The structure of a commercial real estate business that's built for growth.Oct 11, 2023
A lot of commercial real estate business owners believe that the answer to unlocking more revenue growth is hiring a crew of heavy hitters who can chase more deals.
But what if the answer to faster growth wasn't a team with more top producers?
What if the solution was to build a team that contains the right mix of people?
Introducing the ‘Finders’, the ‘Minders’ and the ‘Grinders’: the key players inside a commercial real estate business that's built for growth.
🔍 'Finders' are your rainmakers, the business developers who bring in new clients, secure listings, and make deals happen.
💼 'Minders' are the client relationship and transaction experts, ensuring client satisfaction and that deals run smoothly.
📊 'Grinders' handle the technical details, from research to paperwork and handling third-parties, keeping things on track in the background.
When 'Finders' focus on the hunt, 'Minders' are on listings at the front, and 'Grinders' spend time on the grunt, you’ll activate more growth in your business.
Everyone’s contribution matters. Learn how to get the balance right in episode 160 of Commercial Real Estate Leadership.
A lot of commercial real estate leaders believe that the answer to unlocking more revenue growth in their business is hiring more heavy hitters, more guns who can get more deals.
But what if the answer wasn't actually to hire more top producers?
What if the answer was actually to hire more people who could support the top producers that you already have?
That is what I'm going to be talking about in today's episode.
Hello, and welcome to episode 160 of the show. This is Commercial Real Estate Leadership. I'm Darren Krakowiak and I help commercial real estate leaders to crank up the growth in their business.
And what I'm going to talk about today is a concept that whenever I introduce it to clients, they love it, they think it's awesome. It's called 'find, mind and grind'.
And it's a concept that I learned in one of the commercial real estate firms that I worked in.
But I actually stumbled across this concept in a book that I started reading recently, which is called 'Managing the professional service firm' by David Maister.
And, look, this is a pretty dry book, it's got a lot of words in it. But it is, I think, full of great models and great ideas about how to structure, a professional services business to grow.
And more of what David talks about is around in particular legal services, so law firms, but I think when it comes to 'find, mind and grind' because I know it's been used in commercial real estate, I wanted to unpack what that looks like.
And really get to the crux of why it's important in terms of the way that we shape teams, in terms of how we serve clients, and also how we remunerate people from a variable compensation perspective inside a commercial real estate business.
So, let's first define who is the 'finder', who is the 'minder', and who is the 'grinder'.
So, first of all, we've got the 'finders'. And I guess this is a business development function.
These are the people who are the rainmakers. These are the people who bring in new clients who work on business development opportunities. And they're the agents and brokers who are out there networking, who are prospecting, and securing listings.
Next up, we have people who are the 'minders'. Now, this is more of a client relationship management role.
And these people nurture and maintain relationships, and they ensure that client satisfaction is at a certain standard and that we're retaining clients. It might be client success in some businesses.
In commercial real estate, these are people who really understand the client's needs, they oversee those transactions, and they ensure smooth communication between all parties.
If you've worked in a big global firm, like I have, you might know, these people as account managers or transaction managers.
And in a property management business, they're kind of like the senior property manager, someone who's there to make sure things are being done right.
And then we've got the 'grinders'. The people who are grinding out doing the technical work.
These are the people who sometimes are an unsung heroes within a commercial real estate business.
They're often known as analysts, sometimes they're researchers or their assistants. And they're handling the paperwork.
They're doing the market analysis; they're ensuring that the ads are online. And they're dealing with buyers and leases and similar tasks like that.
They're making sure that things are actually getting invoice, that the database is being managed.
They're making sure that the photos have been taken, they're following up with lawyers, and all the rest of it.
And I think that the 'grinders' help the finders to do more deals, or at least to find more deals by doing research on leads, before prospecting begins, and they may even create lead lists.
So, all of those tasks that I just went through in terms of the responsibilities of the 'grind' person are things that you should not be letting your top earners do.
Because if your top earners are spending their time, in this space, doing the functions that are associated with the grinders, then you're actually losing money.
