Can Six Sigma help your brokerage?

Real Estate Agent with The Hogan Group at Keller Williams Realty

Chances are if you've taken a business management class in the last 20 years you've atleast heard of Six Sigma. Most people think of implementing Six Sigma in a manufacturing process to decrease the number of defects in a given process. Defects in this sense are any deviation in a process that could lead to customer dissatisfaction. Back in my Fortune 500 days, I was a Black Belt with GE Financial. My job was to implement Six Sigma methodologies in a service environment.

So lets first review the primary assumptions of Six Sigma without going into too much detail and then I'll give some ideas on how to implement these same methodologies in your company.


-Continuous process improvement is imperative to achieve stable and predictable processes. Stable and predictable processes are absolutely vital to a company's long term success.

-Achieving high levels of sustained quality improvement requires that Six Sigma be ingrained into the culture of the organization and be supported fully by top level management

-All process throughout a business can be measured, analyzed, improved and controlled. If you can't measure it you cant improve it.

Six Sigma is much more detailed than these three assertions, one could write an entire thesis on the DMAIC process alone. But these are the basic assertions to get you started thinking in a continious improvement mindset.

How to apply this in the Brokerage Environment:

Your brokerage is made up of hundreds of processes...some small...some very complex. You must first identify your organization's process and determine which of those actually affect your customer. Those processes that directly affect your customer experience are the processes you first want to improve.

Some examples of processes you may want to measure and dashboard(I'll get into the dashboard later) are:

-The Closing Process: The process from contract execution through to the closing. The process might include a checklist for all parties to be contacted, reports to be ordered, Homeowners association packets to be ordered, etc. Your customer is highly affected by any deviations in this process... especially if it results in a missed closing date.  A proper measurement could include # of closing dates made vs. # of closing dates missed.

-Returned Sign Call: Do you have a process in place for insuring sign calls are returned hourly, daily, within 24 hours, etc? Again this is a process that your customers actually "feel". One of the biggest complaints we as REALTORs get- is the lack of returned calls. Fixing and measuring this process will make you stand out from your competition. A proper measurement here would be # of returned call contacts made within your timeframe(1 hour, 24 hrs etc).

-MLS Entries: Whether you know it or not you have a process in place already for entering a seller's information into your MLS. It may not be a defined process but you have a process. How do you think your customers would feel if you sent them their listing already in the MLS within 1 hour of signing the listing agreement. It can be done. A proper measurement here would be length of time in minutes from signing the listing agreement to entering the information in the MLS.

-Commission Payouts: As a brokerage, one of your customers is your agent. How much happier would your agents be if you could reduce your commission payouts from 5 days to 48 hours. Or from 48 hours to 12 hours. A possible measurement here would be # of days from receipt of commission payment from escrow to delivery of commission check to the agent.

We could go on and on about processes. Some processes are easy processes but could have huge impact on your customers. Some process are incredibly complex with several sub-processes.  Think about your organization and how it operates. Each organization is different from others and have varying processes. What works for one organization may or may not work for another. Figure out your customer touchpoints and start with those processes. To get the biggest bang for your time- begin by focusing on the processes that most impact your customers.

In order to continue improving your processes you have to keep watching your measurements. Thats where your dashboard comes in handy. Many of us already use dashboards to measure individual performance... calls made each day, contacts made, calls to sphere of influence made, etc. But you also need an organization wide dashboard to watch your key processes. Watch your 5 or 6 most valuable processes. By looking at your numbers daily- you can easily spot a deviation in the process and can react quickly.

What does a dashboard look like- it can be as easy as a sheet of paper or a spreadsheet with your key process measurements listed. Your process owners(those responsible for the key processes) should be responsible for entering the daily data on a central spreadsheet or database that tracks your numbers. The format doesnt matter- only that you watch your processes.

I've simplified Six Sigma in this article- but it really doesnt need to be difficult. Simple is good. Feel free to contact me with questions.

Posted by

Mike Hogan

Associate Broker

RE/MAX Commonwealth





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