What does it take to get Charlie Young, President and CEO of Coldwell Banker to come to a sleepy lakeside town in rural Northern Michigan in February?
A phone call from the owner of a family business, that’s what.
Ken Schmidt, CEO of Coldwell Banker Schmidt Family of Companies, and his team were planning their award ceremony to celebrate their agents and success in 2018, and they thought that maybe Charlie Young might want to get in on the action. He did.
When you hear the term “family business,”, you might picture a mom and pop shop with a screen door and a certain charm that doesn’t extend much past the block the storefront has been on for the last 25 years.
This might be your first thought, but don’t tell that to the Schmidt family. When they hear the term “family business,” they think of a real estate company with more than 1,700 agents, more than 80 offices, a 2018 sales volume of over 3.3 billion dollars, and five generations of family members.
Here at The Close, we’re always looking for opportunities to speak to those who are at the top of their game in order to get our readers the best insight and strategy possible.
We sat down with the Vice President of Marketing, Tracy Bacigalupi, to learn more about the company, and how a one-man operation in 1927 grew to become one of the largest footprints in franchised real estate.
Servant Leadership in Real Estate
According to Tracy, the winning combination is Servant Leadership with a healthy dose of Initiative.
“First of all, understand that it took us 92 years to get here.” Tracy said with a laugh when I asked her about how a company grows like the Schmidt Family of Companies has.
“In all honesty, I think it starts and ends with our leadership. I see the commitment our leadership team has to our (company’s) core values every day. Servant leadership, collaboration, loyalty, positive outlook, and initiative.”
Though all five of these core values are interesting, the two that caught our attention the most were the first and the last; servant leadership and initiative. We asked Tracy to tell us a little bit more about them.
“Servant leadership has always been a hallmark of what we do here. Every decision we make at any level of leadership is considered an opportunity to enable the success of those we lead. Leaders should be empowering those who they lead, not the other way around.”
What Does Servant Leadership Mean Exactly?
Servant leadership is a leadership style pioneered by management specialist and consultant Robert Greenleaf. The essence of this movement is focused on the idea of turning the typical power structure pyramid upside down.
Greenleaf’s belief was that those with the most power have the greatest opportunity to make the biggest impact on those with the least amount of power, but paradoxically, a large responsibility for your success.
In Greenleaf’s world, an employee shouldn’t be asking “What can I do to make my boss successful?” but rather, the boss should be asking all of his employees “What can I do to make you more successful?”
The impact of a philosophy like this in the real estate industry can be huge, and in the case of Coldwell Banker Schmidt Family of Companies, is undeniable.
The Origins of Coldwell Banker Schmidt
Harold F. Schmidt founded Schmidt’s Real Estate in 1927, setting up shop in a modest office on the main street of the soon-to-be former logging town of Traverse City, MI.
With its early operating days during the start of the Great Depression, Harold’s unwavering commitment to honesty, integrity, and service—not just to his clients but to the people who he eventually hired to work with him—made him a staple in the community.
Fast forward 92 years, and the company has transformed into a multi-state operation with offices all over Michigan, in major markets in Ohio, on both coasts of Florida, and even in St. Croix of the US Virgin Islands.
Harold’s grandson Ken is now the CEO of the company, and Harold’s commitment to servant leadership remains intact through Ken.
The CEO With the Basement Office
Want to visit Ken? Sure, pop into his office any time. He isn’t in the corner office of some beautiful high rise in a big city, surrounded by glass and views of the water. He gave the best offices in his buildings to his agents.
His office is in the basement, in a building just blocks away from where his grandfather’s office was, in rural Traverse City.
And, amazingly, you can still get him on the phone. In fact, he encourages it. Ken and Mike (Ken’s son, the current President of the company) both have their cellphone numbers on the company phone directory, distributed to every single agent in the company. If you have a question, these guys want to answer it.
It is worth noting that Mike, company president, Harvard Business School graduate, also has an office, in the basement, with no windows, right next to his dad’s.
“We think about ways to live this ideal [servant leadership] all the time,” Tracy continued. “Even down to the agents we recruit. Just like any brokerage, our agents are independent contractors, but we believe that those who join our team want something more than just a commission check, they want to be part of something bigger.”
Recent Company Growth
Though the term “bigger” wasn’t on their list of core values, you’d be forgiven if you thought it was. Growth, especially in the last 20 years, has been impressive. Through a seemingly never-ending series of mergers and acquisitions, The Coldwell Banker Schmidt Family of Companies has grown to incorporate over 80 different locations, and there are aggressive plans to continue this trajectory.
By our count, since April of 2017, more than 14 new office locations have come under the CBSFOC banner.
I asked Tracy for some insight into the company strategy for acquiring new brokerages.
“We do a lot of due diligence. When we find a company that is performing well, that seems to be in line with our values, that works with our overall strategy, we dig in and really do our homework to see if they also have initiative.”
Hard Work is a Given
There it is, that last value again; initiative.
Tracy told me that until about five years ago, that core value was actually something different.
“Yeah, we changed it. It used to be ‘hard work’.”
When I asked why this change was made, her answer seemed to sum up nicely the larger question of why this company has been successful and will continue to be in the future.
“Well, we figured that hard work was a given. Success isn’t the result of easy work, but it is the result of initiative. You can’t just have strength or stamina. You need to have the desire for leading action.”
Becoming a Fifth Generation Family Business
According to a Boston Globe interview with Dr. David Paradise of the Family Business Resource Center, only about 30% of family businesses survive the transition into the second generation. That number shrinks to less than 3% beyond the fourth generation.
With Ken’s granddaughter now a Realtor in the company, a fifth generation is preparing to one day take the helm. A continued commitment to the ideals of servant leadership and initiative are essential to helping the Coldwell Banker Schmidt Family of Companies to secure their place among that 3%.
How Can Servant Leadership Impact Your Work?
Servant leadership in the real estate space is a powerful tool. As Realtors, we are de-facto leaders of our community. People look to us to help answer the fundamental question of “Where should I live?”
As a leader in your community, office, or team, ask yourself, “What can I do to enable the success of those around me?”
If the Schmidt family is any indication, enabling others’ success is the surest way to drive your own.
Tell us about your experience with servant leadership. What are your takes on this philosophy?