When your best people are doing work someone else could handle.

CRE Success Principle: If a task or client relationship depends on you, document the standard, define ownership and create a way for someone else to deliver it consistently.

The client who always wants the principal

A client who insists on dealing with the principal can create an incorrect assumption: that the relationship cannot be handed over.

But the client probably isn’t attached to the principal. They may simply be attached to a standard that the principal has consistently delivered.

If nobody else has been given the process, training and responsibility to deliver that same standard, the client has little reason to trust anyone else.

A process needs to exist outside someone's head

A process is not just a description of what usually happens. It needs to be specific enough that another person can reasonably follow it.

That might mean an SOP, checklist, screen recording or workflow in your project management software. The format matters less than the clarity it provides.

There is a second requirement: people need to follow it. A documented process that is routinely ignored does not create consistency.

Structure changes as the agency grows

Sales & leasing and property management have different rhythms, skills and client relationships. They should operate as distinct functions.

Once an agency reaches roughly seven or eight people, the principal may also need another people manager, particularly within the largest department. The objective is to stop every issue flowing directly back to the principal.

Every role needs an owner

Each position should have clearly defined responsibilities and a way to measure performance.

Without that clarity, accountability becomes difficult because nobody is certain where one person's responsibility ends and another's begins.

An organisation chart can make this visible. Map the roles, assign responsibilities and identify the gaps.

Put expensive time on valuable work

The rule of 2,000 hours provides a useful way to think about this. Higher-paid people should not routinely spend significant amounts of time on tasks that someone with a lower cost base could handle.

This is not a once-a-year exercise. Every recurring low-value task handled by a high performer is worth examining.

The result is a business where people spend more of their time doing work that matches their capability and value.

If these issues sound familiar, listen to episode 288 of Commercial Real Estate Leadership for more information on how and who your commercial real estate agency should be structured around

Episode transcript:

A principal told me once that he couldn't hand off a particular client relationship because that client specifically wanted him.

Only him, nobody else would do.

I asked him, "Well, how do you know that?"

And he told me it was obvious. The client always asked for him by name, always wanted him on all the calls, always seemed happiest when he was personally involved.

Now, what this principal hadn't considered was ‘why’. Not because the client had some unique attachment to him as a person, but because every previous interaction that client had with the business had gone through him and had gone well.

The client wasn't attached to him specifically. The client was attached to a standard, and that principal was the only one who'd ever delivered it.

That distinction is an important part of what we're covering in today's episode.

This is episode 288 of Commercial Real Estate Leadership. My name is Darren Krakowiak. I help commercial real estate principals to build an agency that can run without them, so they have the choice to work on or off the tools.

And just like the past four episodes, the first two of those four were on pipeline and the second two were on people, process turned out to be a topic that fits into more than one episode.

I think it's going to take two episodes for us to get through it. So today we're going to get into ‘how’ and ‘who’.

That is how tasks actually get done in your business and who is doing them.

And then in our next episode, we'll talk about how efficiently these tasks are being completed, and specifically we're going to get into how AI is really changing what is possible.

So, let's start with ‘how’ tasks get done. And there are two parts to this, and you really do need both parts.

The first part is to make sure that things are documented. We've got to have them written down in a way that someone other than the person who is currently doing the task could reasonably follow.

We don't want vague descriptions. We want actual step-by-step accounts of how this specific thing gets done in your business.

If the only place a process exists is inside someone's head, then you don't have a process, you have a person, and you've got a business that is dependent on that person with all that retained knowledge.

So, we want things to be documented.

The second thing is we want them to be followed. This is the part that most principals underestimate because a documented process that nobody follows is pretty much worthless.

In fact, it might actually be worse than worthless because it creates the illusion that you've actually got some consistency when actually you don't.

Because if you've got an SOP, it needs to be followed consistently every time by everyone who is doing that task.

That is how you uphold a standard. That's how you can make and keep promises to clients about what they'll experience when they work with you and people inside your business.

And the reason why this really matters is beyond just being tidy and organized.

When your team follows a documented process consistently, that's where the real leverage comes from for you as a business owner, as a commercial real estate principal.

Because here's a belief that I think keeps a lot of principals from delegating in the first place.

It's the belief that their clients expect them personally to be doing and delivering the work.

Now, that's usually not quite right. Clients expect the standard that they've become accustomed to, not necessarily delivery by one specific person.

If your team can consistently deliver to that same standard because there's a documented process that they're actually following, then the client's experience doesn't change, even if you're not the one who's doing the work.

