out what really is not working and what's contributing to revenues not being where you want them to be and having to maybe reduce staff and ask more of existing staff, maybe having to reduce other expenses maybe like your marketing, which, you know, you want to continue on with a responsible marketing expense. So here's what it came back down to, though. 30 more recruits would have blown the doors off the organization. The good news is, the good news is this leader, and this isn't about besting coaching. If you do great. If you don't, that's fine. Okay? But here's the thing. But I do want to give you just some, some really good, solid business advice. First of all, this, I hope you captured the lesson here. Misdiagnosis, okay, is going to create a condition where what you prescribe will be wrong and things will get worse. Things will get worse. That's simple math. So take the time and ask all the questions and have all of your information. Be willing to look at everything before you diagnose with challenges. Now, here's the scenario, though. Make sure that, you know, if you have a coach or a voice of reason or you know, just someone on your staff, you know, make sure that they're competent in that area. Make sure that they've played, they've run the play before. I mean, listen, it's kind of hard as you're analyzing a business and you're going through all these different scenarios and you haven't run the play, you haven't run the play. You don't know the unintended consequences. Okay? You're not able to determine. So, okay, you got this problem, that problem, that problem. Oh, it's really not that problem. It's this situation right here. See, there's symptoms and there's diseases, okay? And so many people mistake the symptom for the disease. Stop mistaking the symptom for the disease. Make sure that you've got. If it's a coach or someone on your staff or, you know, appear. That can cause you to look deeper and ask the right questions so that you make the right decision. Now, here's the beautiful thing. This is a great organization, great staff, great systems, processes, marketing. We found the one scenario, and the one scenario we got to go back and visit is, oh, there was a gap in the recruiting activity. Just was. And so now we can focus on that. You know, I've got another organization I was working with too. Okay, what are we going to do next? And this is going off the diagnosis and prescribed early in the year. What should we do next? What's the one thing I should be doing next? I says, you know, that's the worst question in most cases. Why is that? Because the first question. See, worst question. First question. The first question goes like this. What silo of the business is not operating at 80%? Why 80% should be 100%? Because you're a leader and leaders are unreasonable. So. And no one's gonna ever do it. The level you expect, the level you can or level you want to pick one of the three, whichever one it may be. Okay, let's just keep it real. I've got a transaction coordinated, by the way. This was about a year ago right now. So what should I do? Go all in. We're talking about an organization with well over a thousand and thousands of transactions. Well over a thousand. I'll just say that it's a different organization. The first one where I said, hey, we asked all these questions, they thought I had all these problems. We need to cut stuff. We need this and that. No, you need to recruit more. But if it is proven and actually didn't recruit more, you need to do more activities. It was in the process. You can say recruit more. Okay, good. Okay. But, okay, what are we currently doing? We're doing this. We're not doing enough of that. So that's really the. It wasn't recruit more. We got a dial more. Just simple stuff. This one here, it was. We need to go all in. So what do I do? You go all in on the transaction. Coordination, part of the organization. Because you want your agents to actually have smooth transactions so they close so they have a good experience so that they talk about it. It's one of those things that, hey, we all want to get paid, okay? Transaction coordination is part of it. We want to make sure we don't have fallouts, want to make sure our agents feel good and experience in the services that we provide for them. Okay, great. Went all in, out notes, maybe 30 days of that, boom, got it dialed in. Let me tell you something. That organization doubled. They stayed on the same path they were on, okay? They doubled their units, sold that year. Now, is that the one thing. Well, I'm going to tell you what, that was the one thing that wasn't at 80%. So you think about this. They were recruiting on a huge rip, okay? Huge recruiting rip. Well, what happens if they kept recruiting on a huge rip and transaction coordination was imploding right underneath them? Okay, let me come back to the diagnosis and prescribe another scenario. And I think you should always be analyzing every single person that works with you for you, I call it beside you. And that scenario is one where we're looking at an employee or a staff member. Am I getting the ROI on that employee? Okay, there's a lot of scenarios. You know, first and foremost is, are they a good person? Do they bring, you know, value to