Some time ago, in preparation for an industry publication, another industry consultant asked me, "What are the most significant issues facing the MLS by 2020, what actions do you propose be taken to address these issues and what are the desired outcomes?" Following are my answers:

Expand what cooperation via MLS means.  If the perception of MLS is just about a place to advertise the homes with some private fields, MLS is very vulnerable. If we make it more explicit that cooperation is about a lot more than that, the MLS can grow stronger.

To accomplish that, we can:
  • Develop standards for compliance and enforcement: data standards and business rules, data distribution, maintaining "fair" online advertising using the compilation (IDX / VOW) and other uses.
  • Develop core standards for MLS data integrity business rules.
  • Consider the kind of government regulation the industry could be facing with regard to wire fraud and get ahead of it - MLS can be a part of that, if organized. Information security practices will be a part of that - much of the steps needed to deal with wire fraud take place during the "cooperation" phase where the MLS is, or could be, involved.
  • Develop and implement standards for brokers and agents ("With teeth") re: responsiveness to showing requests, participation in secure electronic communications and transaction management. Develop these as MLS monitored areas with supported core functions as needed. As elements of cooperation, these would seem to fall within the jurisdiction of MLS. What other areas, technological and otherwise, could be considered "cooperation" and be an MLS function?

There are many challenges ahead for MLS - I think it would be ideal to firm up its value and capabilities in this area.

Consolidation: A unified industry would be more capable of managing risk.

To encourage consolidation, we could:
  • Develop and mandate core standards for MLS, based on CMLS best practices.
  • Drive recognition of strategic issues driving consolidation BEYOND the local service needs and Overlapping Market Disorder (OMD) - for example, managing risks described in the DANGER report, information security, and legal challenges (without depending on subsidy from the national level). Positioning based on OMD alone was unfortunate because that is only one of the drivers for consolidation.
  • Determine the MLS consolidation end-game (per my earlier blog on the subject). When I speak on the subject or consolidation or am helping MLSs achieve it, I create a map based on consumer-oriented data that allows us to productively discuss the end-game. This market-driven endgame map should drive tactics to achieve consolidation, driving them based on consumer needs and the professional access needed to serve the consumer rather than existing industry structures. Add the other broker and core standards factors and we should have a better picture of the end-game we are aiming for.
  • NAR itself could get the right people from each organization sit down together to work consolidation out. Peer to peer asks have had some effectiveness, but progress is slow. Not everyone comes to MLS conferences like the Council of MLS or the Clareity MLS Executive Workshop to understand why consolidation is so important.
  • Some of the states have, in the past, worked against consolidation - this must be discussed at the national level. Shared services at the state level solve some problems, but are stopping others from being solved.

Front End of Choice

Most MLSs are not ready to unbundle for FEoC: providing a core "pipe" of information and allowing for product choice, including products provided through the MLS organization, through brokerages, and purchased by agents themselves. Though I don't think this is an especially important trend to move forward - other others described above are much more urgent - I don't think this trend is going to go away. If the industry is going to support this trend, potentially incompatible licensing processes and the per-user cost bundles MLSs have created will need to be addressed. A few large MLSs (MRIS, CRMLS, Northstar MLS)  developed the technical infrastructure to support this - and it is not easy! Others have focused on providing FEoC for alternate means of MLS data access while providing a single core MLS system.  Once further data standards are created that are needed to support this type of business, there may be increasing competition for this core infrastructure.

Now, brokers are dealing with a similar issue today, with some deploying suites but many more deploying best of breed products, integrated as best they can without data standards. While many brokers are happier when they create this best of breed solution, but it's expensive and difficult because of that lack of data standards. There's more inertia in the MLS space to stick with the single-vendor suite plus a few integrated products approach due to licensing models, but data standards in the MLS space are more advanced than in the broker space and alternate front ends are starting to emerge - so I expect this is going to happen. Again, "How urgent and important is this?" is a question that needs to be asked when considering this initiative - and the answer is not going to be the same for every MLS.

Other Issues

Every MLS has different issues to address in strategic planning. For example, in the last few plans I have facilitated in 2018, "Front End of Choice" didn't come up at all from subscribers or the leadership, while the other two issues did in one form or another - along with other local issues. Some of those local issues are ones I've seen recently in several organizations and could well be covered in another blog post.

A Review of the Latest Approaches and Best Practices

Clareity is continually looking for best practices and new ideas in strategic planning. We look at case studies of what the great strategic consulting specialists have done; examine what is being read by business leaders in such publications as the Harvard Business Review; survey the academic literature on strategic planning in journals like the Strategic Management Journal; and reflect on current strategic conference proceedings. Out of all these sources, Clareity takes away the most important parts and considers how they can best be applied to our clients in the world of organized real estate.

