The COVID-19 pandemic has produced the fourth major market disruption I’ve experienced during my tenure with the REALTOR® organization. While the pandemic differs from previous economic downturns, there are some similarities in the way people and markets respond to extended traumatic events. But many association executives haven’t experienced a serious disruption before, so this is new territory for them.
Fortunately, disruptions are rare, they get resolved, and they are followed by a return to normalcy. But getting through that transition will test you as an AE. You need to be quick, creative, and confident, even though you may not feel that way. You might be your members’ only source of leadership and confidence.
Each of the disruptions I experienced challenged my association. We lost members, revenue, influence, and key volunteer leaders. But there were also opportunities for the association and myself. We actually increased some programs and created new member services. If the current disruption follows the patterns of the past, there will be many familiar themes and opportunities.
Here are several aspects of the down- turns of the past—and lessons for today:
Speed. The speed of change in market conditions—and their impact on the association—was very fast in previous upheavals. As with the stock market, positive change is slow and gradual, but negative change tends to be quick and dramatic. There isn’t a lot of time to make vetted decisions. AEs were pressed to give quick opinions, make judgments, and deflect moves that might be detrimental in the long term. Many used their skills to increase their stature with leadership, market leaders, and members.
Lesson: Think of all the potential scenarios and options now to be prepared.
Attitudes. Member attitudes became very negative during previous disruptions. This was understandable, as a market disruption directly threatens careers, businesses, and ways of life. Negative comments were often misdirected at the association, however, and staff members were inappropriately targeted. The best associations quickly engaged members as a source of information, ideas, and assistance to keep attitudes positive.
Lesson: Focus creatively on solving members’ problems and offer hope for the future.
REALTOR® value. The consumer’s view of value provided by a REALTOR® changed. When perceptions change, everything changes. Identifying new consumer wants and needs became critical to members’ success. It was also vital for associations; the most successful among them aggressively created educational products and opportunities based on new market realities—new tools for a new time. They also dumped programs and services that should have been deleted long ago.
Lesson: Lead with solutions that help members get in sync with new consumer desires.
REALTOR® advocacy. With an understand- ing of consumers’ changed needs, smart associations quickly engaged in promoting newly identified REALTOR® services of high value. There were multiple benefits to this—not only did these associations connect with the changed consumer, but they also improved members’ self-image. It helped many members better connect with new marketplace realities and the association.
Lesson: Be the first and strongest advocate for new member value.
Leadership. The strongest members of the leadership cadre focused nearly all of their time on their real estate firms (as brokers) or their business pipeline (as agents). This created a vacuum for other, less qualified members to fill or prompted the AE to take a stronger leadership role. With less attention from current leadership, some AEs had “shadow” leadership groups to consult. Association culture determined what was acceptable, but in challenging times, bold leadership was even more appreciated and supported.
Lesson: Connect with elected—or unelected—leaders to take bold, supported actions.
Budget cuts. Accompanying the loss of membership were demands to cut the budget. If membership dropped 20%, for example, proposals often sought to cut 20% across the board. If staff compensation and benefits were in one line item, the call was to cut that 20%, too; in some cases, associations cut staff while keeping all programs!
Across-the-board cuts are not a strategic decision, but a fear-based reaction.
Leading associations had program-based budgets, and all costs—including staff compensation— were included in prioritized programs. So, the focus was on which programs continued to have value, not the staff positions that should be eliminated or the salaries that could be cut.
Lesson: Present your budget by program format and priority. Cut the losers and keep or expand the winners.
Reserves. A market disruption clearly qualifies for use of reserves. If associations had adequate reserves, they were prudent in deploying the funds, pruning programs, and advancing valuable services. Some of them delayed dues collection, but they did not lower dues permanently. When you cut dues, you cut value. You know the saying, “Time is money”? Well, the reverse is also true: Money is time. Reserves gave associations the time needed to engage in reasoned debate and make wiser decisions.
Lesson: Deploy reserves strategically, and use the current disruption to validate a strong reserves policy.
Survival mentality. In past disruptions, most members went into survival mode. “Cut everything to keep the business” was the majority opinion, but a few members were more assertive and expanded their business. This added to the market tension among members. Most of the leadership was in the survival camp, and AEs had to diplomatically question the wisdom of those making strategic decisions for the association based on short-term thinking. Like the few prepared members who developed big plans, some associations expanded their market area through mergers during tumultuous times.
Lesson: Use sustained or increased value—not survival—as your mantra.
Community feeling. Despite business downturns and accompanying feelings of anger, fear, and uncertainty, a unifying spirit developed among members. Effective associations reinforced the camaraderie through communications, personal contacts, and encouragement while assisting members with their business challenges. Empathy and assistance were a powerful combination; for many associations, it was their finest hour.
Lesson: Don’t wait for the next crisis. Develop community spirit now to help sustain you during any difficult time.
Plan Now for the Next Disruption
The pandemic will test your skills, especially where innovation and diplomacy are concerned. Like past disruptions, this one has moved quickly, and you must do the same. When the COVID-19 crisis transitions into a new normalcy, be prepared to apply the les- sons learned immediately. Design and build a stronger association now to be ready for the next disruption. It will be here soon enough.