the community, positive attitude, things like that? You know, just the basic things that we kind of expect of human beings. Okay, good. We're good there. Here's the mistake people make too much is, what's my ROI on them? Well, that's important. Okay? But if you're going to measure roi, you better have the whole picture. Let's talk about recruiting. Let's come back to that one the leader was taking a look at. Okay, great. What should I compensate someone for recruiting? And there was a number. Okay, I'm going to compensate them. X. Oh, my gosh. But, you know, based on historical data and what's happened, you know, I think I need to reevaluate that because I'm not getting that roi. You're not? Oh, okay, now we get why in retained company dollar for an agent in their first year? I said, well, agents only stay for you. Stay with you for a year. Oh, do you know how long they stay with you? What is the average retained company dollar of a recruit in year one? What's the average retained company dollar for a recruit that stays with you two years? What is the average retained company dollar for a recruitment that stays with you three years. And I said, I don't even need to know. But when you come back to me, I know that you're probably going to be just fine. But here's the piece I want you to get. You've got to have the whole picture. And I know it may sound basic to you, but I think it's really simple. Listen, I mean, you recruit them once, and that human resource that brought the person in, it gets compensated for however you pay them. Okay? They could move on and bring in another recruit. Well, in the meantime, that recruit they brought in could bring in revenue for year one, year two, year three, year four, year five. Find out what that number is. And the ROI makes sense. Okay? Because what could happen is the wrong diagnosis and then the prescription. The prescription could be, oh, my goodness sakes. You know, that maybe this person isn't working out. There's the first one. I mean, who. Who wants to keep someone on for a sustained period of time that is in a revenue producing role. Recruiting is a revenue producing role. Okay? And you're not getting a return on it. It's like dollar for dollar. I mean, that doesn't make sense. I don't hire people for dollar for dollar return. Okay, but you've got to have the whole picture. Well, imagine that. Gosh. Actually, someone could have gone out the door. And I've watched people do this one. Let someone go. And why'd you let them go? Well, they weren't giving us enough of this or they weren't delivering enough of that. I said, okay, well, who did the measurements? See, that's the thing where you've got to have a coach that has actually done what you're doing or trying to do. I'm telling you now more than ever, you better have a sophisticated coach, consultant, voice of reasonable, someone that understands business. Because here's the scenario. Well, I'm not getting return on the. On the investment I'm making on this staff member. It's a recruiter, whether it's an isa, whatever it may be. Okay? I'm not getting the return on that. It makes no sense. You let someone go and they're actually someone that's better, much better than who you would bring in. And then finally you wake up and go, oh, wow, I didn't look at the whole scenario. You know, let's go to another one. Let's talk about Zillow. Zillow's always fun to talk about. Zillow. Zillow's terrible. That split's terrible. What if I told you, take Zillow and, or I don't care what lead source. And they chop it down even more. What if they came for you? Now we've got easy home search, which we sell exclusive county, lead flow. No one else can buy that county once you have it. And there's all kinds of players in the game. So I'm. Listen, I don't, I don't worry about competition. I've got my product. We believe in our product. We got great people. We do it totally different. If, if I was out there operating when I do Zillow, of course I would. I don't care what the fee is. What are you talking about? Well, the first part is, I mean, I've got to certainly find a group of agents because I've done it. Let me tell you something. Back in 1997, 96, I had the USA Movers Advantage program. We paid a 50% referral fee off the top and then 50% split to the agents. You need to do the math. And I had agents crushing it. How come? So here's the thing. This is another part of good business. See, bad leadership makes Zillow a problem. Bad leadership makes Zillow a problem. Good leadership makes Zillow or any. I don't care what they charge you, you know, as long as it's not more. And I'm being a little bit extreme, but I need you to get this point. As long as it's not more than what I can get as a return. John, you're talking dollar for dollar. Yeah, because you think small. See, everyone's so lead dependent. What am I making off the lead? It's not about the lead. How many of you can tell me before you've either dropped Zillow or complained about Zillow or seen it's a, it's a cost. How many of you have done the math on how many transactions you've done because of that Zillow listing, Zillow buyer, that new sphere of influence that that transaction put your organization, your agent into that they never would have been