7 Ways to Constructively Give Criticism for a Better Real Estate Business

by | BiggerPockets.com

Tough conversations are, well, tough. Unfortunately, sometimes people don’t do their job right or don’t do right by you in one way or another. And letting these problems simmer and build in business works about as well as it does in your personal life. Robert Brodo notes that, “Not having those hard conversations is the silent business killer. It impacts everything, and most of the time, we don’t see the damage or impact.”

If you just let mediocre or poor performance slide with employees, contractors, vendors or the like, it will inevitably lead to even worse performance. People who aren’t getting the job done rarely just start to do well out of the blue. At some point, you may need to cut the cord, either by no longer using that particular contractor or firing that employee. But before things go that far, it’s important to have those difficult conversations that we all dread so much. Here are a seven ways to make such conversations easier and more productive.

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7 Ways to Constructively Give Criticism for a Better Real Estate Business

1. Try using the “compliment sandwich.”

Yes, this is technique is a bit cliched, but that doesn’t necessarily make it a bad thing. For the uninitiated, this technique works by giving praise followed by noting whatever shortfall is present and then finishing off with praise again. This way, you start the conversation off on a positive note and finish it on a positive note, while still getting your point across that there is a problem to be addressed.
There are a few things to be cautious about with about the compliment sandwich, though:
  1. Make sure the compliments don’t sound trite and forced. If they do, the person being critiqued may feel like this is faint or even false praise that’s just setting up the hammer to drop. The praise needs to be genuine.
  2. On the flip side, some people can overemphasize the compliments and fill the sandwich with so little meat that your main point—the problem in need of addressing—gets lost in the shuffle. I was in one meeting where a manager of ours was giving what was supposed to be a negative performance review, and yet I could hardly even make out the criticism when she was about ready to end the meeting. I had to intervene to even make the point that there was a problem.
In other words, it’s all about balance when it comes to compliment sandwiches.

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Related: 5 Business Books That Changed My Real Estate Investing Life

2. Schedule meetings ahead of time.

One time a while back, I overheard one of our employees end a conversation with a tenant very abruptly. The tenant started yelling at him, and our employee said something like, “When you decide you are not going to yell at me, you can call back, but I’m sorry, I’m done with this conversation for now,” and then hung up. Yes, if a tenant starts screaming at you, at some point, you have to end the call, but this is not the right way to handle it. First, you should request the tenant stop yelling, then give them a bit of time to cool off, and if all else fails, politely ask that person to call back later.
I was not happy about this, but at the same time, I was really busy, and so I wrongly decided not to say anything. In my defense, it can be hard to just drop everything and correct an error, especially one you weren’t prepared to address. Thus, it is often better to schedule these types of meetings ahead of time. With employees, scheduling performance reviews ahead of time, or better yet, making them routine, can force you to do this. But even with contractors and vendors, it can be useful to say, “Hey, there are some issues I would like to address. Can we talk on the phone or meet sometime tomorrow?” This gives you time to prepare your thoughts and will also give that person some forewarning that something is amiss.

3. Speak in the third person and use personal examples.

“You do this” and “you made this mistake” sound very combative. And when people feel like they are being attacked (even if it’s just some constructive criticism), they get defensive and it’s almost impossible to make any headway. However, you can foster a more collaborative atmosphere by discussing the same issues by either speaking in the third person or using a personal example.
So instead of saying, “You hung up on a tenant and that makes us look bad,” say something along the lines of, “We want to come across as professional as possible, so when someone abruptly hangs up on a tenant, it doesn’t fit the goal we are trying to achieve.” This makes it sound much less accusatory, even though you are still addressing the actual problem. You can also use personal examples. “I know it’s tough when a tenant is screaming at you. One time, I lashed out at a tenant who was making some unreasonable demands, but that just made the problem all the worse. I’ve learned since then that the best thing you can do is just listen and be empathetic until they calm down.”
Of course, like with the compliment sandwich, you can’t take this too far and make it sound like you are speaking in abstractions. You still need to be firm enough to make them understand you are not happy with their performance.

4. Speak in terms of solutions.

Don’t get so bogged down in the problem that you forget about the solutions. How do we get from A to B? What are the action steps? If you just dress someone down, that person will obviously understand that he’s not getting the job done. But other than a bruised ego, what has it got him? You need to be clear about what the steps are to get from here to there. They may be obvious. Say you have an employee who has a problem with absenteeism. Well, that employee needs to show up to work consistently. Or say you have a contractor who doesn’t finish projects. Well, that contractor needs to be more thorough on the punch out. They may not be able to do it, but it’s obvious what needs to be done.

