Making decisions with imperfect data
Business is making strategic decisions with imperfect data. Commercial fee appraisers determine market value opinions daily with the data in front of them. In reality, no appraiser gets access to every bit of data that exists. You get to a confident stopping point and make a decision.
Busy vs. Effective
One challenge for commercial appraisers is to maximize their time on the valuation. The reality for many of us is word processing purgatory. Click, click, click. Copy and paste, copy and paste, copy and paste. Delete page break, delete page break, delete page break. You get the idea.
To make it more challenging, appraisers are also juggling various activities all at once – job set up, creation of exhibits, updating neighborhoods, updating market overview, tweaking Covid boilerplate, researching comps, typing up comps, adjusting comps, analyzing rent rolls, reviewing P&Ls, pro forma analysis, yada yada.
Appraisers say: “I’m swamped.”
They really mean: Productivity is not really a priority.
Appraisers say: “We tried software solutions in the past but they didn’t work out.”
They really mean: Internal resistance put the kibosh on adoption.
Appraisers say: “Let’s circle back and look at this 1Q 2021.”
They really mean: Current inefficiencies are not painful enough to consider change.
Quarterly Game Plan
So what’s the plan? It should include at least three projects to move the needle for your appraisal firm. Name the project. Give it a theme. Create a replicable playbook. Identify the people and the resources to get it done. Identify the worst and best results of each of these projects. Identify the success criteria for these various initiatives.
Vector vs. Thrust
Here’s a thought. Let’s say I’m an appraiser working for you and I produce $18,000 per month. Is that my target production forever? Are my goals written down somewhere? What about next quarter? Should I improve and produce $22,000 per month? That’s only about 1.5 more reports per month. That sounds achievable. But if I don’t improve my processes, the only way to get there is higher fees or working more hours (thrust).
What we need is momentum. Spending our time on the valuation. Automate internally or outsource the report setup. Create vision (stated initiatives) that improves the lack of focus with direction (vector). The theme of your appraisal firm might be – let’s get on the same page. What is your team feeling right now?
Halt and catch fire
I still remember being laughed at as an appraiser trainee by veteran appraisers when teaching them spreadsheets. I remember the arms crossed attitude, “we don’t need to know computers.” Today’s version is, “We don’t need to consistently adopt comp management, report writing or appraisal workflow software.” Even at a youthful age I was floored. How can you not see what’s coming? It’s like somebody today talking about using Elwood. You know things are evolving, moving, improving.
Your journey to appraisal productivity, will not be linear. It’s like a lease-up to stabilized occupancy, does not usually occur on a straight-line basis. The point is to start. Work hard to get adoption. Communicate intended results with a timeline deadline.
Put some Wabi-Sabi on it
Wabi-sabi is a Japanese concept of imperfection and impermanence. “Wabi” is defined as beauty found in asymmetrical or unbalanced things. “Sabi” is the beauty of aged things and considers the concept of impermanence. Loosely translated, “Wabi” mean simplicity and “sabi” means beauty.
Looking around your office, do you see the themes of simplicity and beauty? Are our software products perfect? Nope. Are they simple (easy-to-use) Yep. Are they aged? Well Bill Clinton was president when DataComp first came out. That said, our report writing and appraisal workflow applications were developed much more recently. Point is, RealWired has been supporting commercial appraisal software longer than anyone that’s still around.
Business is making strategic decisions with imperfect data. Key is to be “making decisions.” Kicking the can down the road will get you where you are today. But no further. Embrace imperfect data. It’s better than no decision, waiting for perfection.