Dan Duffy: The One Big Question To Ask Prospective Real Estate Agents
Sick of the buzzword “Culture’? We are too. United Real Estate Group’s CEO Dan Duffy offers tips on encouraging creative thinking in your organization to drive company culture, his fave leadership books and the big question he asks prospective agents to determine if they’re a good fit for the company.
Listen or read the full podcast interview below.
This is Tracey Velt, editor of content for REAL Trends. Today, we’re speaking with Dan Duffy, CEO of United Real Estate Group about how to recruit to your culture, the top questions to ask potential new hires, and how to encourage creative thinking within your real estate leadership team. Dan was named a 2019 REAL Trends GameChanger for his innovation in building a unique array of real estate services such as an auction company and a rapidly growing new division called United Real Estate which has about 70 franchise offerings and a flat fee model.
Tell me how you got started in the business and ultimately came to run your brokerage.
Okay. So I was previously running what was at the time the world’s largest Microsoft custom systems integration and software development company in 2005 and then one group of partners bought out the other group of partners and I took a little bit of time off after we sold that company. I was looking around and I was looking for a platform company in a certain industry where I thought that my resources and my skills would be helpful. I saw the real estate industry and I kept looking back at it and I thought, my gosh, a lot of things that we had done from a technology perspective, we had 12,000 clients in 48 countries, and I kept looking at real estate and I’m like, man, there’s a lot of work to get done over there, from a technology perspective.
And then I looked at the brands and they were very egocentric as opposed to consumer centric. And then you look at the market and the market hadn’t had the technological innovation that you saw in a lot of other industries. And I thought, ah, I think this is an interesting play. And United Country, which was the company we bought in 2006 was a very culturally-rich company with an 80-year heritage. And I thought, what a cool company, nice people. And at the time, I dabbled a little bit in real estate, but I thought, I think I can go into the industry and I think I can go into that company and I can help, and I think it’ll be really fun, and I think it would be an opportunity to help some great people do some cool things.
So I put together some partners and we bought the company in 2006. And then off of United Country we set upon improving United Country, improving all the good bits that were there and not breaking anything that was in place and working really well and improving it, putting in technology, rebranding, repositioning, hiring new people for program delivery, training, et cetera. And then we got curious. And when we got curious, we started launching what we would consider strategic extensions. And so we launched the auction business. And then in order to support the auction business, we launched the marketing company. And then shortly thereafter we started the technology company and we started building proprietary technology platform that we currently enjoy. Really what Gary Keller and these guys are announcing right now that they’re making a big splash, we’ve had it for five years.
We just don’t pound our chest and say we’re going to be a technology company because at the end of the day we’re a support for professional real estate agents and brokers. And while we happen to be very good at technology, at the end of the day, we’re supporting professional real estate folks and we’re delivering technology. But we completed our technology platform and then we launched United Real Estate, which was the residential urban, and we launched a private brokerage and we launched our international affiliated groups. So all those things have been done in the last 13 years, which is, I can’t believe it, but it’s half of my career has been in real estate, which I’m seasoned now.
That’s right. So just describe your successes from 2006 until today. What would you, how would you quantify your success with the brokerage? I think there’s tangible, and there’s objective and subjective ways of looking at that. So the subjective ways of looking at it is, I know that there are thousands of families that have been positively impacted by the improved program, the tools, the marketing platform, the technology. We’ve allowed and partnered with agents and brokers and allowed them, not allowed them, but empowered them to make a better living for their families and there’s thousands of them, right? Not a couple, there’s thousands and thousands on the United Country. We help them secure listings at a preferred commission structure because our program is differentiated and powerful, and so their margins are better than what they were before we got on board, so that’s huge. The productivity per office, the productivity per agent, is well in excess of the peak of the market, when the market peaked before the crash. So we know that they’re making more money, their realized income is much higher.
And then on the United side, once again, we have thousands of agents that have joined us and they keep 100% of their commission, so I know that their margins have improved. The brokers that are affiliated with us can grow and they can grow profitably. And so those are more subjective. If you really want to look at, a lot of times people say, Oh well what’s your success? And they just want to look at financial metrics. When we first bought the company we were doing, Oh, I don’t know, maybe at the peak of the market, we were doing 750 million or so at the United Country. And this last year we did 8.5 billion, and a billion and a half of that growth was in the last year we onboarded a little under 1500 agents. And that’s all organic growth, no mergers and acquisition yet. But that’s now the growth curve is starting to bend. People are aware that United is out there, they’re aware it’s substantive, they’re aware it’s not a poof company.
We’re an innovator from inside of the industry as opposed to some of these interlopers that come in and try to steal our margins. And so we think our innovation from the inside is paying off and we’re seeing it in our numbers. Our growth last year was absolutely outstanding and we expect the same. Early results from January are showing that our growth continues and now we have the ability to accelerate that growth now that the technology platform is mature and it’s in place and the whole program is rock solid on all of our business units. So it’s going well.
Well great. So how do you encourage creative thinking within your organization? Well you have to have it as part of your core culture and so everyone you hire, we have our values and guiding principles, and one of them, which most directly speaks to creativity, is seeing things differently. We believe that the future holds great promise to those who see things differently. And so we embrace that from the moment that we interview people to join our team. We look for that when we look to affiliate with a broker. We try to determine that our agents are curious about what their potential is and what can they realize that. So it pervades the entire culture, creativity and I would say curiosity, and I think curiosity is really the theme around here. We like to hire curious people, because I think everything great starts with curiosity. Without it really nothing big ever happens and you sure as hell don’t improve the current human condition. So you have to start with the question. How do you discover that though? How do you discover that in someone? Well it’s interesting, you ask them about their life story. Did they go the safe path or did they take a risk or two here and there. Are they willing to take a leap of faith on something that doesn’t exist today? That we all agree on what the vision is. And it’s interesting because as you have the conversations in an interview, people will self-select. The non-curious folks will be very uncomfortable with the fact that it’s not certain, it’s not guaranteed, and we have to figure something out, we don’t have all the answers. A lot of times when we’re setting out to start a new company or endeavor to improve the program with something that no one else in the industry has ever done.
