I recently had the opportunity to spend the day with a very successful and inspiring entrepreneur, Lawrence F. Flick IV. The chairman and CEO of Prudential Fox & Roach and The Trident Group has built an incredible real estate business and continues to adapt, adjust and evolve to deliver exactly what customers want and lead his organization into the future. During our recent visit we did a little Q&A about his entrepreneurial journey.
In a couple weeks I’ll be joining Larry in Las Vegas for the 2013 Prudential Real Estate Sales Conference, and I think anyone planning to attend will find Larry’s insight about the business particularly compelling. Even if real estate isn’t your game, I think you’ll enjoy Larry’s thoughts on sales, leadership and business performance as much as I did. Here a few highlights from our conversation.
Could you give me a little profile of your business?
Prudential Fox & Roach/Trident is a real estate brokerage and financial services company that began in 1886 and has grown to become the fifth largest real estate and financial services company in the country. Our business model is get the consumer first, provide a positive experience and then help them add convenience and simplicity to the transaction by offering one-stop shopping in the form of real estate sales and purchase, mortgage banking, title insurance and insurance.
We view our sales associates as our customers. We grow by attracting the best sales people, helping them increase their income and showing them the benefits of having their buyers use our financial services.
Would you describe offering the complete package in the financial services model as a core differentiator?
I think that what differentiates us from 99 percent of the other real estate brokers is our success and our dedication to the financial services model integrated with real estate. There are many other real estate companies that have a similar business model; however, my experience is that they don’t invest the same financial and human resources into mortgage banking, insurance or title insurance as they do to the real estate company. They use them as secondary companies, which inhibits their success.
Could you tell me more about your leadership philosophy?
I think that you want to hire the smartest people that you can find who also have emotional intelligence, and then coach them, mentor them and watch them grow in a way that marries their accomplishing their dreams with our company accomplishing its dreams. So part of that is being able to connect the dots and create a vision — and make it powerful, believable, simple — and then communicate that vision to the entire company through the leadership team so that people see value in it.
A lot of industries — and certainly yours — have had to navigate a difficult time economically the last couple of years. Do you have any insights or tips for navigating the change and challenge we’re still experiencing?
First off, you have to like change — and be willing to see change as a positive experience, which is threatening to many people. Secondly, we had two separate goals: One is to get from here to there in terms of managing through the crisis. And two is to prepare ourselves to take advantage of the upturn when it comes, which it inevitably does.
We were pretty aggressive about cost reductions. But at the same time, we kept our core beliefs and our most important people. There was a limit below which we were not willing to cut into the company because that would have inhibited our ability to grow when the upturn came.
I think you have to help people navigate through a difficult time; recognize that they feel threatened, their incomes are down and so they’re a little scared. You have to think about how do you support them and make them feel confident that yes, we too will get through this, and then couple that with tenacity, perseverance and resilience.
Are there specific things you think can help morale during a particularly difficult time?
I think you need to have a vision that this can be an opportunity. Yes revenue will be down, but it’s also an opportunity to grow market share and be in a better position for the upturn. In terms of our specific business model, interest rates were driven to an all-time low and so we were very proactive in terms of going after refinancing opportunities for both our mortgage banking and our title insurance business.
And I think you have to give people hope.
Earlier, you said something that’s interesting to me: “We view our sales associates as our customer…” What does that mean?
Well, if you look at all the NAR data, what you’ll see is that consumers generally select a sales associate before they select a real estate broker. And so if you accept the fact that the consumer is attached more to the sales associate than to the broker, that leads accepting that we grow by attracting and keeping happy the best sales associates.
In this environment, while we’ve lost exclusivity of the information, we have to change our value proposition. There are two components to that: One is, while the consumer has all the information, they don’t know how to interpret that information to make the best decision, so we need to be a trusted advisor, provide convenience and simplicity and help them make the best decision. Two is we need to be sort of an emotional support system because everything is more difficult and more complicated today.
So part of how we attract and help sales associates grow is educating them to understand that’s what’s important to the consumer today and then giving them the resources and tools to take advantage of that as they grow their business.
What makes a successful sales associate today? When you’re recruiting, what are you looking for?
The best sales associates understand that it’s absolutely critical to invest time daily in business development. People understand that intellectually, but too often, people get pulled apart by the urgent and forget about the important. And so when you’re trying to negotiate deals and get new listings, it’s natural to forget about doing business development on a daily basis.
Have you seen changes in the way time is spent in business development?
I don’t know that the time invested has changed so much as the form. Today sales associates need to be involved in the traditional form of business development, which could be cold calling, utilizing your sphere, going to lunch, playing golf, or whatever they’ve done traditionally. And then as a very separate initiative, it’s all about social media and the Web.
What role does social media have in your business?
Five years ago we invested in excess of $5 million in classified advertising, which never produced much revenue, and today we’re spending about $300,000 and saving some of that money and taking the rest and investing in driving traffic to the Web because over 90 percent of the consumers start their search on the Web, so we need to be there and we need to be top of the mind on the Web.
What other qualities does a top sales associate demonstrate?
Be a trusted advisor, be transparent and don’t be so worried about the sale. Help your clients make the best decision, take care of them, and then the referrals will come naturally.
If somebody was just graduating from college and considering real estate as a career path, is that a good choice and what advice would you give them?
I think that’s a great career path because that’s exactly what I did.
I was 21 and just finishing college and my grandfather was a small custom builder. My grand plan was to take over his business, but he thought I should learn a little bit about people and real estate, so he got me an interview with two brothers, Bob and Charlie Roach, who owned a company called Roach Brothers, which — believe it or not — at that time was about 18 sales associates.
After three interviews, they said they wouldn’t hire me because I didn’t know anybody who had enough money to buy a house and I was too young — nobody would have confidence in me. I said “look I’ll learn more and figure it out.”
And I finally said, “look, what’s the problem? You’re just going to pay me a commission and I’m only going to be here a year or two because I’m going to go into business with my grandfather and I’m going to make money for you.”
Well, one prediction was correct — I made money for them. One prediction didn’t work out so well because I’m still here 48 years later.
So looking back to that time in your life, what kind of advice would you give to that kid or to someone else who was thinking about a career in real estate?
If you’re willing to work hard and you have some good people skills, you’ll have your own business and the opportunities are unlimited. It comes at a price in terms of working hard and making some sacrifices at the beginning of your career, but they pay off over a lifetime. So I think it’s a great opportunity and more young people should take advantage of it.
Do you still love your job?
Of course.
What part of it do you love the most?
I like connecting the dots, figuring out where the future is and helping us to navigate there sooner than anybody else. And I like coaching, mentoring and watching people grow. And I like creating opportunities where people can achieve their dreams by working here.
What’s some of the best business advice you’ve ever received in your life?
Don’t ever ever ever give up.
