Brokerages aren’t families; they’re neighborhoods

by MPA03 Nov 2014
It’s almost mandatory these days, if you run a small brokerage, to refer to yourself as ‘one happy family’. But that’s not really true is it? Families are the ultimate expression of unqualified trust (perhaps why the brand is so important for brokerages); whilst employees won’t turn up if they don’t get paid.

Professor Art Markman of the University of Texas has drawn up three types of relationship that predominate in business; family, strangers and neighbors. Writing in the Harvard Business Review, he argues that a business should resemble a neighborhood; we’ve adapted his arguments for the mortgage industry.

Family relationships
Families, in the context of Markman’s argument, “are people with whom we have a close bond and for whom we do whatever is needed, often expecting nothing in return”. However in most organizations not all employees put in the same amount of effort; those who put in their all will gradually become demoralized and suspicious that others aren’t properly supporting them. That’s why, unless you really are working with relatives or spouses, the happy family tactic won’t work.

Stranger relationships
You pay strangers to do things for you, and so in an office of strangers, explains Markman “every interaction becomes a fee-for-service transaction and strangers are not motivated to go above and beyond the specific tasks presented”. Moreover an office full of strangers is hardly a motivational atmosphere for people to work (or want to work) in, and doesn’t project a good image to potential clients, especially if you want to encourage referrals.
 
Neighbor relationships
We help our neighbors, but also expect help in return. Neighbors identify common interests and work towards them, like a business. This won’t happen naturally, Markman warns; employers need to prove to employees that their work is mutually beneficial (beyond pay), whether it’s through offering training and allowing employees to engage with management and help set the goals of the brokerage.

Finally, you need to be on the lookout for when a neighborhood relationship is disintegrating into a group of strangers; one sign Markman identifies is when employees concentrate on their own narrow jobs to the detriment of shared tasks and goals.

Is your brokerage a neighborhood – or do you believe a business can function as a family? Please add your views below, and you can read Markman’s original article here.

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