Kaizen-Continuous Improvement in Your Appraisal Business

Welcome back to the real value blog, the blog about real estate, appraisal, life, success, and well… how they all fit together. Hello my friends, my name is Blaine Feyen and I am your host for this and every real value podcast and I am so excited to be hanging again with my tribe of 1%ers, people who care more about growth, about learning, about making the world and the appraisal industry better each day by making themselves better each day. How much better? 1% better each and every day. If you can just focus on making a bunch of little changes continuously you’ll likely be much further ahead at 6 months or 1 year than if you tried to make huge audacious changes like some coaches, speakers, and trainers teach. Not necessarily in our industry, but some of the big names in coaching, goal setting, and motivation use words like audacious and massive when referring to goals when the problem most people have is even moving a little but forward. Most of the calls and emails I get from people are regarding simply not knowing what to do to even get started. Most people don’t want to be told to set audacious goals and then take massive action, as Tony Robbins is so famous for saying. Great advice, but really only great advice from people who are already versed in the art of achieving, goal setting, getting things done, and tracking their results. To get to that point, however, takes a vastly different approach.  

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Having been trained extensively in a Japanese system of thinking, creating, and achieving, I learned early in life about something the Japanese call Kaizen. If you’ve never heard of Kaizen I would encourage you add it to your 1%er list of things to research because it speaks loudly to this idea of continuous improvement. In fact, that’s what Kaizen means: continuous improvement. That’s the loose translation, by the way. Any time you’re talking about Chinese or Japanese words, you’re talking about characters or pictures that are translated into a loose meaning that is easy for us to understand. Once you start learning what individual characters of Japanese writing mean, you really start to learn the deeper meaning of the words and the concepts they convey. I always found this fascinating because there are words and phrases in other languages that have no direct translation and, in fact, to truly understand the word or concept, you’d have to understand the history of a culture and how they see things, which is quite often extremely different than how we, as Americans, see and understand things. The Japanese, for instance, tend to see things in multi generational outcomes so they tend to plan for their great, great, grandchildren. I’ve heard it said that the Japanese plan, as a general rule, 100 years out. As opposed to most Americans who tend to plan a week or two in advance and that’s about it. Again, this is a general rule and a concept and does not apply to every person in either country. It’s the lessons that we’re trying to learn from, not necessarily whether its true in every situation.  
  
So the word Kaizen is comprised of what looks like two Japanese characters or kanji. In reality, its two characters comprised of 4 pictures. The first word, Kai, loosely translates as ‘change’ and the second word, Zen, loosely translates as ‘good’. So, together the two characters loosely translate as good change or making good changes. However, when you break down the two characters into their 4 word pictures, the first word Kai is comprised of two words that stand for the self, and the second one is a picture representation of someone being whipped on the back. So the two pictures together mean self whipping, or taking responsibility, or self motivation, or kicking your own ass into gear, or something along those lines. The second kanji, Zen, is broken down into two word pictures with the top one meaning sheep, and the bottom one meaning an altar, as in sacrificing a sheep on an altar. In other words, simply sacrifice. The first word meaning getting your ass in gear and the second one meaning sacrifice. So, now that we have a better understanding of how the Japanese think, what the word Kaizen is really telling us is that ‘good change’ really takes some sacrifice and and has to be self driven. It isn’t going to happen on its own and its going to take a little sacrifice on everybody’s part to make some ‘good change’. The reason they call it ‘good change’ is because they see small continuous changes as being good for everybody. When you change yourself for the better and continue to do it on a regular basis you are ultimately contributing to the betterment of the whole society, which, of course, has long term effects.  
  
At this point, I should warn you that if you go searching for Kaizen on the internet you’ll find lots of information referring to something called Lean thinking or Lean manufacturing. That’s because the word Kaizen has become synonymous with the Toyota manufacturing profess and a movement in the manufacturing industries called ‘Lean’, which is a mindset and method of continuous improvement of manufacturing processes and procedures to cut waste, improve production, improve quality, save money, improve worker engagement and happiness, and a bunch of other metrics that Lean manufacturing tracks and measures. However, the idea of Kaizen transcends manufacturing because it is, quite simply, about continuous self improvement. Making tiny incremental 1% changes along the way that may not seem like a big deal at the time but contribute to the overall whole which leads to the big changes over a longer period of time. To give you an example of how Toyota implements kaizen in the workplace in contrast to how American manufacturers try to implement some of these improvement concepts, studies were done in the late 90’s tracking how workers were encouraged to bring ideas and suggestions to management to help increase productivity and possibly spur innovation. After all, the worker is on the front line and sees things that management often misses. The average American auto worker makes 3 suggestions every two years with an average bonus compensation for their ideas of $450 per suggestion. The average Toyota worker contributed 200 suggestions per year with an average bonus compensation of $3.17 per suggestion. You might be saying, “uh, I’ll take the $450 please!” But what we learn from stepping back and looking at the big picture is that the culture that is created by offering big rewards for big innovations or cost savings means the average worker is looking for huge leaps in innovation. It’s the only way to get paid, after all. Since most people just show up for work and then go home, most of the workers have little interest in doing the hard work of thinking and looking for big changes. If they find them, by the way, they’re much less likely to share them with a coworker out of fear the coworker will give away the idea and get the money. 
  