Because in many commercial real estate businesses, one of the problems I see is that it's made up of agents and brokers that try to do everything because they don't want to share the fees with anyone or just because the business hasn't invested in the different functions or having an appropriate structure.
So, we've got people who can find but are also minding and also grinding.
And the problem when we have too many 'finders' and not enough 'grinders' is that it can lead to a bottleneck in revenue and profitability.
The 'finders' basically run out of time to create more opportunities because they're spending their time doing lower order less dollar productive tasks of 'minders', and of 'grinders'.
And the problem is not only that, we're losing some of the productive capacity in the business by having people who are capable of doing more working on those lower dollar value tasks.
But also, sometimes 'finders' by the nature of who they are, are not the best people to be doing the 'mining' and the 'grinding'.
They may not have the best attention to detail. And even if they do, the value of their time means it's better for them and for the business, and often for clients to focus on those revenue generating activities.
Another thing that I have noticed is that everyone wants to hire the 'finders'.
That's where everyone is focusing their attention from a recruitment perspective, which means that they are harder to hire.
You may have heard of sign on bonuses, which have been running rapid, not so much in the last few months, but certainly earlier this year. And last year, there was a lot of that going on in the Australian market, probably still is in certain places.
And what that means is that we're going after this smaller pool of talent, when actually we can activate more revenue our business for less by helping our 'finders' do more work by having more 'grinders' in the business.
So 'grinders' can be people that you hire who also have potential.
And in fact, in the book that I mentioned before, by David Maister, he talks about the fact that in law firms, people start grinding, based on the fact that they want to eventually elevate themselves to be a minder and ultimately to be a finder.
So, it's kind of like the way that they move up the hierarchy.
But what I want to say is in that a commercial real estate business, we don't have to make it this ascension strategy.
We can actually have people who are well suited to being in the mind or the grind role, because not everyone is going to be a fighter.
I guess in practical terms, it means that if you've got someone in your business, who isn't so great at finding deals, but is a safe pair of hands when it comes to handling buyers and conducting a thorough process from the point of the listing being one right through to a sale or at least in contract being finalized.
Instead of just saying, "Well, you know what, they can't do enough business development activities. So, we're going to get rid of them."
Instead of doing that, and losing their market knowledge, their relationships that they have with your existing clients, and also their understanding of the way that you do things, you can shift their role or re orientate their role to being that other minder, or a grinder.
Because all three roles are required to provide comprehensive service to our clients.
All three roles are important within a commercial real estate business.
And if you're wondering how we should be renumerating these different functions within a business, the simplest way that I have been shown to do that is just to simply divide by three.
So, 1/3 of the value of the transaction comes from finding, 1/3 of it comes from minding, and 1/3 of it comes from grinding.
And often we find in many commercial real estate businesses that the finders are also the minders.
So maybe they're getting 60 or 70% of the transaction fee, and the grinders are getting 30 to 40% of the transaction fee.
So, what did the you decide to do in terms of tiered commission structures or having bonuses with people in certain roles that maybe aren't on commission, providing also professional development opportunities for people who are in the grind roll but have potential who want to move up the tree is really up to you how you structure your business.
But the point of today's episode is just to point out that you can build a business that isn't just based on finders, that you can grow your revenue not by hiring more of these rainmakers, but also building up your capacity in the business through finding people who can mind and grind the business.
And the final thing I would say on this is, we want to make sure that we are valuing everyone's contribution.
Just because the finders are the people who are generating new business, it doesn't mean that other people aren't extremely important to the overall process.
Everyone has a role to play in ensuring the success of the business.
And it's because of the people who are there to mind and grind the deal, that the finders can focus more of their time and energy on bringing in more revenue.
Before we go, I just wanted to let you know about multiplied growth.
It's available now at cresuccess.co/growth. It's a guide where we discuss the four pillars of business growth in a commercial real estate business.
And we show you exactly how you can unlock one of those four pillars, which is organic growth.
It's all about getting the structure of your business right, so you can activate those different levers and start to see the benefits that some marginal improvements can bring to your overall business performance.
That's where you create the multiplied growth. If you want to grab that resource, go to cresuccess.co/growth to grab it now.
That's our episode for today. Thank you so much for listening and I will speak to you soon.
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