When "free" has a cost

By definition, "Volunteer Leadership" is a process by which leaders of an organization are selected from a pool of candidates willing to offer their time to an organization at no cost.

 Volunteerism is a proud tradition that has served to forward the noble goals of non-profit organizations like the Boy/Girl Scouts of America, sports clubs, country clubs, enthusiast clubs, and charitable organizations, to name a few.  Part of the fabric of the American experience, the volunteer leader serves a very real need within a community by providing time, a willing set of hands, enthusiasm, and benign direction for an organization that either cannot pay for, or chooses not to spend their money on, professional leadership.

In organized real estate, this volunteer leadership structure has served the membership Associations of Realtors well by providing a dependable stream of volunteers with skills commensurate to the duties expected of a non-profit membership association.  There was the oversight of administrative staff, usually the creation and chairing of a charitable effort, and the planning of the annual installation and/or holiday party event.  Nothing more was expected because, like the local country club or youth organization, nothing more was needed to run a local membership association.  

When the Multiple Listing Service developed, it happened under the umbrella of the membership organization of the local Association of REALTORS.  It made perfect sense, because until NAR changed the rules, ONLY brokers were REALTORS (which meant that only brokers decided the business practices, bylaws, policies, etc., of the local, state, and National Association of Realtors) and they were already loosely cooperating through their membership in the Realtor Association.  As a result, the MLS was developed under the Realtor Association governance and ownership as a direct privilege of membership. 

In the beginning, swapping listings on note cards at membership meetings meant that the demands of running an MLS would not have been greatly different from that of the Association. But the desire for efficiencies of trading information increased, so did the demands of running an MLS which caused two distinct, but related, problems: First, the staff originally hired to handle the purely administrative details of a non-profit membership Association were now being asked to run a for-profit corporation, something which many had little or no experience doing.  And second, a Board of Directors long-accustomed to their biggest issue of the year being the planning of the charity fundraiser or annual installation banquet was now tasked with running an actual for-profit business, including making policy decisions that affected business practices in their market.  

Through no fault of their own and with the best intentions in the world and very little direction, training, or education from the National Association of Realtors, when called to serve the new MLS, these volunteers relied upon what experience they had - which was how to run a membership association.  The direct result was that despite increasingly complex requirements of running a for-profit Multiple Listing Service corporation, many volunteer leaders applied the same governance, structure,  processes, and volunteers from what they were familiar with already - a model specifically designed to run a not-for-profit membership organization.


With the move from the printed MLS book to online listings came significant additional complexity for both Association staff and leadership, suddenly requiring knowledge of computers, databases, software, technology purchasing decisions, and emerging technologies far beyond the original parameters of association management.  The result has been a twenty year scramble to catch up - with very mixed success. 

Ironically, the ability to meet these challenges has been under the nose of MLS Boards of Directors all this time - the MLS executive.  Because they have actively sought to be educated on their business, the best MLS executives know more about the business, the technology, the local market, national initiatives, NAR policy, etc., than any volunteer can, but many MLSs still treat the MLS exec as an administrator.  Case in point: An MLS exec says to their Board of Directors, "Consumers want agent reviews.  It's already happening in other industries, so we have the choice to either A: Do it ourselves and have control over the creation, management, ability of the Broker/Agent to reply, etc.; or B: Do nothing and watch as someone else introduces a product that we have no say in."  Feel free to substitute the agent reviews subject here with "statewide listing data," "real estate search website," "providing sold data to consumers," etc.  You get the picture.  Board of Directors members, no doubt each of them thinking about the angry client they just spoke with, thinks that agent reviews is a terrible idea and punts.  The MLS exec, who is paid by that very same Board of Directors to be the expert on the business, has their expertise ignored, is unable to enact change because they don't have a vote and, frankly, are expected in many Boards to be subservient to the volunteer President.


In my time as an MLS and Association executive I have met hundreds of other execs; for the most part they fall into two categories of complacent and not complacent.  I have had execs tell me that they could care less about what happens to the industry or their MLS as long as they get another 5 years until they retire, and I have had execs tell me that  worrying about the future of the MLS industry keeps them up every night.  

Of those that have concerns, they have a common grief; the near impossibility of educating  volunteer leadership on the true scale of potential threats to the MLS industry.  They tell me there is not enough time in once monthly meetings when only minutes are allocated to the CEO report, that the turnover in leadership means the exec cannot set a strategic course for more than the one year that the President serves, that the bar for professional knowledge is set too low prior to becoming president, that there are too many Board members, and that the MLS exec is treated more like an administrative post rather than as a CEO.  This is a structural dysfunction, rather than a personal one.  The fault is with a governance model, leadership expectations, and structure still deeply tied to its membership association roots.

In the real world, the CEO sets the direction of the company and is solely responsible for leadership, vision, and the direction of the company.  They are the professional employee, expected to be the subject expert.  They are surrounded by Board member stakeholders of differing expertise, specifically geared to be complementary to the corporation's mission.  The Board's job is to listen to the CEO, critique, if necessary, then let them do their job by setting expectations and holding the CEO accountable.  

As Chairman of the Board the Chairman's job is to run the meeting, and, assuming they are on the same page as the CEO, to support, defend, and fight for the strategic vision articulated by the CEO.  Recognizing that the CEO is the expert in the room, the Chairman uses their position to influence discussion, policy, and voting to support the initiatives of the corporation. The Chairman's job is also to hold the CEO accountable for meeting the performance goals established by the CEO.  The runaway salaries and eye-popping compensation packages we see in many corporations today is the direct result of a failure by the Board to set meaningful, achievable, measurable goals with the CEO - and hold them accountable for failure.


It's a lot to take in because its so different from the way most MLSs are run now.  If you are a broker and you don't agree with me, think of it this way.  Would you want a Board of Directors full of MLS execs making decisions for your company?  How could they possibly have the expertise to determine better than you can what a good decision or a bad decision for your brokerage are?  They couldn't, which is my point exactly.

An MLS exec I think highly of calls this the "professionalization" of the Board, and it's one of the most important things MLSs will need to do to stay relevant.  I've heard of Board members that describe themselves as  "tech gurus," but could not understand why their iPad's wireless connection didn't magically follow them around wherever they go.  I've heard of Board members proudly bragging that they could manipulate anyone into doing anything they want, and I've heard of Board members who have served out their entire terms without once offering an opinion or insight.  Like most MLS execs,  I have also had the privilege to work with truly outstanding, talented volunteer leaders who have brought incredible value to the Board room.  Given a choice, I'd bet that the best MLS execs would choose to work with - and be challenged by - a highly educated, engaged Board every day of the week over marking time with a leadership of those most willing to serve, rather than those best suited to serve.

It's time to create a process to find and keep professionals and volunteers who are not complacent.  It's time to set expectations higher for both executives and Board members and it's time to give MLS executive professionals the room and support they need to enact real change. - CP