Monte Reinert is in the real estate business. What's more, he's in the real estate business in Michigan, where home prices have fallen about 60 percent since 2006. Yet his company, Transnation Title Agency of Michigan, has more than doubled its workforce in the last five years, grown revenues to $13 million, and continues to poach customers from big-name competitors.
How has Transnation achieved sustained growth in one of the nation's hardest hit industries? The answer lies in these four core principles:
1. Joint ventures are smart ventures
The Transnation business model is unorthodox.
It is actually one of nine independent but connected divisions under the Our Family Title Affiliates (OSTA) umbrella. Each division has its own unique location, leadership, and goals. And each one is set up like a joint venture between OSTA and that office's rainmakers -- the entrepreneurial spirits that OSTA has lured away from larger competitors with the promise of greater control, bigger upside, and fewer hoops.
"We've been able to enter new markets by finding rainmakers and giving them the opportunity to have a large ownership interest in the business," says Reinert, president of OSTA. "They are typically local people who are affiliated with a larger national organization. They are quite talented and capable, but somewhat frustrated with all of the metrics and controls guiding them, and they want the opportunity to expand their own horizons."
Of the 150 people employed by OSTA, 60 of them have some ownership interest. That's high.
"We've been profitable every year, so they've received distributions," Reinert says. "That helps our employees feel they belong to a company that appreciates and respects them, and encourages their participation."
2. Acquire for character, train for efficiency
How does OSTA pinpoint the industry veterans it wants to lead its new divisions? Its top criteria are not revenue, or even number or caliber of clients. In the everyone-knows-everyone industry of title insurance, Reinert leans on four decades worth of contacts, including the four past presidents of the Michigan Land Title Association who are advisors to OSTA.
"We are looking for an entrepreneurial spirit, which we can gauge fairly well by spending time with them," he says. "But to understand a person's character we also reach out to their current customers and we ask, 'Are they trustworthy? Do they have good character? Do they have a good reputation? Are they honest and hard working?' That's what matters most."
3. Small service is better service
OSTA competes against billion-dollar nationwide companies with 7,000 - 8,000 employees each. Its marketing budget cannot hold a candle, and its sales staff is a fraction at best, but OSTA continues to grow for one simple reason: pinpointed customer service.
"The advantage that we have is that 'big' gets in the way of customer service," Reinert says. "Our customers are small real estate companies. When you're a big company, you get bogged down in bureaucracy and parameters. As a small company, you can go outside the fences and provides services a big company can't. We'll come in on a Saturday morning to close a transaction, for example. Our competitors will not."
Another example of OSTA's small-company service: It works with five different insurance underwriters, each one of which has its own unique expertise. "For each transaction, we find the one with the easiest requirements to deal with," Reinert says. "In the title business, it's all about knowing who to deal with and where to deal. And trying not to get blindsided by lack of knowledge in local markets."
- 4. Future, present and past employees all matter
Each time OSTA opens a new division, it's got to bring that office up to speed as quickly (and painlessly) as possible on internal accounting, computer, and production systems. Anyone who's overseen staff training knows that training new colleagues is no easy feat while also managing a regular daily work load. It always gets harder before it gets easier.
So OSTA came up with a new training game plan that makes creative use of its retired workforce. In short, the company keeps its retired executives on staff as consultants. Their primary job is to acclimate new employees and teach them the systems they need to run the business.
"When you first learned to drive a car, someone didn't just throw you the keys and send you to the store," Reinert says. "You had someone by your side for weeks and months. That is how we manage change for our newest acquisitions."