What Toyota figured out, with the help of Dr. W Edwards Deming after World War II, is that workers tend to want to come to work and be creative and energized and motivated anyways if the environment is right. He wrote a whole chapter in one of his books called ‘getting fear out of the workplace’ which Toyota took to the Nth level. With only small compensation bonuses for ideas and innovations, Toyota reaped the benefits of their average worker contributing 200 ideas per year that contributed to tiny little changes in processes and procedures over an extended period of time. What they found was that they were able to implement well over 85% of the employees suggestions almost immediately because they were small incremental changes that were being suggested and not necessarily huge leaps and massive change. Of course, what they found over time and what we know to be true is that every one of those tiny little changes contributed to massive change over a longer period of time and Toyota still blows away American auto manufacturers  in almost every metric measured. With such a small reward for small ideas and changes, the average Toyota worker isn’t afraid to share their ideas with coworkers because $3 isn’t going to make or break their day and they know they have 199 other ideas to contribute that year.  
  
So what does this have to do with an appraisal business you ask? My friends, its not just about your appraisal business, its about your whole life. Appraisers are like most entrepreneurs in that most of you are everything in your business. You’re the chief appraiser, the training director, the commissioner of innovation, the accountant, the chief marketing officer, the employee relations department, the community outreach division, the face of the brand, the collections administrator, the Human Resources director, the janitor, and the all around chief of operations. Making big changes to your organization of one or two likely means big disruption to all of those departments. I’m being facetious, of course, because all of those departments is you! You’re not likely to change because its too disruptive and takes time away from the key work in your organization, which is production. After all, that’s what brings in the cash, right? What I am encouraging you all to do is to take some time out of every day, maybe even just 2 or 3 times per week in the morning when you’re fresh and your mind isn’t scrambled from solving problems all day, and look for small incremental changes that can be made toward increases in efficiency, mobility, profitability, and your overall well being. I see and talk with appraisers all the time who say they’re working 50-60 hours per week, working weekends, staying up late at night to finish files, getting up early to finish files, and not taking vacations, however big or small, because they either cant afford it or because they don’t want to take the time away from their business.  
  
My friends, I know that one of the great benefits of this business is that we can set our own schedules and essentially work when we want. I know for some people that may mean working late at night because you’re a stay at home mom and you’re doing the hard work of raising a family during the day. Ok, you’re excused to some degree, although there are likely 50 small things you could be doing during your day that could cut time and increase your efficiency while you’re working at night. Those of you working on the weekends, if that’s what you love doing and that’s your most productive time, ok you’re excused to some degree. Hopefully though, you’re not working a 40 or 50 hour work week and then working again on the weekends. I don’t want to offend anybody or ridicule anybody for the way they choose to work. If that’s your thing, that’s your thing. What I would strongly encourage all of you though is to consider how many hours you are working and what kinds of tiny little incremental changes could be made to your day or week to shave off 15 minutes here and there. I began this process well over a decade ago and can tell you that I work 30 to 40 hours per week, maximum, and that includes doing some other things like podcasting, coaching, masterminds, business planning, tracking and measuring goals, etc. I have a very active and busy appraisal firm with apprentices and some virtual assistants and I try to leverage everything I possibly can when it comes to technology and efficiency in my business so that I never work past 5 or 6 at night and never work on the weekends. Never! I haven't worked on a weekend in my appraisal business in almost 15 years. I wont tell you our exact numbers but its always over 500 and typically less than 1000 files per year. By the way, speaking on the topic of small incremental changes, our average price per appraisal has incrementally increased almost every year that I’ve been in business for myself and its because I’ve been implementing small incremental changes to my clientele, my fees, my network, my processes, my tools, my client mix, my activities, what I track and measure, and what I consider to be important and what isn’t. 
  
