A new Stanford School of Business analysis of Keller Williams Realty concludes that the Austin, Texas-based company takes a blended approach to corporate management and leadership, with a top-down business model but a bottoms-up approach to decision-making.
“While its franchising process is centrally controlled, the company willingly cedes significant decision-making authority to its associates [agents] and relies on culture to ensure that its operating model and people are successful,” reads the nine-page analysis, “How Important is Culture?: An Inside Look at Keller Williams Realty.”
The review is a follow-up to two case studies published by Stanford on the Keller Williams business model in 2007 and 2011.
The most recent review, which was published last month, explains the difference in two distinct approaches to management.
“Corporate leaders pay considerable attention to the strategy and finances of their organization but often less attention to organizational features like decision-making structure and the incentives, values and culture that motivate individual employees to act in the interest of the firm. While a sound strategy and business model are fundamental to financial results, these elements must be implemented by people, and people have their own set of motivations, interests and aspirations. The responsibility of the leader is to devise organizational systems that encourage individuals to pursue corporate goals, when the goals of the firm are not necessarily paramount in their minds.”
The authors of the review, David F. Larcker and Brian Tayan, conclude that KW’s culture is equal in importance to its economic model.
Former KW President and current board member Mary Tennant was quoted: “We know for a fact that our systems don’t work without our culture. We need our culture to reach our full potential.”
According to Vice Chairman Mo Anderson, the culture is “the glue that holds it all together.” In the words of the former executive, “It’s very difficult to separate the culture and the systems, because the systems are written for the culture and the culture exists for the systems.”
The company’s culture encourages interdependent relationships and achieving success through the efforts of others, concludes the report.
KW allegedly has higher agent productivity rates than most other real estate firms, explained by the marriage of its culture and its systems.
So, what are the specific elements of the KW culture? An appendix in the Stanford analysis included an internal KW document that answers the question “What is Culture?” at Keller Williams.
- Making decisions that are right for the Market Center, regardless of individual impact.
- Taking a stand on an issue that is not popular, but is right.
- Being the best co-op associate possible; always respecting other associates.
- Helping someone in the Market Center willingly and with a smile, even though you are busy.
- Doing something right without wanting to be recognized or acknowledged for it.
- Paying a struggling associate’s fees anonymously.
- Complimenting others regularly.
- Being a part of the solution and not the problem in a Market Center.
- Taking the high road on confrontational issues or points of difference.
- Handling a fellow associate’s business when personal or family illness occurs.
- Paying a struggling associate’s tuition to a class.
- Living up to the covenant if you are on the ALC.
- Representing the Market Center and the company in a positive way — always.
- Smiling at others in the Market Center regularly.
- Staying home if you’re having a bad day attitudinally.
- Speaking without profanity.
- Avoiding disparaging remarks about anyone.
- Committing a random act of kindness every day.
- Honoring the policies and protocol of the Region regarding recruiting.
- Giving seven hugs a day.
- Not recruiting associates from another KW Market Center.
- Being willing to walk away from a transaction that compromises your principles.
- Being considerate of the staff.
- Paying your Market Center bills on time.
- Not looking for loopholes in Cap and Royalty payments.
- Responding to clients’ calls and concerns in a timely manner.
- Considering the other person’s viewpoint before reacting.
- Following the model.
- Being excited about saying, “Will you promise to take my Team Leader’s call?”
- Implementing the Keller Williams productivity systems.
- Finally creating the budget you know you need for your business.
- Not only learning but living the WI4C2TS.
- Putting God and your family first, and the business second.
- Understanding that the higher purpose of business is to give, share and care.
- Building your level one Profit Share downline to 15, as soon as possible.
- Lead generating for 3 hours, every day.
- Using a monthly Profit and Loss Statement to analyze your real estate business.
- Hitting your monthly and annual production goals.
- Profitability in your personal real estate business.
- Be nice.
