If it feels good, maybe you shouldn’t do it.
I’m not making any resolutions for next year, but I do have one serious need. I need to make better business decisions. Too many decisions seem to be obviously correct at the time I make them, but don’t end up that way.
I made great decisions as a child, but most were based on "One potato, two potato, three potato, four, O-U-T out goes he." Whether I was the winner depended on where I was positioned among the competition and if I was the one doing the counting. These two factors still apply today, when you think about it.
But every now and then "The Great Lie" comes along. The lie growing up was, "Sticks and stones will break my bones, but words will never hurt me." Try resolving a buyer’s concern with the wrong response — and see how it hurts to lose a $5,000 commission.
For the last few years The Great Lie about decision-making is, "If it feels good, do it." This has to do less with business decisions than personal ones, but in either case feelings get us all in trouble.
I came to realize, "If it felt good, I probably shouldn’t do it," because it was in many cases just wrong or was not going to end well.
Then, in college, on the way to an economics degree, I learned that the best decisions come from quantified data. Statistics. Those work sometimes, but not in every case.
Some say that wisdom is the key to good decision-making. There is a biblical story: Solomon prayed for wisdom. And because he sought wisdom rather than wealth, he was rewarded with both.
As the stories go, King Solomon became a very rich man and in the process ruined the lives of many of his loved ones. When it came to morals, King Solomon used poor judgment.
Decisions matter. The reasons for them matter even more. I cannot remember a time when homeowners, sellers, buyers and lenders have been asked to make harder financial decisions than the last year or two.
Our decisions are based on what we believe to be true. For example, some of us believe when the real estate market improves we will make more money.
Others believe that since the competition is thinning due to inertia and attrition, this is a good time to build their business.
Both can justify their decision as being the right one, but which agent would you want on your team? Or listing your home? Or negotiating for you with the lender?
Three of the best pieces of advice for decision-making came from good friends, all successful in their own careers. I heeded their advice in all cases.
1. "If you can’t explain the money, they will not trust you."
As one who works exclusively as an onsite broker of record for homebuilders, I heard this years ago and decided that understanding a homebuilder from the financial risk perspective would be more important than learning construction. I can find others to explain the construction side of things.
Learning how to develop Excel spreadsheets became important to me. Developing a marketing plan and sales projections for a lender on a builder’s behalf is something that isn’t expected from a real estate broker.
I expect the loan officers I work with to go beyond qualifying for the highest possible mortgage. Homebuyers do not need to be stretched or sold the most profitable mortgage available.
They need to move into homes they can still afford if something goes wrong, as we all know it will. It’s a way to build trust way beyond rapport and a firm handshake.
2. "Ninety-five percent of the decisions we need to make become obvious if we collect enough facts. The other 5 percent are judgment calls."
Years ago, when my friend told me this, it hit me like a ton of bricks. I needed to get much better at research. I quit guessing at the market. I started insisting on feasibility studies and focus groups to help make marketing decisions.
Case in point: Three homebuilders each built a model home, displayed side by side. Builder B’s model won first place in its price division for the Parade of Homes, but the home types on either side of Builder B’s were outselling that model 5-to-1.
We all had our opinions "why," and they were all wrong. A focus group consisting of homebuyers who had viewed all of the models and purchased a home from Builder A or Builder C helped us discover the reason:
Builder B was thought to be a "cheap" builder. Why? Because the handrail on the stairs to the second floor wobbled a little when the people touched it. It resulted in shoppers looking for other signs of "cheap."
While this was being repaired, an inspection was conducted to surface other issues that might cause the builder to be perceived as "cheap." And there were a couple of revisions to the staging of the home, as well. Sales greatly improved.
3. "Hasten slowly."
This came from a Christian psychiatrist friend of mine, when I asked him about a family issue. He said to continue to address the issue, but thoughtfully. I took it to mean that I should not do something that I would regret. It was a good reminder that served me well.
This is great advice for business decisions, too. Thinking about changing offices? Getting out or into the business? Joining or leaving a team? Hasten slowly.
Most us know that we need to seek advice, listen to it, then make our own decisions. This is where experience comes in, because if we do not know any different, we will tend to trust the first opinion we hear.
Here’s a final thought: Instead of how it feels to you, ask those closest to you how they feel about it. They are, after all, the ones who care about you and/or the results the most.
If they feel good about it, it will greatly improve the odds that you are making the right decision.
What are your thoughts?