Now, the only reason I share that information with you is because I know for some that’s a lot of appraisals and for others its peanuts. But the important part of all of it to me is the hours worked and the lifestyle I lead relative to the production. Over the years, with small incremental changes to my processes and tools, I’ve been able to produce more in less time with higher fees, better clientele, better client mix, and all leading to a better lifestyle each year. As I mentioned, I haven’t worked on a weekend in 15 years, I travel, ski, we go to the beach, we are very active on the weekends, we take short 3 and 4 day vacations throughout the year, we took a long 15 day one to South Africa last year, and I enjoy lots of time with my loved ones. I’m a single parent, by the way, so no additional income from a spouse, in case you were wondering. Had I tried to overhaul my business in year, two, or three with all of the things that my business utilizes and operates with now, it would have been a monumental change that likely would've been too big to tackle. This is what we in personal and business development call revolutionary change, as opposed to organic change which happens slowly over time and in incremental ways. It was because I started implementing small incremental changes in our processes, procedures, and tools over time that I’ve been able to get my production up, my quality has increased considerably over the years by the way, my fees up, and my time on each file has gone down considerably. My work days typically start no earlier than 10am and typically end by 5pm each day. As I’ve mentioned in previous episodes, I’m typically up around 6 each morning doing my morning routine, writing and creating until around 10. I start my work day around 10 or so and the only time I may work later than 5 or so is on presentation days. This week I had a two hour presentation at a real estate office from 12-2 so that naturally sets my day back a couple hours and I ended up working until about 6:30 to finish a file. But I started my work day around 11 that morning instead of 10 so it came out to about the same amount of hours in my day. On the topic of working on the weekends, by the way, I get it. I used to do it. Sometimes because I had to to keep up, but sometimes because it can be the most peaceful time to work. No clients or AMC’s bugging you, less pressure to perform because you know all your clients are closed, or at least don’t expect updates and completed appraisal files to be uploaded and delivered. For some, this is the perfect time to get stuff done. I totally get it. What I’m encouraging though is not that you don’t work on the weekends. It’s that if you are choosing to work on the weekends then you are taking days off during the week to recharge, refresh, recover, and rebuild. These are the days you need in your business and life if you want to enjoy your work, grow each year, attract and be able to handle new business and a new mix of business, and then to have a business that gives you more life than it takes away. For those of you who think this cant be found in the appraisal and appraiser business, there are many of us who are here to tell you it can be done and done fairly easily with the right mindset and things in place.  
  
So I’m not telling you to adopt my schedule by any means. One of my mentors, who was a production machine back in the day, loved to get on the road by 8am every morning and drove like a bat outta hell to his 5 or 6 inspections that morning and it was a race to get back to the office by noon to start working on those reports. He wouldn’t leave the office until all of his inspections that day were completed. I’m not built that way and I highly value my morning routine and lifestyle so I take advantage of my mornings when I am the most creative and productive at writing and producing content for the podcast, my coaching clients, and my other businesses. For me, working my appraisal business between 10am and 5pm works well. For you, maybe its 9am to 6pm, or 8am to 7pm. I don’t know how you work and what your processes are like but I am strongly encouraging you to take a hard look at hours worked relative to production and dollars earned because I know many of you are extremely overworked and grossly under earning. I don’t say underpaid because that would imply that you have no control over it and you do. Kaizen is the process of continuous improvement by making small incremental changes to things. Find ways in your business and life that you can make tiny little 1% changes to processes and procedures and then look back over time and see how they add up. By the way, if you’re struggling with the idea of paying for various software services that may help you save time, you haven’t done a deep dive into what your time is really worth. Remember, your time is your most valuable currency my friends and if you can save 15 minutes here and there by becoming more efficient or by utilizing technology a little better, It is worth your time to look into it. It can be scary making changes, I get it. Which is why I always recommend making small incremental changes over a long period of time. After a while, you will have built a new habit of Kaizen: continuous improvement. I guarantee if you do you will see the benefits over time in your office, your life, your bank account, your health, and your relationships.  
  
Dare I say, that’s it this week my friends? No, I wont say that’s it because this is everything! Your life is everything and your business MUST be something that gives you more life not something that takes it from you. It’s through the process of Kaizen, continuous improvement, that we whittle away at the things that don’t matter and enhance the things that do. Life is not a series a huge leaps and massive breakthroughs but a series of days, hours, minutes, and seconds that slowly add up over time. Make the most of those minutes, hours, and days by focusing on the small little 1% changes that you can make that will give you more of your life back and enhance the juiciest parts of being alive. I know you can do it because you wouldn’t be listening to this podcast if you weren’t somebody who cares about being better. It’s what being a 1%er is all about.  
  
