Sure You Can Aggregate It, But Can You Distribute It?

One of the joys of my world is to encounter the similarities of opportunity and challenge facing clients within the three industries in which we are currently engaged.

Our thoughts trace back to a recent meeting in the Wexford County Road Commission garage in central Michigan. In attendance were twenty some county road superintendents each of whom is responsible for the treatment of snow and ice on the roadways within their county. We are there working with Western Star, a Division of Daimler North American and the manufacturer of what is undoubtedly the most technically sophisticated vehicle in North America. The challenge before the group is how to use technology to automate one of the longest standing tasks in the transportation industry--maintaining commercially passable roadways during the winter months. More specifically, how to motivate maintenance vehicle operators to use new technologies to both improve service delivery and, more importantly, to reduce the costs of highway maintenance. Ever present on the agenda is what to do about those who refuse to play.

By way of background, the transportation sector has spent millions researching the challenge of improving highway maintenance while reducing costs for the cash strapped governmental units responsible for the task. The results have been most impressive. Manufactures like Daimler North American, Monroe and Rexroth have collaborated with end users like our road superintendents to design and manufacture equipment that approaches amazing in its ability to solve the challenges. New de-icing materials, new snow removal techniques, new abilities to measure road conditions and technologies that allow the perfect mix on materials to land perfectly on just the right road surface. All of these advances have transitioned the task from an art to a science. All that remains is to create a labor culture that is willing to coordinate its skills with these technologies without feeling competitive or challenged. In some ways, it takes us back to the tale of John Henry who used his physical power and a sledgehammer to unsuccessfully compete with a steam powered drilling machine in 1871.

In other words, the transportation sector is committed to using technology to not just aggregate data but also to redistribute it in ways that will substantially improve its ability to generate profits, promote safe travel and improve the lives of all of its beneficiaries, including consumers.

How close is the tale of the traditional snowplow driver to the current status of so many real estate agents? Our industry is in the midst of a love affair with big data. We covet it, we scheme over it, we spend millions of dollars trying to mine it, we spend huge amounts of energy attempting to create coalitions to share it and we lose sleep over controlling it. Believe it or not, there are substantial elements within our industry that are still trying to deny consumers access to it. Almost unanimously, we gaze into the heavens as we gather to declare that data is our great hope for the future.

But what we are not doing is addressing the challenge of how to distribute it. Little if any effort is being expended in the area of developing requirements, techniques or standards relative to the distribution of information within the real estate transaction. As an industry, we continue to expound the idea that the agent should be the center of the transaction through various information control techniques and tactics. Yet little or no effort has been invested in identifying just what information should be distributed through these techniques.

The industry is appropriately anxious about the current agent value proposition. Many suggest that the centerpiece of value should come from the agent's mastery of all information regarding both transactional practices and information at both the general market and specific target property levels. Yet, here again, our research has developed no recommended practices or standards regarding what information buyers and sellers should have at each stage of their transaction.

Other elements within the industry seem to have succumbed to the notion that the information battle has been lost because today's consumer can use online resources to learn all that there is to learn about their transaction. This concept apparently suggests that students, having purchased the textbook at the onset of the course, need not attend classes or lectures because there is no need to know how to use the information within the text to either pursue excellence or to survive even the most basic of encounters. Lost in this misinterpretation is a giant sector of the potential agent value proposition, the ability to assist the consumer to make sense of the information to improve their personal real estate experience.

Lastly, we suspect that lurking beneath this suspicious decision-making process is the influence of legal counsel. Powerful contingents within this group have long advocated that standards regarding any aspect of agent practice are dangerous and ill advised. Like traditional opponents of universal suffrage and public education there are those who feel that risk management is best practiced through minimalism and plausible denial. This approach completes the agent value proposition circle and takes us back to where we are today with more and more consumers questioning, "Why use an agent?"

Issues of information distribution and analysis will have broad ramifications for broker profitability and influence. At the risk of oversimplifying what some will certainly want to qualify as an amazingly complicated industry challenge the following recommendations are hereby submitted:

As an industry we should quite focusing on controlling information and instead direct our attentions to distributing it.

Identify a number of key waypoints along the transaction path and establish standards and/or guidelines relative to what information an informed consumer should have at each point and how they should use it to further their interests in the transaction.

Differentiate between possessing the information and being able to evaluate or analyze it thus providing agents with a valuable addition to their value proposition and consumers with a safer real estate experience.

Adjust the knowledge management system to assist agents, in a risk management appropriate fashion, in their efforts to be both information providers and/or information analysts. In the final analysis it may well matters not where consumers get the information but rather how they use it.

With these matters implemented the industry can finally focus its attentions on sourcing issues. Who is wholesaling accurate, relevant and useful information and who is peddling junk that no one will ever need or us?

Our industry is fast approaching that intersection where the brokerage value proposition will take its appropriate place within the transactional matrix. Over the next eighteen months, we will experience the combined influences (in some cases, conflicts) of transformational investors and enlightened consumers. Out of this crucible will come a brokerage business model that will address and compliment the expectations, demands and needs of all involved. Information distribution will play a critical role in this new formula for success. We can do this.

To view the original article, visit the RECON Intelligence Services blog.