Strategic planning is a way of trying to anticipate and shape an organization’s future based on what it is like now, and what future conditions are likely to apply. Henry Mintzberg defined the traditional concept of strategic planning as “an analytic process for establishing long-range goals and action plans for an organization; that is, as one of formulation followed by implementation.” Clareity uses two primary strategic planning models to assist its clients in these efforts: 1) Vision- or goals-based strategic planning, and 2) Issues-based strategic planning. Based on the conditions in a particular organization, we will choose which model best fits our client’s needs, or often merge these and other planning models for best effect.

If your organization is small and has not yet developed a plan (most typically one of our technology company clients), “vision-based strategic planning” is probably the best starting point for identifying direction and giving you the tools to achieve your goals. Clareity will work with your leadership to identify your organization’s purpose and craft a clear and concise mission statement (the formulation phase), and then to identify a vision for where you want to be at some future point. On the basis of these components, we will work with you to identify the specific goals needed to achieve these strategies, and the actions you need to take to achieve the goals (the implementation phase), then compile an appropriate strategic plan.

The second model, issues-based strategic planning, is useful primarily for organizations that have a history of attempting to meet particular goals, but have not succeeded, or are facing particular issues that might be better addressed by stepping back to strategically plan a response. In such cases, we work with you to identify the major issues your organization is facing, brainstorm ideas for responding to them, and then craft a strategic plan that will enable you to address them in an organized, purposeful way. One way of thinking about the difference between vision-based and issues-based planning is that the first works from the top down while the second works from the bottom up. Again, sometimes these models must be successfully combined to address our client’s needs.

There are several exercises that are useful to incorporate into some of the planning models. One of the most important of these is the “SWOT Analysis.” The “SW” in “SWOT” stands for “strengths and weaknesses”; you are looking inside the organization to find out what it is doing well and badly, what are its assets, and what are its deficits. Existing resources can be exploited, while missing resources can be developed or acquired. The “OT” in “SWOT” stands for “opportunities and threats”; you are mostly looking outside the organization to find out what lies in store for it, though some threats are internal. Opportunities may include things like new market segments, new technologies that, if taken advantage of, will put the organization in front, and the possibility for a merger, acquisition, or alliance.

It is helpful to remember that MLSs have their own idiosyncrasies and needs, and some planning models don’t work as well for them. For example, “scenario planning” attempts to identify external forces that might affect an organization, develop responses (scenarios) that could provide effective responses to them, and then fold these scenarios into a new strategic plan. Understanding “Black Swans” and other potential disruptors can be a useful exercise – and Clareity can bring that to bear as a part of strategic planning. However, the rate of change in real estate technology is so rapid and disruptive that that the time spent on evolving the most elaborate scenarios to respond to externalities is wasted when those scenarios become obsolete very quickly.

Likewise, organic (or self-organizing) planning, which evolves plans in response to ongoing conversations about shared values, is not well suited to the more linear practices of MLSs and associations. The MLS and association environments are not ones that lend themselves well to endless discussions and debates about abstract concepts, preferring a more action-oriented, proactive approach.

On the horizon, however, the new “real-time planning model” will allow organizations to adapt to conditions on the ground. For example, an organization that already has a strategic plan may identify several current issues, then collect empirical data to accurately explain them, and update their strategic plans as necessary to respond to them, rather than just yearly. If carefully managed, a real-time planning model can enable your organization to keep itself current and relevant by responding more adaptively to changing conditions, while still constraining these responses within a long-term vision. Clareity clients often look to us for ongoing check-ins, presentation of new external emerging issues, and measurement of progress – converting their old-school, once-a-year or even once-every-three-years planning engagements into an ongoing exercise.

With all these models of strategic planning, ongoing implementation is the real challenge. A study of one of the three largest strategic consulting firms in the U.S. revealed that only 10% of its clients fully implemented their strategic plans within the time frame of the plans. Deterrents to implementation included a lack of buy-in by executives and staff, lack of incentive for employees to implement the plan, insufficient communication of the plan and its importance to stakeholders, lack of responsiveness and regrouping when external events outside the vision of the plan occurred, lack of milestones and targets by which implementation could be measured, and lack of accountability of specific employees and executives to make sure the plan got done. Our clients, in the event that they have these types of issues, call on us to help keep their plan on track. Because a consultant isn’t beholden to any particular political constituency, we can make major suggestions, negotiate buy-in across the organization and keep people’s feet to the fire.

Regardless of what method of strategic planning is appropriate for your organization, Clareity can help: whether you are formulating a strategic plan for the first time, modifying an existing one in the light of changed circumstances, or in the middle of your plan’s implementation phase. A strategic plan can make the difference between being in charge of your organization’s destiny and being blindsided by events as they happen. It can also mean the difference between a board of directors that sets direction and trust the staff to execute on that plan versus having a troubled organization where the board feels it must micro-manage to get things done. In today’s increasingly competitive and fast-changing environment, strategic planning is critical – and “making it up as you go along” is not an option.



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This blog is for informational purposes only. The author shall have no liability in connection with any inaccuracies or omissions herein. All trademarks are the property of their respective holders. The views expressed on this blog are those of the author and do not necessarily reflect the views of his employer. Non plaudite, modo pecuniam jacite.