How to use the Function Funnel to increase commercial real estate efficiency.

CRE Success Principle: If you’re earning $200,000 a year, your effective hourly rate is $100 an hour. Every task that you do that could be done just as well by someone earning $10 or $20 an hour is costing you money and slowing down your growth.

In commercial real estate, being busy does not always mean being productive.

Many principals and high performers spend far too much time on tasks that could be eliminated, automated, outsourced, or delegated to someone else.

That’s why I recommend my clients and members use a tool called the Function Funnel.

Why the Function Funnel Matters

The Function Funnel is designed to help you focus only on what truly drives growth and is a productive use of your time.

When you put every task in your business through this filter, you stop asking, “How do I get it all done?” and start asking, “Should I even be doing this?”

The Five Stages of the Function Funnel

1. Eliminate – Remove tasks that add no value.
2. Automate – Use systems and software for repetitive workflows.
3. Outsource – Hand over tasks to specialists who can do them better and at lower cost.
4. Delegate – Give responsibilities to team members who can take ownership.
5. Do It Better – Continuously improve what remains as your responsibility.

Elevating Your Role

By applying this framework, you reduce wasted effort, lower your cost per task, and create more capacity for high-value activities. You also empower your team by giving them meaningful responsibilities, which elevates their roles too.

If you want to stop being bogged down in low-value work and start leading at a higher level, join me for episode 235 of Commercial Real Estate Leadership.

Episode transcript:

Let me guess. You are busy. You are doing a lot of stuff. You are not lazy.

But are you perhaps doing too many low-value tasks?

Maybe if you stop doing some of these tasks, you could be operating at a higher level.

Today I want to help you elevate your role and increase your value by using a tool called the Function Funnel.

Now, this is something that I have presented in a number of keynote presentations and also worked through with my private clients. It is always really well received, and I think it is going to provide a lot of value to you.

This is episode 235 of Commercial Real Estate Leadership. My name is Darren Krakowiak. I help commercial real estate principals to lead their people to better performance, to grow revenue in their businesses faster, and also to have less stress in their lives.

In today’s episode, I want to acknowledge that I know you are a hard worker; you are not lazy. But it may be possible that you are doing some of the wrong type of work—work that either does not need to be done or does not need to be done specifically by you.

When our calendar, when our day, is filled with these types of tasks, it lowers our capacity. It reduces our income, and it keeps us stuck in low-value roles, which often are not very fulfilling and are not the reason why you came into commercial real estate to be doing.

So, what we want to do is ask ourselves this question: not “How can I get all of my work done?” but rather, “Should I be doing this at all?”

The way that you can answer that question is by putting all of the tasks and functions that you are performing—and that are being performed inside your team or business—through the Function Funnel.

So, I want you to imagine that there is a funnel with a wide top and a narrow bottom. What we are going to do is put tasks through this funnel, and we are going to look for ways to eliminate waste, to embrace efficiency, and also to elevate your role and the roles of everyone that you work with.

So, let us start at the top of the funnel.

The first stage of the funnel is eliminate. Can we eliminate this task? There are going to be certain things that you could eliminate, and it is not going to have a negative impact on the business’s ability to grow. It is also not going to have a negative impact on the quality of service we are providing to clients.

If something fits that criteria, then we should just stop doing it. It is the perfect candidate for elimination. The more things that we can eliminate, the more capacity that we create in the business.

A simple example of this would be collecting fax numbers. If you are still asking people for their fax numbers, that is something that you can stop doing.

Probably advertising in newspapers—in most cases. I know there is still advertising on Saturdays, but in many cases, we just do not advertise in newspapers anymore.

One thing that I have been looking at in my business recently is what marketing activities I am doing that are not producing any results. I am working with a marketing consultant to identify, to analyze, to look at the numbers, and to say, “Hey, this is not really producing results. This is something that you should stop doing.”

That is the first stage of the funnel: eliminate. Can we eliminate that functional task?

Now, if we cannot eliminate it, the next question that we need to ask is: can we automate it?

Can we use technology or software to take care of this particular task? Often these are things that are repetitive—things like following up on arrears. Initially, this can be handled automatically by text message or by automated email.

Lease event reminders are given to us through automation. We do not review every lease every single day; we rely on the systems that we have to send us a notification when certain lease events are coming up.

Vendor reports can be automated, particularly if we have an up-to-date CRM system.

Increasingly, I am seeing the ability to automate inbound calls. The triage of inbound calls can be automated, either through people self-selecting whom they want to speak to, or by having an AI voice bot answer the call, understand the keywords that someone is saying, and then put them through to the right person. Parts of your reception can actually be automated.

If we cannot eliminate or automate something, the next question that we need to ask ourselves is: can we outsource it?

Can we hand it over to someone outside the business who can do it to a higher standard than we could internally, and also at a lower cost?

If that is true, then we should stop doing it and outsource it.

