Remember the Arab Spring eight years ago? Democracy was going to take over from the ruthless dictators who ruled the Arab world. Or recall neoconservative Paul Wolfowitz’s pollyannaish plan to democratize the Middle East, after the 2003 Iraq invasion?
Lessons? It was more complicated than that. And in many ways, that part of the world is now worse off.
Not to overdramatize the situation, but the National Association of Realtors’ (NAR) new leadership’s mission to transform the sprawling trade group is similar. Their goals are admirable, like more transparency in an organization that often behaved like a secret society.
The new NAR leadership is promising to put more focus on its members — working Realtors — by wrestling control from the local MLS, shutting down worthless committees, reforming association fiefdoms, jump-starting innovation, putting an end to free-wheeling spending and overhauling its governance structure.
Last August in Chicago, new NAR CEO Bob Goldberg laid out this vision in an entertaining ode to rocker Bruce Springsteen, as he rattled off promise after promise. Nearly nine months later, have his songs risen to the top of the charts? He has some wins but some high profile stumbles as well.
Springsteen once sang, “Blind faith in your leaders, or blind faith in anything, will get you killed.”
NAR insiders get the bennies
In fairness, rooting against Goldberg is hard. He seems to want change at NAR. But it is super difficult, starting with its knavish organizational structure, where the insiders benefit more than the rank-and-file members. And his transition to CEO has been rockier than a 20-foot sailboat in a Category 4 South Florida hurricane.
The former autocratic CEO Dale Stinton — often dubbed a bully — is no longer controlling the organization from top to bottom, but his tough guy culture survives.
The industry’s campaign to raise member dues is a troubling example of its arrogance. Members have complained about the proposed $30 annual dues increase that is to be decided at next week’s Midyear conference in D.C., but the NAR insiders pounced on the resistors as disloyal and even resorted to name calling — a common characteristic of the old guard at NAR and dictators who dispatch their goons to undermine the rebels.
I am not even a member of NAR but was called “unethical” for publishing a survey on the dues hike, dubbed a conspiracy theorist for asking questions about NAR’s windfall from its DocuSign stock and compared to celebrity news service TMZ for publishing stories on the dues increase.
I have been called much worse, and the issues do not affect me. But why pounce on anxious dues-paying members who raise concerns, who are in the dark about the inner workings of NAR, because they’re too busy making a living? It also undermines the work of so many well-intentioned and selfless volunteer leaders who love their trade group and stand up for it, in good weather and bad.
Changing the culture is dicey
Once a soldier under General Stinton, Goldberg is trying to change that vapid culture. But he is finding it hard to rein in his troops, to make decisions by consensus and to become more transparent.
NAR has some skeletons and issues that are becoming difficult to cover up, such as money-losing initiatives that drain the associations coffers but benefit a few stakeholders. Just look at the big broker-owners and other insiders who made tidy sums off Homestore (realtor.com) stock back in the day. Some of them overlap with folks behind wrong-headed initiatives like Upstream, which NAR is subsidizing to the tune of millions.
NAR persists in keeping a cloak on what really goes on by creating profit-making companies where decision-making is opaque.
The pattern is defended as the right way to do business as a non-profit organization. Really? Non-profits are required to file the Internal Revenue Service Form 990 annually, which gives the public a window into their financial operations. It was those forms that gave Inman information on a very well-read NAR executive compensation story that won a journalism award in 2016. However, private companies, like those formed by NAR, have no obligation to do public reporting, and, therefore, it can keep their business activities secretive.
Another problem are the insiders who sit on NAR committees and serve as local, state or national association officers, who get free trips and are wined and dined and then expected to stick to a script and vote for management initiatives without complaining. Insiders deny this is an issue, but they may be too close to the problem to recognize they’re the problem.
Logogate symbolic of member alienation
The loony new NAR logo debacle is an example of missteps that have plagued Goldberg’s good intentions. Not core to changing NAR, the design was poorly communicated and quickly had to be scuttled when its members freaked out.
Good design or not, it became a symbol of how NAR was out of step with its members.
Next came NAR’s proposal to hike dues by $30 a year. It may seem innocuous, and, indeed, hard-working NAR staffers went to great lengths to explain it.
But it was, “out of touch, poorly timed, not needed and with little regard to the cost to the members,” said one disappointed high-ranking real estate executive. “Unfortunately the focus is now on dues but it is eking away at NAR’s credibility, and that is the most critical capital in the NAR treasury and, they are spending it too casually, even recklessly.”
In a recent discussion on the dues hike on an Inman Facebook page, NAR insiders used what one observer dubbed a “how dare you” tone to put down critics. That is the old and tired NAR culture that Goldberg inherited. Rather than challenge one’s opinion, question their integrity.
Time to kill the dues hike
My advice from the cheap seats: Goldberg should reboot his reform movement. Slow down and carefully review his overall strategy and craft a plan to execute, test some things and do what works.
And here is my tough love: show courage and good faith with your rank-and-file members, and ditch the dues hike. Increasing dues may be the right thing to do, but you have done a sloppy job of communicating the benefits.
In the old world of NAR, getting board approval would be rigged and hailed as a win. Today, at best, it will be a hollow victory and come back to haunt the NAR leadership and further erode its credibility. Something is afoot out there in real estate land, and they had better take notice before it is too late.