What Has the Industry Learned From Keller Williams?

They call it "Family Reunion" and for 2013 it was Dallas, Texas that played host to over 11,000 raving Keller Williams Real Estate participants from all over North America and nine overseas markets who gathered to celebrate the company's 30th birthday party. For those who made an appearance at CEO Mark Willis's State of the Company presentation (and that would be all 11,000 of them since both "respect" and "being there" are intrinsic elements of KW's now famous culture), there was even a birthday present.

At long last, Willis was able to make the announcement that KW had become, by agent count, the largest brokerage organization in the industry. Interestingly enough, this achievement was confirmed with KW auditing its competitor's websites for reported office agent populations.

This auspicious event and accomplishment make this a good time to review the many contributions that KW has made to the North American real estate industry over the past thirty years. This article is not intended as a tribute to KW, although many might argue that one is due. Neither is it to suggest that there are not several entities within this industry that have made significant contributions to the industry over the past two decades, because there certainly are. It is to say that in the annals of entrepreneurialism, the KW achievement deserves special notice for what it has done, how it did it and when it did it.

Over the past 30 years, KW has created and perfected a business model and corporate culture that long ago declared a wide range of traditional business practices irrelevant and impractical. By doing so it brought upon itself a level of attention and comment that frequently went beyond that reserved for mere competitors, approached ridicule and occasionally reached levels of unhappiness that one might have thought were associated with heretics.

It developed and promoted concepts that often seemed almost revolutionary, but which were always progressive during a rich period in the history of the North American real estate marketplace. Much of this period happened to parallel the great real estate boom of 1992 through 2005, when many in the industry were proving all one had to do to succeed was to toss a net into the market waters. At every step of the way, KW convinced its growing community to go the extra mile and follow an approach that has become a prerequisite to "careers worth having" and "businesses worth owning."

During the past seven years, KW polished its business model in a national market environment that, in and of itself, threatened what was left of the traditional business model as it raced through successive disasters, including the market crash of 2005, the mortgage crisis of 2006, the recession of 2007, and the foreclosure nightmares of that entire era. During this same time, literally tens of thousands of brokerages disappeared from the marketplace.

Never once during the past 30 years has the KW community ever looked back on its decision to take a different road, nor has it ever backed down from its objectives and commitment to follow a central vision that is the backbone of its current success. Without a doubt, history will view this as one of KW's first contributions to the industry.

Real estate has always been about accepting the risk, perseverance and courage. In following its belief that one should "never back down," KW has sustained the traditional industry value that long ago established courage and gumption as critically important attributes.

The KW business model is unique in many ways and one can bet that as investors, who are even now beginning to once again see the industry infrastructure as a positive investment opportunity, move closer they will be closely examining what features and functionalities have allowed KW to succeed over the past decade.

At the same time, brokers throughout North America are also examining their traditional brokerage business models, with many asking themselves what matter of business model will best serve their interests moving forward. The following KW innovations clearly deserve the attention and respect of both of these groups:

• Creating a culture in which excellence in all things is an absolute necessity.

KW market centers and principals live in the same reality as traditional brokers when it comes to agent relationships. KW agents aren't driven to success, rather they are drawn by a culture of recognition and reward to participate and perform at very high levels. KW has created a massive culture in which personal excellence and financial success simply outweigh whatever ego satisfaction might come from an "I don't need no stinking boss" attitude.

• Building a community of inclusion that will drive that excellence.

Within the KW culture, the words care and caring are not brochure fodder, but rather are real and powerful beliefs. Members of the KW family who encounter crisis and financial nightmares find that each year, literally millions of dollars are made available to assist with their crisis through the KW Cares program. It's not insurance that will guarantee a solution, but rather community assurance that reaches out in a time of need and builds loyalty.

• It takes metrics to define a business.

Within KW, business metrics reflecting virtually every aspect of the business have been raised to a level of the Holy Grail. KW maintains an exhaustive database that can either validate or invalidate every possible decision making process.

• In order to be effective, systems must recognize the interdependency of all involved.

It's that old Jim Collins thing. Success requires having the right people, with the right attitudes and the right tools on the bus. At KW, the term "right" is not about guesswork, it's about homework.

• Profitability must be a universal value.

If one is not part of the profitability solution, then one is part of the problem. Within KW everyone, at every level, benefits from profitability but most especially those who contribute to it. The KW profit sharing program has distributed almost one half billion dollars to participating agents. Many within the organization have created retirement programs funded by these efforts. Why wouldn't everyone want to drive profitability?

• Technology cannot be an agent option.

Everyday, KW agents and market center personnel enter the market environment supported by technologies that create an entirely new level of competitiveness. KW's e-Edge transaction management program is redefining the transaction experience. This participation is not optional, it's what makes it all work.

• Understanding the rule and role of knowledge.

Today's Internet empowered consumer has a very low tolerance for agents who try to get by on their personality. KW knowledge management programs, designed and delivered to create a competitive advantage, are not required by statut, but by self-respect. Again, it's the culture.

• Discipline, structure and accountability are the cornerstones of success.

KW takes the position that laxity and undisciplined behavior are the root cause of low performance, wavering self-esteem, and consumer dissatisfaction. No one forces perfection within the KW culture; it is just the most popular choice.

• Systems do not distract from one's humanity, rather they contribute to it.

Systems are the foundation for all manner of success within the KW culture. One very seldom hears the term "independent contractor" in a KW environment. It may take a village to raise a child, but it takes a system to create customer satisfaction.

• Respect is a commodity that adds great value.

In an industry that often lives by the rule of "What have you sold today?" KW has managed to introduce respect into virtually everything that it does. Yes, it is a respect that can be lost for the undeserving, but at the same time it is a respect that is presumed and can be depended upon.

Keller Williams has earned the status and respect that now comes with its new status. KW has contributed to the positive image of our industry. It has reinforced traditional industry values, it has made profitability a science, its has raised the level of respect for REALTORS® in the communities in which it operates and it has helped lay the foundations for an industry moving forward that can once again be seen as a great investment and business opportunity.

It is success well earned and an achievement to be recognized. We are an industry facing many challenges over the next few years. Let's be thankful for having another powerful and competent player to help us move the ball forward.

To view the original article, visit the RECON Intelligence Services blog.