How to Pivot Your Finances and Leadership in a Crisis

Hey there. Welcome back to the Business Freedom Podcast. This is Lars Hedinborg, founder of Real Estate B School and co founder of High Performance Real Estate Advisors. So I'm going to do a two part podcast series here and it's an interview I did with one of our members, Dave Hook, who's been in our community probably over four years. When he started, his wife Jenny was pregnant with their first and they have three children now. He started out as a like just working 70, 80 hours a week and doing really good, selling about 70 to 80 homes a year. And the challenge was just the amount of hours and the stress and all that. And last year he did about 2.4 million GCI on the right economic model, profitably out of production, has amazing leaders in his small team in Central pa. And he breaks down four things that he's done to pivot his business that are timely because I don't think this crisis is going away. And so I'm calling this episode how to Pivot yout Finances and Leadership in a Crisis. So this is part one. Part two is going to be how to pivot your productivity and communication in a crisis. So before I let you into that conversation, we just launched our Business Foundations Program. There was a missing piece of Real Estate B school. It was to allow folks that hadn't quite reached, you know, our entry level point was 500,000 GCI, which is about 1% of agents across the country. And for those of you that want to build a business that's sustainable and leveraged and systems driven and profitable and doesn't rely every bit of it on you, our Business Foundations Program is the place to be go and the place to be. I would head over to getbusinessfoundations.com that's getbusinessfoundations.com and there is a replay of a webinar on that page which, yeah, you can watch the webinar. Really good information. I break down what's in the program toward the end of that webinar. So getbusinessfoundations.com and stay tuned for the first part of the interview with Dave Hook. I asked our next guest to join us. He has been in our world. I mean, he'll probably tell me here in a second. It feels like a long time, at least four years. And I've just appreciated watching his journey personally and professionally and watching him just elevate folks in his business and just do it, you know, seemingly with, with a whole bunch of grace and just really been impressed by this guy. He's challenged Me personally in so many ways and just runs a really good business and it wasn't always, it wasn't always like that. And so I want to spend a little bit time with Dave Hook today and he's going to take us through some of what he's been, you know, failing fast through as his state completely shut down real estate. And you know, one of the things I admire in him is his ability to focus and get the next most important thing done. I think as business owners, I think we get, I know we get distracted all the time with things that are not going to move our frickin business forward. The discipline to focus on the next right thing is it's the secret to unlocking an awesome business. And so I'm speaking to myself when I get sort of emotional about, you know, getting distracted. I don't know what's the best way to get Dave on here. Can we make him, how do we like allow him to talk? I'll do it here. Alright, cool. Dave Hook, you there?

Yeah. Can you hear me?

I can hear you and I can see you.

Awesome.

I'm gonna put it on speaker view so I can. So when you speak I will see you and when I speak they will see me. It's beautiful technology. So let's, let's get into it. So the reason I tagged you to join us, I just have a lot of respect for you and what you're doing and just the sharing you do in the community and your transparency and where you struggle, you know, and business is messy even when it's going really, really well. And it doesn't help that, you know, this pandemic just jumped into the middle of all of our businesses and just seen you respond swiftly and do some tough things and lead well and to ask your leaders to lead well and to step up in what they're doing. There's lots I want to cover and we'll kind of get to it. I think for some that are in the thick of it right now and it feels like growth in their business isn't possible without them spending more time, more stress. Can you just briefly kind of take us back to where you were when you started with real estate, B school, what life was like then and, and then maybe just kind of give a little bit of a snapshot of last year kind of time, money, stress and those sorts of things. I just want to set the stage for everyone.