into. Well, you probably could. Can't. Because here's the problem. It's not a. I don't care what lead portal you use. We can argue that it's a whole different argument. But let's get into the argument of you as a leader. So you are generating and you are training your agents how to generate two transactions within 18 months of every closing from the recent closing they had. And I don't care. It's from realtor.com Easy Homes or just Zillow. See now why don't you do the math on that? Why don't you do the math on that? Well, you can't because A, you don't have a program in place to that. B, you've created and fostered a condition where everyone is dependent. They're dependent on the Zillow, the next Zillow lead. That's purely what your relationship is. And guess what? That's not a relationship. See, that's transactional versus relational. That's independent. Independent. That agent is independent. The only thing they're connected to is what's important to them and what you're going to give them next. And they're dependent on you. Well, how about this one? Okay, how about an interdependence? I'm going to give you something that's an opportunity. Okay, great. Is the margin or the split the one you want? Agent. But let me ask you this, agent. Our average sale price is 400,000, 450,000 at our team. See, here's the thing. With our training and our coaching and your commitment to being a professional real estate agent, okay. We expect you to go out and generate. I'm putting you into a new sphere of influence, a new neighborhood, a new work environment that these people, these buyers or sellers are in that it's your responsibility to then use to build a deeper relationship. Train them to send you business and train them to do business with you again. Yep. But here's the problem. Either most don't know or if they do know, it's terrible how many pieces of business they generate off from one piece of business in the next 18 months. I know. I did it as a branch manager, did it as an executive because we taught our agents that. See, here's the question I always ask agents so ready, like misdiagnosis. Oh, you're looking so narrow minded. Okay. The game is long, it's not short. You're so narrow minded. Well, oh my gosh. They charged us this fear those leads are too much or those leads are too much. No, what you just said is you do nothing with the new relationship that you were provided. That is a bottom of funnel lead. Continue to generate more business from them and multiply. Because here's the question I always ask people. See, I'm going to be a terrible leader if you have to work two years from today as hard as you're working today to make the same amount of money. And this is why your agents leave you, because they do. Because they're dependent on the Zillow leads. They're not working that sphere of influence of each closing they have from Zillow, where they can probably go generate another lead from that one closing where they actually get a better split. Then they start seeing the math and saying, this is great. For every one Zillow lead, it's kind of like a marketing expense. But I get also that. That. That momentum and consistency of a transaction, you can't put a price on that. Everyone's had slumps in sales, so it got some consistency. I've got some bucks that come in. I'm getting into another sphere of influence. Let's do some math. An agent closes 10 Zillow leads in a year. And this is not me defending Zillow. This is me pointing out the holes in your leadership and the holes in your way you analyze your business and misdiagnose and make poor decisions and why you don't grow. Great. You're gonna close 10 of those terrible Zillow leads. They're great. They close, they're bad. Because guess what? How much I make isn't big. Well, see, you're thinking only about your now money. It's that money that comes later. See, if you follow a system and process where you train people to send you business like a good business person should, okay, you should generate 20 more pieces of business off of these 10 over the next 18 months. That math. Maths. Oh, but wait a minute. Then those 20 more that you sell are from these 10. You should be able to generate two more pieces of business on them over the next 18 months. If you train people to do business with you and send you business. Well, my math tells me that 20 turns into 40. Like this game is so easy. But you want to know what? Here's the problem. First of all, it's playing the short game, misdiagnosis. And even with the right diagnosis of, you know, oh, great, there's an opportunity here. If we work this sphere of influence to generate more business. No one's coaching, training and leading to it. So just some different scenarios as you take a look at analyzing your business. I think people live too service. They don't see the whole picture. And I can understand why, because there's a lot of people out there that are either not willing to seek competent counsel, unfortunately, they're getting incompetent counsel, and. Or remember this diagnosis. Right diagnosis, then right prescription. If you're not where you want to be, there's probably a misdiagnosis. Talk to someone and get the right diagnosis, you get the right prescription, you can win. Have a good day.