But that isn’t always so—say, if the person in question has a problem with organization. Solutions aren’t quite as obvious, which is why the next step is also so important.

5. Get their feedback and ideas; give them ownership.

You may be able to get a degree of compliance by simply demanding someone do something. But to really get someone on board with the need for change, that person needs to take ownership of it. A good meeting of this nature should not simply involve you lecturing the offending party. It may have to start that way, but it should turn into a conversation. Ask for their feedback and ideas on how to solve the problem. “So, let’s say a tenant yells at you again. What do you think would be the best way to handle it?”

Related: 5 Business Books That Changed My Real Estate Investing Life

Listen to their ideas intently. Some of them may be better than what you were originally thinking. But again, don’t let it stray off course. If their solution to absenteeism is “well, I will just work harder when I actually do show up,” that’s not going to cut it.

investing-is-easy

 

6. Use key performance indicators.

Key performance indicators (KPIs) are a great way to judge the success or failure of all sorts of things in your company, including employees and contractors. A few examples include:

  • Applications per Showing (Leasing Agent)
  • Call Back Percentage (Maintenance Technician)
  • Time a Job Took to Complete as a Ratio of the Price of the Bid (Contractors)

You may not know what a good “applications per showing” ratio is when you first start measuring it, but once you have one, you will know what is better and what is worse going forward. If the ratio starts at one application for every three showings, then you know that two for every five is better and one for every four is worse. You can also compare one employee or contractor to another.

By creating and tracking these numbers, it makes it easier to point to real, concrete things that can’t just be brushed aside as a difference of opinion. While you need to make it clear that you as the employer or client have the opinion that really matter, when subjective opinions differ, it makes it more likely that the parties will retrench into defensiveness and the whole conversation will become combative. That’s why numbers are so great. It’s hard to argue with numbers.

7. Use write-ups and followups.

Alas, one conversation rarely fixes a problem. As noted at the beginning, sometimes you just have to cut the cord. But even when it comes to firing an employee, it’s a lot easier to do it if you have built up to it with such difficult conversations. I remember a successful investor once telling me that “no employee should ever be surprised to be fired.” Even when employees or contractors do start to get their act together, they will often need followups and course corrections along the way.

Finally, if you don’t have a written track record, it will be all but impossible to challenge an unemployment claim if you actually do fire an employee. These claims come back to bite you by increasing your unemployment insurance costs. So, when you do have a serious conversation about a major problem with an employee, you should write up the problem and ask the person to sign it. They won’t like that, sure, but it will drive the point home. Writing things down, in and of itself, signals their importance.

I should note that for smaller issues, such write-ups are usually unnecessary, although you should at least document it for your own records. With contractors, it’s probably wise to send them something in writing that documents the issues you are having (politely, of course), but it doesn’t have to be so formal since you don’t have to fire them. You can just stop using them.

Regardless, tough conversations are easy to avoid, but in the long run, avoiding them will make you far worse off. It’s better to have them now and approach them in a polite and professional manner with the tools noted above.
How do you handle giving criticism?
Leave a comment below!

About Author

Andrew Syrios

Andrew Syrios is a real estate investor in Kansas City and a partner in Stewardship Properties along with his brother and father. Their company owns just over 500 units in four states.

7 Comments

  1. Drew Marting

    This article really resonated with me and some recent Crucial Conversations training I participated in. I think that would be another great resource for someone wanting to improve these skills that are often overlooked and avoided. Thanks for shedding the light on yet another important but probably not very common topic. Also note these skills can have very practical application in our personal lives outside of business as well.

    More info about Crucial Conversations here: https://www.youtube.com/watch?v=EFaXx3pgaxM

  2. John Murray

    This is why I hated being an employee. Employees blame others for when things go wrong, performance is judged on a bar that changes and that ever popular political correctness environment. Then there is coaching, training and boring meetings. When I was employee I was sent to communication classes, twice. I don’t know if my behavior improved but there were some attractive women there and lunch was free. Now I’m an entrepreneur multimillionaire and treat people with respect and fairness. Those are the key words respect and fairness not equality which seam to be the buzz word for political incorrectness. I don’t know how I never got fired, the lord moves in mysterious ways.

  3. Ashley Wilson

    Great Article! Our business is a family one, so it makes the conversations even more difficult to have when needed. However, your second sentence, “And letting these problems simmer and build in business works about as well as it does in your personal life.” really drives the importance and the need for these conversations. In the end, sometimes the hardest thing and the right thing are the same…

  4. Erik Peddle

    Great Article! Going to pass it around to my team! Just gave a compliment sandwich today it it apparently tasted great for everyone involved. It always helps to start with ways you can improve yourself and your lack of amazing management.

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