I’d like to thank you for listening this week my friends and also tell you that there is bonus content with this episode. Yep, that’s right, you thought you were done with me but I recorded a whole other episode only for the members of the value syndicate. If you tune in on Itunes, stitcher, podbean, Libsyn, or some other podcast service, you may not be getting the private bonus episodes so I encourage you to go to www.RealValueCast.com or www.RealValueGroup.com and simply put in your name and a good email address and we’ll send you the podcast each week when a new episode drops, but you’ll also get the free bonus episodes that I put out typically about once per month or so. The bonus episodes always have real life day to day tactical and practical tips and ideas for making your life and business better. This week’s bonus episode is a continuation of last week’s episode, which was called ‘Can we speak like we’re old friends’ and was all about developing your speaking skills so you can give more presentations and get out there into your market and become the face of appraising in your market. I firmly believe this is going to be one of the most important skills needed to move into the future of appraising, and here’s the most important part, with higher fees! So much talk of bifurcation, desktop appraisals, AVMs, algorithms, AI, big data, Zillow, and the new wave of appraisers coming into the business with less training, fewer hours, more technologically savvy, and willing to do faster work for less money. What I give you in the bonus episode is 35 of the most common questions asked in the kinds of presentations you are likely to give to a group of realtors, attorneys and financial planners. I give you the questions and some language to deal with each one of them and with them, you can build a whole presentation around just those questions. In fact, you could just build and offer a class called ‘the top 35 questions on everyone’s mind about value’, or ‘What the heck are you thinking?, 35 questions I get asked by almost everyone’, or ‘You’ve got Q’s, I’ve got A’s, the most common questions I get on a daily basis’. Whatever you decide to call it, I recommend making it interesting, fun, exciting, engaging, something that allows I your personality to come out and makes them smile when they see it. When people are having fun in an engaging environment, they’re learning more, they drop their guard, and you have more opportunities to win them over. So be sure to go to either one of those websites and just put in the best email address for you and we’ll send you the podcast each week and any bonus episodes. You can only get the bonus episodes this way and I guarantee they will add some value for you my friends, I wouldn’t have it any other way.  
  
Is change coming? It’s already here my friends but the world of appraising as you and I know it will be around for a long time. There are still people, companies, and industries who value having a highly qualified, highly trained and experienced appraiser be the eyes and ears for value on their deals. The lender side of the business is changing and fast and there’s not a whole lot that can be done by the individual appraiser, except to produce high quality work leveraging all of the technological advances we have available to us. The non lender side of the house is still a very lucrative and viable business opportunity for appraisers with a mind to go after that kind of work and the skill sets to attract it and handle it. Understanding technology, websites and google search, SEO, mobile appraisal technology, developing speaking skills, video production skills, networking, teaching, and content creation skills, just to name a few, are the skills needed to get and keep that business and be profitable and successful going into 2020 and beyond. Last week’s episode talked about 4 things to do to give killer presentations to real estate groups, lenders, attorneys, financial planners, and any group that may have an interest in using you as a value expert. The bonus episode that I recorded for you goes over a few more important aspects of giving productive and entertaining talks and presentations and I also give you a list of questions that are frequently asked at the talks and classes that I teach to realtors. With that list of questions, you can formulate your own list of answers, and I encourage you to write them down or type them out and practice them, so that you can be as prepared as possible to begin giving those super important talks and presentations to the people and organizations that have the ability to choose you for their appraisal needs once they know how knowledgeable and professional you are.  
  
With that my friends, a big fist bump and a hearty bro hug for all my 1%ers for spending your most valuable time with me and that is, of course, your time. I sincerely respect and appreciate you investing a little bit of your time with me each week and I will do everything in my power to give you something valuable in return. I give you the info but its ultimately up to you what you do with it. Are you an action taking 1%er or are you just somebody who likes to listen, get lots of ideas, but then not do anything with them. Either one is ok with me because I think you still get lots of value for your time spent listening but I will always encourage you to take some small steps. That has been the focus of my message for the past couple months now and its because small incremental steps are the key to big breakthroughs. Small steps my friends, that’s what being a 1%er means and I haven’t met anybody yet in my 48 years on this planet that wasn’t capable of making a 1% change in something they were doing daily. And remember, the secret to your future is hidden in something that you are doing daily. I didn’t say the secret to your success because it could also be the secret to your demise. Whatever it is its hidden in something you do daily and you can change it by 1% today. Make that 1% change and then make another 1% change tomorrow. Keep doing that until we talk again next week and we’ll chat about what has changed.