Now, on the practical side, some of my clients use software like monday.com, which can trigger automations once certain tasks are completed.

Others just use a simple checklist. You can document processes through videos, through screen records.

Whatever you do is absolutely fine. The tool that you use and the way that you document things doesn't matter nearly as much as the discipline, and that's making sure that your processes are documented and that they are followed.

So now let's talk about ‘who’. That is, the overall sort of shape of the team.

And we'll start with the departments that exist in most commercial real estate businesses. We've got sales and leasing, and we've got property management.

And they are different functions with different rhythms, different skills, different types of people sometimes, and different client relationships.

So, they should be structured as separate functions, even within small agencies.

We don't want to blur them together under one generic team where everyone does a bit of everything. I think most commercial real estate principals have already got that in place, but I thought it was worth mentioning.

There is a specific point in your growth journey where the structure needs to change again, though. And this is once your business gets to roughly seven or eight people.

I think at that point, it's worth having at least one person within your largest department who can act as a manager, someone who can handle the day-to-day people management for, not everyone in the team, but just some people who are at a lower level to them, so that not everything is still running through you directly.

Now, if you're still below that kind of seven or eight number, you can usually manage everyone yourself reasonably well.

But once you get above it, you probably can't manage that number of people very well. And trying to do that anyway is the kind of bottleneck that we've talked about elsewhere in this podcast.

Now, structure alone isn't enough. Every position in your business needs a clearly defined role.

What is it that this person owns, and what is it that they're responsible for?

And we want a way to measure their performance against that standard.

Without this, accountability is really, really hard. Not because people are avoiding it on purpose or hiding from you, it's just that it's really unclear who owns ‘what’ if we don't actually know what the role entails.

When something falls through the cracks, everyone can reasonably say it wasn't theirs because nobody has actually had their role specifically defined.

So, we want clear roles and responsibilities paired with performance metrics for every position. That's what turns a group of people into an accountable team.

It's not really very complicated. It's just something that most agencies never sit down properly and do.

And one way that you can really track if everything is covered is to map out your organization chart and then assign responsibilities to the roles that exist on that chart.

And then we've got a clear idea about who is responsible for ‘what’.

So, if you've been listening to this podcast for a while, you'll know this next item.

It is the rule of 2,000 hours. We covered it most recently in episode 271. It's just making the point that your time has a value because there's 2,000 work hours roughly in a year.

So annual salary divided by 2,000 is roughly someone's effective hourly rate, and it means that every hour that's spent on a task that is below someone's effective hourly rate is actually a bit of a cost to the business.

There's an inefficiency there. It's also not a great result for that individual because they could be spending time on more productive things, particularly if they're a commissioned agent, which would making them and the business more money.

Now, here's how it applies directly to structure and to who does ‘what’.

I want you to be always looking for ways to elevate your highest performers. The people who are capable of producing significant revenue, and this might include you as well.

We want to get them out of low dollar productive tasks, and we want them to be doing work that is generating revenue, and we want to be moving those lower dollar productive tasks to people with a much lower cost base to the business.

And this is not just a one-off exercise; it's an ongoing discipline.

Every time that you notice a high performer spending a decent chunk of their time on something that doesn't require their specific skill or their relationships, that's a structural opportunity for your business, and it's something that's worth fixing.

The businesses that do this consistently get to a place where everyone in that business is using their time in a way that's closely matched with their actual value.

Most agencies, of course, never do it, or they don't do it deliberately, and they end up with expensive people doing cheap work by default.

So that's ‘how’ and ‘who’.

We want documented and followed processes so your team can deliver the standard that your clients have come to expect.

We want sales and leasing separated from property management with a manager in your largest department once you're past seven or eight people working in your business.

We want clear roles and responsibilities and performance metrics for each role, and a constant discipline of matching people's time to their actual value.

In our next episode, we're going to talk about how efficiently things can be done, and specifically we're going to look at where AI is truly changing what's possible in a commercial real estate agency.

It's not just a buzzword. I'm going to give you some real specific examples of what my clients are doing right now.

If there is a process in your business that only exists maybe in one of your team members' heads or in your own head, that's worth doing something about this week.

And if you'd like to talk through how you can structure your team properly, just find me on LinkedIn. My name is Darren Krakowiak. You can see it in the show notes. There's only one of me. And send me a message and I will get back to you.

I hope you're enjoying this special series that we're bringing you, talking about pipeline, people, and process.

We are making our way closely towards the finishing line, but we've got a little bit more to give you next week.

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