Making the donuts

“In the new world of sales, being able to ask the right questions is more valuable than producing the right answers. Unfortunately, our schools often have the opposite emphasis. They teach us how to answer, but not how to ask.” Daniel H. Pink, author of The Surprising Truth About Persuading nails it. Commercial appraisers are stuck in the answer, which in our world, is the final market value conclusion. Lots of work just to conclude to a one inch space, “$4.5 million” for example.

There’s so much more

Any sentences in quotes come from Mr. Pink (not married to the singer). “Extraverts often stumble over themselves. They can talk too much and listen too little, which dulls their understanding of others’ perspectives.” The majority of commercial appraisers are arguably introverts, which should result in us not stumbling over ourselves, talking too much or listening too little. But is that really true?

Dunkin’ Donuts had a 1980s ad campaign where the donut maker would say, “Time to make the donuts.” The ad emphasized the consistent precision it took to make the donuts. Day in and day out, regardless of the weather or the time, day or night. Making the donuts always in the same way. Strikingly it sounds like how our appraisal product is made. “Time to make the appraisal.” Trudging forward. Same recipe. Same donuts. Muted enthusiasm.

Donut Doughnut Tomayto Tomahto

“Nineteen centuries ago, the Greek Stoic philosopher Epictetus said, “Nature hath given men one tongue but two ears, that we may hear from others twice as much as we speak.”

Listen to what? If we listened to our clients, we might hear new things. We might hear that they want evaluations. If bank work represents 30% to 40% of your revenue, as it does for many fee appraisers, you need to listen to what they need. Many of your clients want evals, but a low percentage of appraisers are willing to do them.

If you got the right donut equipment (comp database, report writing and appraisal workflow software), evals (if done with best practices) will result in your highest per hour appraisal product. Some of your clients may want non-USPAP evals. This opportunity may come from the lending side depending on bank policy. It may involve you hiring non-appraisers to do the work. Reach out to Deb Clark, MAI at Eval.com if interested. It’s an example of a new (donut) business offering.

Opportunity is about to knock

“In those situations, the ability to move others hinges less on problem solving than on problem finding.” This is critical to the success of commercial appraisal firms moving forward. The dynamics of our industry are pretty much the same as 30 years ago. You have about 80% of the appraisal firms less than 10 people, 20% regional and national players.

If you haven’t noticed, consolidation has already begun. Appraisers being poached by national firms is another trend. The recent increase in appraisal fees is partly due to the slowing down of the not-really-ready-to-retire segment. The opportunity is presenting itself very quickly. Expect a knock on your business door soon.

Kick the can

I think many appraisal firm owners are in a funny spot right now. Many feel they have a five to ten year window before they’re done. Backfilling with younger talent continues to be anemic. Between August 2020 to December 2020, 60 new MAIs were designated, or 145 annualized. Not many for an entire country. The choice is to build value or just close the doors.

Time to make new donuts

The top 10 skills in 2020 per the CPA Journal includes what good appraisers mostly already have:

  1. Complex problem-solving (check)
  2. Critical thinking (check)
  3. Creativity (need to work on that one)
  4. People management (that one too)
  5. Coordinating with others (okay we have some work to do)
  6. Emotional intelligence (mixed bag)
  7. Judgment and decision-making (definitely nail this one)
  8. Service orientation (sort of)
  9. Negotiation (kind of)
  10. Cognitive flexibility (hmmm?)

As we fast approach 2021, you can view the new year the same as any other year. Just making the donuts. However, if you find yourself energized, you might consider making new donuts. Get excited about creating your appraisal product. Service your clients in new and fun ways. Revamp your format. Reposition your value prop. Train your people to understand the direction you want to take your firm.

Immortality consists largely of boredom

“Greatness and nearsightedness are incompatible. Meaningful achievement depends on lifting one’s sights and pushing toward the horizon. When the reward is the activity itself – deepening learning, delighting customers, doing one’s best–there are no shortcuts. One source of frustration in the workplace is the frequent mismatch between what people must do and what people can do. When what they must do exceeds their capabilities, the result is anxiety. When what they must do falls short of their capabilities, the result is boredom. But when the match is just right, the results can be glorious. This is the essence of flow.”

Make some new donuts.