Of all the challenges that come with scaling a real estate team, the hardest ones usually come back to people.
At BAM Camp: Team Leaders, team coach Dave Richards walked through three teams he has worked with that had each hit a different people-related ceiling.
One had outgrown its organizational structure. One had a leader doing too much because the right person had not been elevated. And one was tolerating someone in a critical role who could no longer operate at the level the business required.
The teams ranged from roughly $150 million to $1 billion in annual production, but the underlying problems were surprisingly similar to the ones smaller teams face every day.
Richards also shared the framework he uses to diagnose those problems before they become expensive.
The 3P Filter for Assessing Your Team
Richards uses a framework they call the 3P filter to size up team members.
The first group is partners, the people who fit the team’s culture and have the skills to do a phenomenal job.
Projects are the second group, and Richards described them this way.
“These are the individuals that we see potential. They fit us culturally, but they’re still a development side to the skill.”
He says team leaders tend to fall for projects, and he called it out.
“We get attracted to projects. Some of them, they just remind us of us. ‘That’s what I was like whenever I was younger. They’re going to be great.’”
The problems come when you’ve got too many projects on the team. Richards compared it to the situation he and his wife were facing with their house: the list of projects is so long, they remain half-finished, at most.
The third group is problems. A problem can be someone who doesn’t fit the culture. Richards said a problem can also be a good person in the wrong role:
“The problem isn’t the fact that they’re a bad person or they’re causing disruption. They’re just a bad fit for the role of where we’re at as an organization, and it’s a problem that we’ve got to take a look at.”
When Richards starts working with a team, he looks for two quick wins:
- A partner he can promote into a bigger role
- The problem the team leader has been carrying
Read on for three distinct challenges team leaders face and the solutions that helped them grow.
Problem #1: Your Team Has Outgrown Its Org Chart
George Laughton‘s team does a billion dollars in production a year and is moving from a team to an independent brokerage.
The challenge was no longer simply adding more agents. The existing structure was beginning to put a ceiling on how much its strongest leaders and producers could grow.
The new vision has two goals:
- Give top team leaders a home where they get support running their own brand and team
- Give top individual agents a home where they can grow their business
During a whiteboard session, Richards sorted the team’s agents into four levels using about five months of year-to-date data:
- Level one: 175 new agents in their first 12 months, learning the fundamentals
- Level two: agents with consistent production
- Levels three and four: the team’s top producers and team leaders
One issue that often comes with scaling is when those high-level team leaders hit a limit on how many agents they can handle.
At that point, the game is more about structure than numbers.
Richards has one rule for any restructure: figure out the roles before you put anyone’s name on the chart.
“The difficult part about this is that when you take a look at an org chart or an org shift, there’s no names on the board. Why? Because the first thing we have to do is figure out what the roles in the org chart look like. Then we start looking at people.”
As Richards explained it, when team leaders do it the other way around, they make compromises on what the role should do. One person’s primary role could be recruiting but they might also really enjoy assisting with training, and maybe a few other things besides.
So, the role is created based on an individual’s preferences.
If that person then leaves the company, finding a replacement becomes an ordeal, because you’re looking for someone who can take on that individual’s a-la-cart selection of roles.
Get clear on your roles first. Then look for the right people (however many you need) to fill each one.
Problem #2: Too Much of the Business Still Runs Through the Team Leader
Ruben and Corina Luna run the Luna Team in Phoenix’s Southwest Valley. When Richards started working with them two and a half to three years ago, the team was doing about $150 million in production, but roughly half of that production still ran through Ruben.
The team was growing, but Ruben remained the person moving too many parts of the business forward. Until that changed, the team could only scale so far.
He explained what Ruben’s days looked like at the time.
“He’s picking up the phone and filling the pipeline. He is actually the one moving the ball, moving the client meetings, moving things from that standpoint to make sure that things move and go forward from that point.”
The team had hired a sales manager to help grow its agents. Richards said the hire didn’t take enough off Ruben’s plate for the team to pick up speed.
About 18 months in, Richards found the answer inside the team. A part-time contracted team member was running one small part of the business, the Zillow platform. Richards met with her and saw a strong operational mind, and he described what happened next.
“We elevated her to a director of operations. She took over all of that part of it. All of a sudden it took a significant pressure off of Ruben’s shoulders.”
Richards gives the credit to that one move.
“The next year he closed over $300 million in production. Just 12 months, one move strategically. And all of a sudden it opens up Ruben to be able to focus on what he’s great at to get that expansion.”
The team kept growing from there. Richards said it’s on pace for around $500 million this year.
Along the way, the director of operations told Ruben she wanted to move into production on the team. Richards said the team took a fresh look at the role before hiring anyone to fill it, since the team had grown and the job had grown with it.
“It’s a different role. It’s a different need. So we need to take a step back, zoom out and go, ‘What does that role need to become in order for us to find [the right person]?’”
Depending on your team’s current needs, the new or evolving role could look very different from what you needed when you first defined it.
Problem #3: You’re Working Around the Wrong Person
Richards’ last story came from a team that looked like a success from the outside.
From the outside, it looked highly successful. Inside the business, the founder was constantly stepping in to solve problems his operations leader could not handle independently.
The issue was not that the employee was a bad person. The problem was that the business had outgrown what that person could do in the role.
“They could take what you tell them to do and work from that point, but they actually couldn’t identify the problem and then take it to resolution without you.”
As a result, the team leader was stuck filling that gap. Every time.
Richards calls this pattern the region-beta paradox. People act on a problem once it gets catastrophic. As long as a problem stays tolerable, they work around it.
“That’s what they were doing. They were working around this individual… it was actually preventing them from scaling and growing.”
The team built an exit plan for the operations leader and hired a higher-level operations person who could handle a half-billion-dollar team and keep it growing.
Richards described what happened after the new hire started.
“They were able to bring that person in and within 45–60 days, they were bridging between ops and sales. They were able to build out great relationships [and] build out their process.”
The Test: Who Needs More Responsibility, and Who Are You Tolerating?
Richards closed the people part of his session with a writing exercise. He asked each team leader to write down two names:
- A partner who handles one area of the business now and could do much more
- The problem person they’ve been carrying
He then left them with one more question:
If you got 50% more volume today, what would break first?