Yeah, for sure. Well, you know my story. I have a brokerage too and you know, we have maybe 130 realtors and teams in that company. And then we run our team with the help of some great people and then we have a property company. And as I mentioned an intensive or two ago when I first met you, I had just continued to take on more and more and more. And I think, I don't know why I was wired this way. Maybe a lot of us are. I know for me, I just defined like success in my life by one thing. And I felt like it was, it was like some combination of how much I could do and take on and how big this stuff was or something. And, you know, there was a point, I think it was probably 2014, you know, going into 15, where I was, you know, back to working 80, you know, plus hour, week sometimes. And, and it was, you know, we were, we were having our first child, Jenny was having Henry. And you know, I was exhausted and doing everything. Every decision had to come come through me, you know, every tenant issue, every agent, you know, question, every financial question in my sales business, in the brokerage and everything. And it was, you were just trying, you were like the spinning a thousand plates, you know, and you're trying to all keep them, keep them all spinning. And you're always afraid something is gonna, is gonna drop. And of course it was the, it was the opposite of a successful healthy, you know, healthy lifestyle. My spiritual journey was failing. You know, my marriage was good, but it wasn't sustainable like that life wasn't the next 30 years. So I was thinking about quitting real estate altogether and actually getting into something completely different. Another story. But you and I got to talking and, you know, I just decided to trust that I was going to do this thing with, treat my business differently and kind of set it up differently. And if it didn't work, it didn't matter because I was going to get out of it anyway. Right. And so we started this journey together in 2015, I think with real estate, B school and you know, fast forward to, you know, I was doing all the production in my sales business and managing the whole brokerage. And fast forward to last year, you know, just as of actually really recently we've transitioned all the properties. Someone else is totally managing that and a CEO who's running the whole brokerage. And for my sales business, it's just, it's better than it's ever been. I think when we started with you, it was, you know, maybe 55, 60 sides with me doing everything. And then now we have a leadership team who's awesome, great leadership development program. I just couldn't be prouder of them. And they essentially, you know, sales director, operations director, lead isa, marketing director, run the company. And, you know, I'm down to what I consider a normal work week. So 40 hour work week. And home with Jenny every day at 5:45. Because of the boardroom interviews, it's no longer 6:15, so it's 5:45. And I'm not doing work at all on the weekends as family time. And so it's just a whole different thing. And now we're. Last year, I think we, you know, our production went from the 55 or so to 255. And I'm not in the client meetings anymore and also not in the day to day business like I once was. So it's been a heck of a journey over the last four or five years.

Yeah. And I want to get into some of the things you've done here. And some of it really has been over the last few years, some of it has been more acute to what's going on with COVID You know, what I've seen you do with the pivot on expenses and the cadence with the team and your state being shut down. Can you kind of get into a little bit of that? What you did to pivot expenses and then how you pivoted your leadership and then how Jenna and Drew have stepped up as well. And real quick, let me position that. So as you go from the person doing it all, you know, and you commit to building something different, you create all these voids, you know, and opportunities for folks to take over your buyers, to take over sellers, to take over managing the sales team, to take over managing the ops team. So it's not like, you know, Dave is just building this thing to relax on a beach. He's giving opportunity to those around him so they can all live a normal life. They can all have massive opportunities. So I want to make that clear. You know, when I look at Dave's team and the culture of his team, it's opportunity. It's equal opportunity for everyone. So maybe talk a little bit about how you've pivoted your leadership and expenses you can touch on a little bit. I'm assuming most people have pivoted their expenses. Expenses are different than investments. Investment in coaching is not a freaking expense. Expenses are the things that don't make you money. So let's just be clear on that little public service announcement for real estate B school. Yeah, talk about that. Talk about how you've pivoted here recently.

