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DIFFERENCE BETWEEN AGENT AND BROKER

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Education & Training with Performance Development Strategies

Every day well deserving individual performers are promoted to supervisor. Are they prepared or have they been set up to fail?  Relating this to real estate being a five star agent does not immediately translate into being a broker.

Many have remembered the book The Peter Principle which postulates that a person continues to get promoted until they get to their level of incompetence. I have had enough experience to know that it does happen. Companies make a flawed assumption that because the employee was a great individual performer in the previous job that he or she will adapt and become a leader of the team. Inevitably, according to the Peter Principle, the person ends up being promoted to a job where they are no longer competent. This is referred to as their "level of incompetence". The employee has no chance of further promotion, thus reaching his or her career's ceiling in an organization.

This is more common people given challenging assignments as they move up the corporate ladder. But not all can be attributed to the level of incompetence. Many failures can be avoided by proper preparation of the candidate for the new assignment. It can be found in the selection and promotion of managers. Consider this example. John is a very highly performing accountant. He meets deadlines and delivers good and accurate reports for management. He is the right-hand person to the accounting manager. One day the accounting manager leaves the company for another job and management decides to promote John to the accounting manager position. Here are two questions.

  • What duties was John paid to do as an accountant?
  • What duties is John now paid to do as accounting manager?

Has John been prepared? If the answer then John is being set up to fail. The skills that John used to perform as an accountant are different than those needed in his new role as manager.

This skill curve below illustrates this point.

skillscurve2

As we can see here, to be effective as an individual performer you must utilize about 90% technical expertise with only 10% people skills.

However, at the next level in the organizational structure, the supervisory level, the curve makes its most dramatic shift, and the necessary knowledge and skills you now need to be effective on the job is about half and half. You still need a great deal of job knowledge—to train, to substitute, etc.; but, now your Number 1 responsibility is developing other people—to develop other high performing workers, to teach, to lead, and to manage.

Then, as you can see from the shift in the upper levels, the higher you go in the corporate ladder, the less you need technical skills, and the more you need good, effective management and human relations skills. At the management levels, more behavioral and management skills are required for your success.

Are you promoting and hoping for success? What do you need to do differently?  For a similar post on our website see THE BIG CHANGE FROM INDIVIDUAL PERFORMER TO SUPERVISOR.

Are you ready to prepare your people for their leadership roles?

Contact us to learn more

Armonk NY call 914-953-4458.

South Florida call 772-342-1066.

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PDStrategies.net

Armonk, NY
Port Saint Lucie, FL

(914) 953-4458
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Grant Schneider,
CBC, SPHR, SHRM-SCP*

*Certified Business Coach,
Senior Professional in Human Resources

President, Founder
& Leadership Coach

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Comments(32)

Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Joan - isn't that for sure.  It is not easy to find and groom a leader.

Aug 29, 2022 06:30 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

The biggest difference that I know of between a broker and an agent is that the broker holds most of the liability which is why I have no desire to be a broker, haha.

Aug 29, 2022 07:57 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Grant,

 Great post!

I read the Peter Principle, and every time I saw an incompetent manager, I remembered this book.  People need to be mentored at most levels to continue to be successful. 

Aug 29, 2022 02:04 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Grant I am a firm believer that being a top producer has very little to do with being able to be a good manager.  A great example of this is sports.  Rarely will you see a Hall of Fame player who also was a good manager.  It is usually those players who are good roll players, who go on to be great managers.

Aug 29, 2022 02:30 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Brian - that is why interpersonal skills are so important.

Sheri - indeed and it is possible the the strategic skills higher up may be over the head of some.

George - yes, you are right.  That is an excellent example.

Aug 30, 2022 03:36 AM
Roy Kelley
Retired - Gaithersburg, MD

Thank you very much, Grant, for sharing your experience and your advice.

Have a productive week.

Aug 30, 2022 04:39 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Roy - thank you very much.  You too.

Aug 30, 2022 06:15 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Grant, I do enjoy grooming Laura to be better and better, and also for her to be an employing broker down the road.

Aug 30, 2022 06:59 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

I have been both and i can tell you the two are not the same and with them comes different challenges. Now I am SOLO Broker/Realtor and I manage myself! Love my Life!

Aug 30, 2022 12:32 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Grant- this is absolutely true. When I was promoted to manage a staffing office, I was not the top producer but consistently at the top. I had no training as a manager, though. Thankfully, Larry, who is an excellent manager, gave me the guidance i needed. 

Aug 30, 2022 05:10 PM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Grant, excellent post.  Have been familiar with the Peter Principal for a long time and marveled at watching it show itself time in and time out.  That would include me on more than one occasion as well.  I like the Skill's Curve Chart.  KISS  Enjoy the weekend ahead.  Mark 

Aug 31, 2022 07:01 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Joan - looks like everything is on the right path.

Diana - so what I meant was there are different challenges, yes.

Kathy - that was fortunate that you had Larry.

Mark - thank you.  Have a great holiday weekend.

Sep 01, 2022 03:49 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent post and points Grant.  To transform from assistant to being in charge, more people skills are necessary.  

Sep 01, 2022 01:57 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good afternoon Grant Schneider 

An excellent post! I definitely believe just because your a top producer does not mean you have the skill set to be a good leader! A leader's #1 repsonsiblity is to delvelop other people to reach their full potentail.

Sep 02, 2022 10:30 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Sep 03, 2022 05:08 PM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
The Grit and Gratitude Agent

The skills curve looks familiar. :) Interesting post given what I heard at a recent conference about so many brokers with over 25 agents not being attentive to their role as broker.

Sep 04, 2022 08:08 AM
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

Years ago when I first started my brokerage, thought I should look for some agents to grow the business.  I quickly realized that most probably most of my time would be spent getting them squared away, rather than do my own transactions.  Now, if I had been willing to take myself out of the sales end and just concentrate on the agents, it would have worked.  But I like to sell!

Sep 04, 2022 10:34 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Grant:

I certainly saw the Peter Principle at work multiple times in my years in Corporate HR. No doubt it happen in every business, including real estate. Not everyone is right for being in a management/broker role.

Jeff

Sep 04, 2022 04:57 PM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

About five years ago the state of Washington made everybody brokers. You could still use Agent but you were classified as a broker. Go figure 🙂

Sep 06, 2022 12:05 PM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Hello Grant Schneider, not everyone can be a leader. Some are just fine where they are. Top Producers don't necessarily make good Brokers and of course, the opposite is true as well. As always, great post!

Sep 07, 2022 08:57 PM