Featured Real Estate Columnist – Rob Kochanski
REAL ESTATE MAXIMUM PROFITS
The Aggregation of Marginal Gains: How “The Value-Driven Approach To Sell Real Estate” Creates Max Profit For Homesellers!
I read an incredible article the other day about Tour de France cyclist coach, Dave Brailsford.
From the article, “In 2010, Dave Brailsford faced a tough job. No British cyclist had ever won the Tour de France, but as the new General Manager and Performance Director for Team Sky (Great Britain’s professional cycling team), Brailsford was asked to change that.
His approach was simple.
Brailsford believed in a concept that he referred to as the “aggregation of marginal gains.” He explained it as “the 1 percent margin for improvement in everything you do.” His belief was that if you improved every area related to cycling by just 1 percent, then those small gains would add up to remarkable improvement.
They started by optimizing the things you might expect: the nutrition of riders, their weekly training program, the ergonomics of the bike seat, and the weight of the tires.
But Brailsford and his team didn’t stop there. They searched for 1 percent improvements in tiny areas that were overlooked by almost everyone else: discovering the pillow that offered the best sleep and taking it with them to hotels, testing for the most effective type of massage gel, and teaching riders the best way to wash their hands to avoid infection. They searched for 1 percent improvements everywhere.
Brailsford believed that if they could successfully execute this strategy, then Team Sky would be in a position to win the Tour de France in five years’ time.
He was wrong. They won it in three years.
In 2012, Team Sky rider Sir Bradley Wiggins became the first British cyclist to win the Tour de France. That same year, Brailsford coached the British cycling team at the 2012 Olympic Games and dominated the competition by winning 70 percent of the gold medals available.
In 2013, Team Sky repeated their feat by winning the Tour de France again, this time with rider Chris Froome. Many have referred to the British cycling feats in the Olympics and the Tour de France over the past 10 years as the most successful run in modern cycling history.”
The article then asks, “What can we learn from Brailsford’s approach?”
The answer is obvious, isn’t it? The coach’s concept, “The aggregation of marginal gains.” As the author points out, “It’s easy to overestimate the importance of one defining moment and underestimate the value of making better decisions on a daily basis.”
And, also states, “Almost every habit that you have—good or bad—is the result of many small decisions over time. And yet, how easily we forget this when we want to make a change. So often we convince ourselves that change is only meaningful if there is some large, visible outcome associated with it. Whether it is losing weight, building a business, traveling the world or any other goal, we often put pressure on ourselves to make some earth-shattering improvement that everyone will talk about.
Meanwhile, improving by just 1% isn’t notable (and sometimes it isn’t even noticeable). But it can be just as meaningful, especially in the long run.”
After all, isn’t that how Warren Buffett became one of the world’s richest people? Not overnight. But through the power of compound interest. Small regular improvement. Aggregated together. Compounded over time.
Again, it didn’t happen overnight. But that “Value-Driven Approach,” as Warren Buffett is a value-driven investor, is what turned Buffett’s portfolio from 3 shares of Cities Service, an oil service company, at the ripe age of 11—into, 75 years later, a personal fortune of $72.5 billion. Or, purely for effect, to truly understand the size of that number: 72,500 million.
Well, when selling real estate. The path to maximum profit, no different than winning the Tour de France or engineering a massive portfolio, isn’t done with one epic, noticeable decision. It is, instead, the aggregation of many small decisions that serve to eliminate fundamental mistakes.
Take a look at the chart below:
Now imagine the negative impact of just a 5% decline in decision-making effectiveness over the course of 100 decisions. At first, it’s not noticeable. But quickly, those inferior decisions begin to compound, derailing the entire train. The opposite is true for highly-effective decisions. They too, over the course of 100 decisions, quickly compound to lead to a result that maximizes profits.
This is why, when it comes to our approach to sell real estate, we documented it, to be sure we consistently made more effective decisions. End result? Happy clients. Higher profits.
Rob Kochanski is the author of ‘The Value-Driven Approach: A practical guide to protect yourself from REAL ESTATE GREED & bank and extra $30,000 by THINKING like the great Warren Buffett.’ He is a licensed agent with Premier Point Realty and a local entrepreneur as well. For a free copy of his book visit: www.TosaFreeBook4Charity.com