Yeah, for sure. And you know, it's like you said, I mean, I think there's. If I had to kind of package it, I think there's a couple things that happened during this particular, you know, crisis and change. It was a. It was a pivot of the expenses first. And that was like a week, two week analyzation of things and where we stand. And that's really to protect our people and protect our business and what it stands for. So line by line, looking at everything. And it's amazing how much fat you can trim out of your company that you just realize you haven't looked because you haven't had to. And I look pretty regularly, but I didn't look at this level with a highlighter. Two years of QuickBooks and we were able to cut our budget in half without really changing a whole lot. And we'll ramp some of that back up. But that was just to keep everything functioning and just protect our people in the business. And so then as we look at that kind of protection was done, we look into the future and what we kind of need to do with people. And I go back to a podcast I listened to with a pastor. He's not my pastor. It's Craig Groeschel. Some people may have heard of him. I don't know why I got this. This dent to me, it was entitled Don't Waste a Crisis. And it was really impactful to me. And it was the kind of theme of it was like, we probably won't have an opportunity like this again in our lifetimes to be this much of a light to others. And as we're business owners, like, the darker things sort of get and the more fear that comes about, the brighter our light shows shines. And if we decide not to enter into that darkness and that stuff and just kind of shy away from it, we lose the entire opportunity. And we might not have another three months where we can be this much of a blessing to our team members, you know, to be there for them and to be there for our clients and the community. And there's. Where there's. Where there's more need, there's more opportunity, I guess was the kind of theme. So that was just an eye opener for me. And so just to think about what that means, if you're in a leadership position, whether it's with your clients and you're leading them through this fragile thing or you're with your team members, it's one assistant or it's a couple agents, these people are all counting on us to kind of step into that. And I think what it hit me was just kind of contemplating, what do people need from me? And full disclosure. Like, there were a couple weeks there where my team members, my leadership team anyway, would tell you I was in my head, like a good bit. So it wasn't all rosy, but, you know, there was. It's a little isolating, you know, and fearful and you kind of feel like for a little bit sometimes like everybody's looking to you to give the direction and you've never done this before. And for me, that was a hard week or two of just like, am I supposed to have all the answers? Do I have to look like I have the answers even though I don't? What's the correct posture to wake up and even communicate to people? So there was some pressure for me there in full disclosure. But after I listened to that podcast about don't waste a crisis and just saw this as an opportunity to be a brighter light to people, and I don't have to have the answers. I'm not going to have all the answers. But I can ask them how they're doing today, right? I can ask, do you need anything? How are you doing? And as we got more answers, I had the ability to communicate answers to them. So the questions that I felt like people needed to answer, my team members needed to answer were, number one, what what are we doing? And number two, why does it matter? Number three, how can I help? And I feel like those are the answers that our team members of the people around us always need to be able to answer. Whether it's a crisis or whether it's a booming market. If we're in leadership and there's people around us, customers, our database, our team members, it's what are we doing? Why does it matter? And how can I help? And so as I went back to those fundamental basics that are, you know, that's something I'm always trying to answer for our team. I'm like, that hasn't changed just because this crisis has changed. So to answer your question, you know, it was just reaffirming to our leadership team in an off site meeting and then in speaking with them, you know, what are we doing? Well, our core passion is to enrich lives. And that's always been what we're doing. And that's not changing just because the markets change. So we're here to enrich lives in the way that we speak to people, in the way that we check in with people, in the way that we serve people, whether it's our teammates or our communities. And then why does it matter? The only thing that changed about why that matters was that it mattered more because of the need than it did before. And so, you know, you know, it's just a matter of, like, we went in, I think, to this whole crisis, and fortunately we had a leadership off site meeting, so our quarterly leadership meeting. And we got to kind of unpack a lot of that as a leadership team and just have some really vulnerable conversations about like, again, like, what's most important during this time to our team members. Where are the needs? Where are the opportunities we can step into? And so we're just able to take our core passion to enrich lives and then kind of double down on that because there was more need around us. And then, how can I help? In that meeting, we were able to redefine and triage the company like we always do. And we use the REBS key drivers worksheet to do that. So we rate the health of each department in our company. And so, you know, a talk I gave a couple years ago is every business has, you know, marketing, sales, you could bucket those two together or separate, you know, operations and client care, finance. And then I always add on to that ourselves, right? And the health of me and my family and how much sleep I'm getting and all that. And when you can go around as a team and kind of triage that and rate those departments and its health on a scale of 1 to 10, I think it just reveals collectively where we need to put our energy. And that defines the answer of how can I help? So we know what we're doing, we know why it matters. So those first two didn't really change because there's a crisis, what we're doing, why it matters. What changed was how can I help? And so our strategy to enrich lives and meet the opportunity that's out there with our team members and their clients and the customers. And so we were able to triage the company and realized that, you know, there's areas of our business that are going to suffer because there's a change in the market and there's uncertainty out there. And this was an opportunity that we'd probably never have had things not been shut down in our state to work on systems and projects that we never would have had time to do before. And so we always try. I think we're tempted to evaluate the health of our company. I know I have been based on number of transactions in sales in gci, but the truth is that the health of our company, you and I talked before there was A year where I said, I think I'm going to maybe lower my goal on sales, you know, and increase the number of systems we're going to put into our business this year. And so you can have a year where you lower your goal on sales for the sake of creating extra margin in your balance sheet or creating extra, you know, systems in your operations department, or just creating a date night for you and your spouse and creating a different routine where you're, you know, you're able to work out and get a better mental state personally and be there for your kids.