A few examples I typically offer when people are looking for ways to outsource certain tasks: well, you have likely already outsourced event catering.

If you are having a morning tea, you do not come in at 4 a.m. and start baking croissants; you go to the bakery, buy the croissants, and then bring them to the office. That is an outsourced function.

We outsource maintenance. We also outsource professional photography.

All of the things that we do not need to have in-house, that can be performed better and at a lower cost by somebody else, are things that we can outsource.

Now, you might say, “Well, hang on. It is more expensive for us to get a professional photographer to take photos for campaigns than it is if I just use my iPhone.” But the quality is not the same.

If we want to have the required quality, it would be more efficient to outsource it to a professional photographer or a videographer—nowadays, for many campaigns—rather than hire a photographer or videographer in-house.

Next, we say, “Well, we cannot eliminate something, we cannot automate it, we cannot outsource it.”

The next thing is: can I delegate it?

Can I give it to someone who is working with me, who has the capacity to do more, and has a lower cost to the business than the person currently doing it?

That could be a junior team member, it could even be a senior team member if the person currently doing it is the principal, or it could even be a virtual assistant or remote professional.

There are so many opportunities to start delegating work: inputting data, cleansing data, scheduling appointments, uploading to online portals. These are all things I know a lot of agents hang on to—or are just not doing at all.

If you are not doing it at all but you know it should be done, it is something that could be delegated. And if it is something that you are doing, but it is not the best and highest use of your time, then perhaps it is something you should delegate.

Before I go on to the last step of the Function Funnel, I just want to point out that you do have an effective hourly rate. We have talked about it on the show many times.

It is the rule of 2,000 hours. Take your overall income over 12 months and divide it by 2,000 hours, and then you will get an idea of what your hourly rate is.

So, if you make $200,000 in a year, divided by 2,000, that is $100 an hour.

If you are spending your time on $10, $20, $30-an-hour tasks, then you are actually detracting from your ability to earn more. Rather than operating at your effective hourly rate of $100 an hour, you are operating at an hourly rate of $20 or $30 an hour because you could easily get someone else to do that task for that cost.

If we cannot eliminate, automate, outsource, or delegate something, then it falls to the person who is currently doing it.

But rather than just say, “We do it,” I say, “Do it better.”

Look for continuous improvement.

That will not be too hard to find because if you have gone through the Function Funnel and taken some responsibilities off your shoulders, then you are likely to gain efficiency. You will be operating more within your zone of genius, doing less task switching, and avoiding cognitive switching penalties.

That means you are going to be less distracted and more focused on doing the things that are your highest and best use.

If you also want to be intentional about making what you are doing even more efficient, you can create SOPs—standard operating procedures—and make sure you are mastering the things that are actually within your remit.

So, why does this matter?

When you put certain tasks, activities, and functions through the Function Funnel, it allows everyone to work at their highest and best use.

It lowers the cost per function or per task to the business, which increases profitability.

It also improves client service because, rather than being distracted by lower-order tasks, you are focused on things that add the most value to clients.

Everyone’s role is elevated, too, because if you delegate a task to somebody else, they have now taken on more responsibility. Their role has been elevated, and the person delegating can now focus more on strategic initiatives and revenue-generating work.

So, how do you get started on this?

The best thing you can do if you want to start considering tasks to put through the Function Funnel is to look for the lowest-hanging fruit.

That is going to be tasks that are repetitive, that you are spending a lot of time on, and that are time-consuming in and of themselves.

If you want to get started with this, here is one way to do it: think of something that you do not enjoy doing, that is repetitive, that can be made into a process, and that takes up a lot of your time. Where does it fall within the Function Funnel? Is it something that could be automated, or perhaps something that you can delegate?

If you are really stuck on where to get started, I have even created an AI prompt for you to help you identify certain tasks.

The prompt is:

“You are an efficiency expert. I am a commercial real estate agent based in Melbourne, Australia. I am looking to create more efficiency in my day-to-day work. I want you to help me find opportunities to eliminate certain processes, automate particular workflows, outsource certain functions, delegate tasks that are below my pay grade, and find more efficient ways to do the work that is within my zone of genius, but I am not sure where to get started. Please prepare a list to help me make progress in each of those areas.”

If you were not furiously writing down that prompt as I said it, I am going to put it in the show notes.

If you are watching this on YouTube, it is in the show notes. If you are listening on a podcast, it is in the show notes.

Easy as that. Copy and paste the prompt, put it into ChatGPT or your preferred AI tool, and see what it says. The more you have been using that tool, the more context it has about you, and the more relevant answers you are going to get.

I would love to know if there is just one thing that, as a result of putting that prompt into your preferred AI program, you have eliminated, automated, outsourced, or delegated.

DM me on LinkedIn and let me know. I would love to hear from you on where you have found some efficiency for yourself.

That is our episode for today. Thank you so much for listening, and I will speak to you soon.