When disruption moves from innovation to Association

The world is abuzz with conversations about disruptive innovation—how the smartphone impacted the computer industry, how Hotwire, Expedia and other sites impacted the travel industry. Clearly, the most obvious example of disruptive innovation in the real estate industry right now is the recent Zillow Trulia merger.

Whether you realize it or not, disruptive innovation has been going on for hundreds of years, so (to a degree) we’ve come to expect it. But, what happens when there is disruption at my local Realtor® association? Will I reap the same benefits that I did when smartphone became a household item?

Local Association Causes Disruption

San Diego County has several Realtor® associations. In order to use our countywide Multiple Listing Service, Realtors® must be a member of one of those associations—the largest of which is San Diego Association of Realtors® (SDAR). I’m a member of North San Diego County Association of Realtors® (NSDCAR).

In the years since I joined the association, there have been at least two member votes as to whether NSDCAR should merge with other associations. Agents at NSDCAR vehemently objected, stating that NSDCAR has a significantly smaller population, members would not receive the personal service, and moreover, the large pool of assets owned by NSDCAR might be used to offset another organization’s debts.

So, NSDCAR continued as an autonomous organization. The association offers free and paid educational opportunities, training, and other membership benefits, including discounts on a number of things. With the help of many Realtor®, affiliate, and associated professional volunteers, NSDCAR schedules weekly marketing sessions at several locations around North San Diego County. The weekly marketing sessions include pitches for the Broker Open Houses (held immediately after the meeting), opportunities to share new listings not on tour and buyer needs, collections for association-endorsed charities, and information about what is going on in the industry.

I’ve been attending these meetings for years. As a Broker, I’ve found that if my agents write offers on properties listed by regular attendees these meetings, we are more likely to get those offers accepted. It’s also a great way to stay in touch with the real estate market. It is also a perfect, easy opportunity to network and create new business connections.

Then, all of a sudden, the disruption begins again—expect this time we are not voting on merger. Monday August 4th, the Board of Directors (without consent of the members) voted to change the format for these weekly marketing sessions. Effective September 1, the only affiliates or associated professionals (also members of the association) who will be permitted to attend the meetings will be those that actually sponsor the meeting (read: pay for food or room rental). According to a recent email from NSDCAR, the goal is to make the sessions “work harder” for our agent members. The email continues, “The singular goal is to devote more time each week to the primary purpose outlined above while offering Affiliates and Associated Professionals who sponsor those sessions more exclusivity and closer contact with REALTOR® members attending.” Notably, those Realtor® partners would not be permitted to attend the Broker Open Houses after the marketing session, either.

As of July 31, 2014, NSDCAR had 4862 Realtor® members, 276 Associated Professionals, and 138 Affiliates. While the non-Realtor® members are not an overwhelming bunch, they comprise a large portion of the members of the meeting, contribute significantly to our charities on a weekly basis, and rely on those meetings to network with their clients (the Realtors®). In the state of California, for example, those individuals who sell title insurance have significant legal limitations as to what they can pay for, and they are not permitted to contribute finances to sponsor value events. Since that change five years ago, the marketing session has been their lifeblood.

When Disruption Hits Home

In order to be an effective real estate professional, I need to leave my drama at the door. That is, I cannot waste my time focusing on activities that disrupt my ability to grow my business or the businesses of agents at my office. One of the key ways that I build my business is through relationships—not only with agents and brokers but also with affiliates and associated professionals. By shutting those people out and bringing this drama front and center, the association seems to be disrupting our industry and taking me away from the activities that I want to do each day.

Consider the impact of disruptive innovation. The smartphone changed the course of communication and significantly impacted landline usage. Online travel sites managed to reduce the number of working travel agents. But what about at my Realtor® association? How will this association disruption impact me?

It is an interesting dilemma: While disruptive innovation may lead to the downfall of the incumbent (as they did in my examples above), how does this play out in the association? Will it be the downfall of their Realtor® members, affiliates, and associated professionals? Or are they only disrupting themselves?