And I want to stop you there for a second. And you actually did a whole session on that, I think, in Charleston. And I want to make sure everyone heard that in an industry that, I mean, just relentlessly touts number of transactions and top line. And this team is doing this. And, you know, no one is measuring their growth, at least from what I can see. Very few are measuring their growth by the stability of the business, by the stability of your marriage, by the stability of your physical and spiritual health. And so I just want to make sure everyone caught that, that, you know, you may have a year where you measure your growth differently, where going from 80 to 160 transactions on a faulty foundation is not the right move. And it's okay to build out for foundational systems that you can then sort of launch. Launch the business from. That was the year. I mean, you were at about 100 transactions and you. You went from like 1:10 to you. You had a flat year on purpose.

Yep.

Yeah. And there was nothing flat about it because you probably cut out 20 hours a week of work. You rose up your leadership team during that time. You were running the. The quarterly cadence. I mean, you did a lot in the business during that time.

Yeah, yeah. So that's just really important to give ourselves a break sometimes and. And say, hey, my sales in quarter two or this year might be different. And yet there's huge opportunities to bless our team and grow our business and our families in other ways and come out of this whole thing. And sales will always. There's always opportunities to grow sales. So it's really good. So we were able to. I think that the redefining of how can I help? Was probably my hour as a leadership team. Our biggest move forward in this crisis is reestablishing and communicating to our team. Our vision and mission hasn't changed because of this. We're here to enrich lives. Why does it matter again, more than ever? Because it's a little darker out there. And we have a bigger opportunity to do that. And the biggest, the big move then the big pivot that changed was, all right, these guys, our whole team needs a new definition of their jobs for a little while. And so we were able to triage the business, look at where we needed to put energy, what systems we needed to build while we had a little bit of downtime. And then everybody came out of that off site with new job descriptions and new responsibilities that they were going to take on and be accountable for, you know, by the end of this 90 day period. And then that trick, you know, that, that trickled down to our, to our agents and, you know, our sales director just did an awesome job of drew on our team of meeting with our agents and recognizing that we can't do physical real estate. We couldn't even go into a vacant house. We still can't. A photographer isn't even allowed to go in a vacant house in our, in our area. So we have all this listing, contracts and things signed, but we can't even put, we can't move them at all because of the restrictions. So we just, we just had to change what we were tracking. And so we went from, you know, tracking on our scorecards and our agent accountability. They were used to getting on a dialer every morning and doing, you know, lead gen. But no new inventory meant our call volume and leads were cut by about 75%. So we had to redefine what the agents were working on. And so instead of being accountable in the morning meeting to the same things they always were, we brainstormed as a team what new things we could be accountable for and found ways to have wins. And I think the, you know, how can I help? Was just really well redefined by our leadership team. And I think that's been helpful through this process. And it just, it was a good reminder to me that people want to be led. They want to know what their jobs are and how they can help people really do. And I used to, I feel like, try to do everyone's job. And the more I've grown with this program, the more I've realized, like, that's not, that's not what people want. People want you to give them clear expectations and tell them how they can help do the thing that you're doing and then let them do it and experience that win and be empowered to do a great job. And I feel like this crisis was just, it revealed like the importance of leadership. And I just felt really fortunate to be with my leadership team and be able to redefine all those job descriptions and then watch the teams kind of, they've stepped into that and they've taken on new roles and it's not all warm and fuzzy. There's been, there's been some tragedy with our team, you know, in the past quarter, there's been some sickness, there's been, you know, family members that haven't been doing so well. But, you know, all in all, I feel really good about how the teams kind of walk through, you know, this, this together. So anyway, that's unpacking the leadership portion of, you know, expenses and then leadership.

I want to share. Jenna was on a couple, a couple weeks ago and she shared on a Wednesday training coming out of this or in this time to steal a line from the prophet Marcus Lemonis where he takes over a company and he looks at the team and he says, you don't need to wonder if you're going to have a job, you need to wonder how many jobs you have to do. And Jenna was like, I'm responsible for a marketing rock this quarter. And Jenna leads up operations. There's nothing to really operate right now. And so, you know, for those of you that have leverage with people, you know, the activities will change and the things that they're working on will change. If your administrator needs to help you with, you know, a database project, then your administrator who was closing transactions can do that really valuable work. So there are no boundaries with positions in a time like this. So I just, I wanted to mention that you kind of touched on it, but it's really practical. Like this has to be done to move the business forward. Who can do it?

Yep. And that's exactly what happens. Our TCs have rocks and they're related to database work and marketing and things that they aren't used to doing. But they know what to do and how they can help. And that's, honestly, that's really important to them and they're proud to be able to help, which is important to us to give them some direction.

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