How do you approach hiring other teams? You can call them vendors, service providers, consulting firms, or agencies. It doesn’t really matter.
There are likely a variety of organizations that provide services to you and your team.
Do you consider the organization’s reputation and history?
It could be a two year old company or it could be a group like Twinings Tea which has a 300 year operating history going back to the 1700’s. Not a bad track record.
We have worked with a general contractor that has been in business since 1890. Not many groups can say they have been in business for over 100 years.
Do you think about how the company is structured?
Whether small teams or massive departments, the organization’s structure will dictate how a company performs. Flat teams with a lot of autonomy and discretion operate differently than large bureaucracies with multiple layers of approvals.
Neither is better than the other… although, we may be partial to fast, flexible and agile teams, that is a story for another day.
Do you consider the quality of the individuals that make up the team?
Teams are made up of people. People who have their own experiences, but also their own drive. People that are hardworking, loyal, curious, polite, and responsive matter much more to us than any accumulation of technical knowledge.
For professionals working in commercial real estate acquisitions, you need to hire lots of people for any one transaction.
As a baseline for any real estate deal, you could be soliciting help for any or all of the following needs:
- Debt
- Equity
- Legal
- Title Commitment
- Survey
- Zoning
- Property Condition Assessments
- Environmental Site Assessments
Regardless of whom you hire, one thing matters – EXECUTION.
Can the team and individual in charge perform when it really counts?
“Think like a man of action, act like a man of thought. ” Henri Bergson, French philosopher
In today’s world of Web3.0, ideas and theories are a dime a dozen.
Despite the internet including over 4.8 billion users, the number of people actually doing the hard work is few and far between.
IS YOUR STRENGTH REALLY A WEAKNESS?
We recently ran across a survey group at an event, and it was music to our ears.
The owners of the company were proud of the 50+ person staff that they maintained “in house.”
They worked across the US and knew how to handle work at scale (ie, portfolio transactions in multiple markets).
The industry itself was feeling constraints of a limited amount of labor and a massive amount of demand. Simple fundamentals of too much to do and not enough people to do the work.
According to the U.S. Bureau of Labor Statistics (BLS), unemployment at the peak in April of 2020 was at 14.7%.
While economists and pundits will tell you that the market has recovered with December 2021 numbers reporting only 3.9% unemployment, we think that is only half the story.
Architects, engineers, contractors, and everyone else in the real estate industry is trying to do MORE work with FEWER people. Let that sink in for a moment.
Total Private, nonfarm payrolls dropped from over 129 million to just over 108 million workers at the height of the pandemic.
21,353,000 jobs were lost from March 2020 to April 2020 in the U.S. private sector.
That is about 355,883 jobs lost everyday in that 60 day period!
Professional and business services in that same 60 day window lost 11.1% of its workforce.
The total jobs decreased from 21,469,000 to 19,082,00 from March to April of 2020.
As of December 2021, the BLS reported 21,434,000 jobs in the professional and business services sector.
He was steadfast, “We have our own crews and field teams. We don’t outsource like the other groups.”
We had recently tried to work with various national firms to help cover several acquisitions across the country.
Time after time, it was a let down. These organizations and groups were unorganized, non-responsive and consistently missing deadlines. They were simply over-worked and under-prepared for the volume of assignments.
We get it. The last 24 months have been challenging for everyone, including us. We are by no means perfect.
But when things get hard, it is critical for teams to over communicate, especially when you are struggling.
It doesn’t seem unreasonable to say, “hey, we know we told you we could be out there Friday, but that’s not possible now. We realize our deadline is next Wednesday. We are rescheduling our work next week to be on site Monday, and pull an all nighter to issue you a draft by the Wednesday deadline.”
How often do you and your team receive updates like that? Rarely, if ever.
This particular group called themselves a leading direct provider.
Their website is sprinkled with buzzwords like:
- Not a coordinator
- Added value
- Nimble
- One point of contact
- Constant Feedback
DIRTY SECRET OF THE TECHNICAL DUE DILIGENCE (TDD) INDUSTRY
There is a well known industry standard of outsourcing staff via a network of 1099 employees, also known as independent contractors in the US.
In turn, service providers become coordinators of networks.
It can be seen as a disadvantage….or advantage depending on whom you ask or how you think about staffing.
Recruiting used to be an HR function. Then it was “outsourced.”
Now according to IBISWorld, the market cap for Employment & Recruiting Agencies is $23.2 billion in 2022. Yes, BILLION.
If you are a loose collection of independent contractors, you might lack the cohesiveness and culture of a team that is used to working through hard problems together.
Independent contractors are just that, independent, which could make them unreliable for a particular assignment if they need to prioritize someone else’s work over your teams.
How good is their training? Usually it is not great. Why?
Some independent contractors are doing everything they can to run their business with no ability to pause, reflect, train and improve.
Making the time and having the best training possible is challenging enough.The irony is that most companies with the resources to provide the best training rarely do.
You know what we are talking about. When companies tell us that their people are the most important asset, we then ask them how much they spend per employee on training…the blank stares or the “I don’t know” tell us all we need to know.
We dare you to ask the next company you hire the same question.
For other groups that have access to talent, managing networks can be a major advantage. Imagine having access to top talent that is on call when you need it. That is what an independent contractor can provide. Sometimes these contractors are individuals. Other times they are collections of people within other organizations.
Regardless, if they are 1099 employees or FTEs (full time employees), they can be 100% capable of great work.
How can you quickly observe all of these at the organization you hired for work?
It’s simple.
What do their actions reflect?
The idea of action has been talked about for centuries.
PROBLEMS. THERE ARE ALWAYS PROBLEMS TO SOLVE.
The first deadline. Missed.
The best part is that we had to call them to check on the status.
The next deadline. Missed.
We followed up the next day. Nothing.
The new rescheduled deadline. Missed.
Then came the kicker.
The day they told us the draft survey would be ready, we got a call from the field team asking for access to the site.
We asked if he was just verifying a few last details or just getting started. “Oh I just received the info for this one yesterday. Today is the start of my fieldwork.”
No one at the firm told us that the previous site visit date had been missed.
No one told us during all the deadline reschedules that the field work had not yet been completed.
We did ask how the field work went, if there were any issues.
But now looking back, we should have asked again. We incorrectly assumed that no answer meant the work was fine. It obviously was not.
FACTA NON VERBA, AND WHY ACTIONS MATTER.
Latin for “Deeds, not words.” For thousands of years, humans have known it is not what you say, but what you do that matters.
When Miyamoto Musahsi wrote, “advance calmly but with strength” he was thinking about one thing – taking action.
When working with individuals and organizations, pay attention to the little things.
Not just what they say, but what they actually do.
Did Ashley call you back when she said she would?
If Peter was supposed to send you a budget on Monday, did he reach out to let you know that he was running late?
Did Chris call you or send you a message to let you know that his site meeting was a success?
KEY TAKEAWAYS
Strengths are relative. They are always changing. Why? Because the world around us is always changing.
Every technical problem is actually a people problem.
Especially when it comes to real estate and construction.
Some problems are easier to solve than others. Most people in high performing organizations have a way of figuring it out, or at least course correcting to mitigate the damage.
Speaking of people, did we say relationships matter?
It’s ok to work with new companies and new people.
But there is something to be said for learning how to work even better with great people.
Three things to sum it all up:
- What can be perceived as a strength is sometimes a weakness
- People are important – but how your people perform is what matters the most
- Relationships matter – “hire for attitude, train for skill” works for vendors, not just employees