Milton Friedman, an American economist and recipient of the Nobel Prize in Economics, may have said, “The business of business is business,” but it might’ve also been Alfred P Sloan. Notwithstanding this historical asterisk, Mr. Friedman got me thinking about our commercial appraising industry, “The construction of hypotheses is a creative act of inspiration, intuition, invention; its essence is the vision of something new in familiar material.”
Have you done anything recently within your firm that’s inspirational, intuitive or inventive? It’s muscle memory to drive the same roads to the same office and sit in the same chair. We probably get in the habit of looking at our clients in the same way. Not giving it much attention. Same for our productivity. We just open up Word and Excel and start our copy paste journey. Few things wake us up from our keyboard.
What can be inspirational with commercial appraising? Same goes for intuitive or inventive. Many appraisers struggle with the concept of stopping work (tactical) to re-evaluate their business (strategic). No time to pop the efficiency hood. No time to examine your productivity. Mr. Friedman suggests that the strongest argument for free enterprise is that it prevents concentration of power, it forces people to “put up or shut up.” Free enterprise strongly encourages you, “to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.”
In the past, we’ve had a local university business class analyze my appraisal firm as part of a semester assignment. It was uncomfortable to have 21-year-olds point out things in my business that I wasn’t doing and arguably should be doing. Such as: are you actively looking to diversify your client base, what’s your hourly revenue per appraisal and do you have a technology budget?
I bet if you’re reading this, you probably care about the valuation industry and are a very good appraiser. You know how to properly value a property. But the business of business is business. So you can continue to see yourself as a (valuation) artist or as a businessperson. Mr. Friedman suggests that, “The social responsibility of business is to increase profits.” So don’t feel guilty. It benefits you, your family, employees and provides a tax generator for your local economy. All good things.
“One of the great mistakes is to judge policies and programs by their intentions rather than their results.” If you implemented an appraisal productivity software and it didn’t work out, meet with your people and find out why. Was it lack of training? Did it fail due to a halfhearted implementation effort? Or was it killed by someone internally that doesn’t like change?
New inspirational, intuitive or inventive discussion topics for your appraisal firm might include:
- Write down your goals for your firm with timeline due dates.
- Write down who is going to do what and when.
- Evaluate your existing appraisal software products.
- Relying solely on Microsoft Office will put you at a competitive disadvantage.
- Change your mindset to continually invest in your firm’s productivity.
So ask yourself, what is your vision of something new in your appraisal firm? Are you a businessperson or an artist? It’s okay whatever the answer. However, if you’re not currently satisfied with the direction of your firm, you might consider (as you think strategically), the business of business is business.