Say goodbye to acquisition indigestion, and set your newly merged real estate brokerage up for success.
Key Points:
- Understand the impact the merger has on the people that make up your newly merged real estate brokerage.
- Share your merger’s mission continuously with all stakeholders, including team leads, real estate agents, and staff.
- Make changes easy to implement.
- Empower your real estate team leaders with extra leadership tools and resources.
Growing your real estate brokerage is one of the most exciting parts of being a Real Estate Broker. There is nothing quite like the thrill of seeing your years of hard work grow to new heights with a strategic business move.
Why do real estate brokerage mergers happen?
A real estate brokerage merger happens for multiple reasons. You can be looking to grow your market share, combine resources with another Broker for economies of scale, or obtain the competitive advantage of another brokerage.
Regardless of the type of merger and value proposition, the actual process of combining two organizations into one is challenging. There is due diligence, evaluating culture fit, and legal considerations to iron out as part of the deal.
With all of that going on in the background, it’s all too natural to feel like you are at the finish line once the M&A process is complete. It can take months to years of work to get to that point, and it absolutely deserves to be celebrated!
Unfortunately, this celebratory finish line is the exact moment when your newly merged real estate brokerage is at its most vulnerable state. Failure at this delicate stage is so common it has its own term: acquisition indigestion.
Thankfully, just like you can take an antacid before digging into a spicy meal, you can take steps to position your newly merged brokerage for success.
In this guide, we walk you through the prep you need to do to smoothly transition from multiple brokerages into a single, successful one.
Why do mergers fail?
Clashing work cultures are one of the top reasons that mergers fail. Examples of differing work cultures within a real estate brokerage can include:
- Ways of doing things, like having different systems, workflows, or lead routing practices.
- The kinds of behaviors that are prioritized and rewarded, for instance what’s rewarded more? Hitting your activity targets, or pure sales numbers?
- Different promotion structures: are you promoting based on tenure, sales numbers, or something else? Is that what was done in the merging organization?
- Communication methods and expectations, and more.
As the authors of Merger Mystery point out, another big culprit is the disconnect between decision-makers and the rest of the firm.
You might have merged to increase the number of sales agents working under you, access a better list of prospective clients, or to dominate in your local area’s housing market. Whatever the reason, it is exciting and beneficial to you.
That’s not necessarily the case for everyone else impacted by the decision.
Steering through a smooth transition
1. Have a clear goal, and make it relatable.
Treating the members of your brokerage as important stakeholders sets the stage for a successful transition. You need to clearly communicate the objectives of this change with your team as you would with any other valuable stakeholder.
For example, if you are looking to corner more market share by absorbing a competitor, say this explicitly. Follow up by explaining how you will get more market share, and what benefits there will be for everyone.
This will not be obvious or intuitive to the agents caught in the middle of a major change in their workplace. How you communicate this will have a major impact on how they perceive this change. If people are not confident that they fit into the future you are building, you risk losing the talent you need to fulfill your vision.
Avoid uncertainty.
Share your business case, goals, and vision with everyone frequently, in terms that are relatable to them. When you announce your merger internally, talk about individualized benefits as part of your announcement.
Follow this up by documenting the benefits so your Associate Brokers, Team Leads, Agents, and staff can reference them easily as they digest your announcement. Pay particular attention to personal topics like whether and how real estate commissions will be impacted, if you will be hiring new agents or real estate associates, and how potential conflicts of interest will be handled.
This document helps tamp down speculation by creating a single source of truth about the changes. In the words of NATIONAL, “a vacuum of silence will invariably be filled by speculation and rumor, neither conducive to employee morale nor worker retention.”
Or, as Panera founder Ron Shaich infamously put it, “employees aren’t motivated by the idea of making money for shareholders”.
Every individual in your newly merged firm needs to understand how their position and activities build towards this vision, and how they benefit. Your business objectives won’t be achieved but just mandating them top-down. By leading with the goals and the benefits, you get buy-in from all levels of your organization.
2. Understand the effect the merger has on individuals in your brokerage.
Whatever your business case for this decision was, it has an outsized impact on the day-to-day lives of your team leads, agents, assistants, and staff.
From their perspective, they are now asked to do additional tasks ranging from changing processes, learning new technology, updating marketing, and more.
All of these new things required of them are in addition to their bottom-line sales activities. Sales staff may view this as more than just a nuisance. A transition takes precious time away from their book of business, which ultimately costs them money.
Without an easy transition with clear benefits for them, discontent and searches for a new brokerage can take over.
So keep this in mind from the outset: your business case will not resonate with everyone. It can be too theoretical, or not clearly connected with others’ own career and prosperity.
Including organization-wide benefits in your merger announcement is a great starting point to address this. Follow this up by making any additional work agents have to take on easy. Examples of this include:
- Provide ready to go marketing materials that reflect the changes,
- Provide updated transactional documents, like an updated listing agreement. In Empowr CRM’s brokerage plan, you can easily update these documents organization-wide.
- Have a clear timeline of when technology or process changes will take place, with training dates and resources ready to go, and
- Provide a forum for questions and concerns, and make it easy to access or book a meeting to discuss.
3. Empower your Team Leaders.
While you can make announcements all day long, when it comes to actually implementing changes your real estate Team Leads play a key role.
Team Leads are positioned to get buy-in from every team member by continually reinforcing how the general brokerage mission connects to each person’s goals and motivations in a highly personalized manner.
As Brian Icenhower says in the High Performing Real Estate Team, team members thrive when they have a voice and can collaboratively establish a vision.
In a larger brokerage, this level of individualized attention can only be delivered by your middle managers. During a merger your Team Lead’s job becomes taking their team’s vision, and the activity goals and sales that support it, and tweaking it to fit the new organization’s objectives.
Provide your team leads with the training and resources needed to support others. Set up regular check-ins specifically to address any questions, red flags, or concerns that came up as they steer their teams.
Team Leads that are empowered with the right information and leadership tools are critical for delivering success on the ground.
Final Thoughts
As a real estate leader, approaching this transition time with the same thoroughness as the corporate side of the merger will have a massively positive impact that will be felt for years to come.
This process involves anticipating your team’s needs and concerns and addressing them proactively, clearly, and transparently. Communicate your vision, support team leads, and give your teams the time, tools, and space to rise to the challenge.