And when you talk to somebody, you’re interviewing for everything from a web development position, a developer, or just the program delivery or a trainer or a business consultant, you ask the right questions and you ask them about their background and what risks they’ve taken in their life. What calculated risks they’ve taken, what was their experience, did they have a positive experience, did they learn anything from it. By the time you’re done having a conversation and you know how to smell a curious person, you get to the other end of it and you’re like, that person’s curious, let’s rock.
Okay. Okay, great. So what has been your most memorable moment? Good or bad as a broker? Huh. That’s a tough one. That’s one where I would have liked to have had before we got on the phone, because I think it would have given you … hold on a second. Most memorable moment as a broker. I’d say I think, boy that’s tough. I think there’s about 20 of them that are bouncing around in my head. I would say when I realized that the programs have improved so much that we were able to secure a listing with one of our offices. The program worked as designed and we were able to help them secure a $1.2 billion destination resort development as a listing. Okay. Wow. That’s awesome. Yeah, and it was incredible because the local office identified it, we coalesced the resources that were right at our fingertips. We didn’t even have to break a sweat and then seriously, because we had all the systems to be able to accommodate listings that big all the way. And so I think what was proof to me was that the program that we built was different than everybody else’s, and it was something that the clients appreciated. And that same program is available to somebody with a hundred thousand dollar house in Kansas City. Okay. Yeah. That’s interesting. Yeah. And I’d say the other one, which was more recent, is we really turned on the power of the network, because a lot of people talk about, Oh, we’re big. Well, who cares unless it actually benefits the agent. And so I think the launch of United Referral Network, our inter-company agent-to-agent referral, which is facilitated with technology and cross-shares people, actual live people that connect people cross-country.
When we reached, like in the first year, we reached a thousand opportunities that were handed from one agent in one office to another agent in another office, with a facilitated concierge white glove approach. When that reached a thousand within a year we realized, holy crap, this is a huge opportunity for our agents to serve their clients better and make money on things they previously let slip through their fingers, and it was relatively easy to execute. And it’s something that I was very, very pleased at how fast the program was adopted by agents and how much they valued it and how much money it put in their pocket, I loved it. And so everyone won, and it happened and it launched super, super fast and it was an easy execution. It was actually not that complicated to do.
Okay. We’re going to switch gears a little bit and talk about real estate in general or leadership in general. So what have you found to be the biggest challenge facing leaders today? I think it is human capital management. And it sounds like an over-trodden term, but it truly is everything. And I think it’s not just the team that we have at the home office and we purposely don’t call our home office corporate office, we call it the home office. And that’s culturally consistent with who we are. We’re not a corporation, I mean we are a corporation, but we’re not a corporate entity. We intentionally culturally don’t, we have the home office. So it’s human capital management, but it’s not just with the employees you have, it’s also with every agent and every broker, and maintaining curiosity, maintaining motivation and giving them promise of a demonstrably better future. And I think it’s not just the promise, but the ability to back the promise up. And that requires human capital to be aligned, and it requires it to be culturally aligned, how you act when no one’s watching. All of those things come into play.
And the human condition is really a fascinating thing; what motivates people? And it’s oftentimes not what you think. If you think that money’s the biggest motivator, and obviously there’s thousands of services that say that isn’t the case. But I will tell you that human capital management, both with our staff and team members that work for us, that have that get paychecks from us, and also with the agents, knowing that we’re all in this together and we together are smarter, better, faster than we are alone. And that includes me and park your damn ego at the door. It’s not about you, it never was about you. So the minute you acquiesce to that, and I tell you, in my chair especially, I see way too many CEOs and presidents of companies have these distorted perception of self.
I will tell you—it makes me highly uncomfortable. I know it’s just the way people do it, and no offense, but even this award, it’s always pointed to the CEO, right? And if you noticed in our press release that we did, following up in our internal press release, we converted that into we, every agent, every broker, won this award. And I think that it’s critically important to make certain that you dissolve your ego, you really understand that better things happen when it’s “we.” It doesn’t mean that sometimes you don’t have to come down and make a damn decision, I mean, that’s just part of leadership. Sometimes there needs to be a breaking vote and sometimes quite frankly, you’re pulling the organization towards a vision that they may or may not have helped build at first, but they’re being asked to come along for the ride.
So, you have to get their alignment and you have to get their buy-in so that they get passionately and emotionally motivated to participate, not just with the directions given, but creativity. How do you unleash the power of every single person, and you’re not perfect at it every day. I mean sometimes, I know that there are certain individual contributor roles that probably get frustrated because they’re being given directives because they play a certain role in the organization. But it doesn’t matter from the receptionist to whatever, everyone’s got good ideas and you better keep your ears open. And if you don’t listen to the agents and you don’t listen to the brokers, you’re going to miss something important.
Yeah, definitely. Okay. So what are some, I’m skipping around on the questions a little bit because I want to focus on the same topic, but what are a few resources that you would recommend to someone looking to gain insight into becoming a better leader, any books that you read, any trainers you follow, anybody who you particularly like? I’ll give you three, but I don’t know if Steve told you this, but I’m a super voracious reader.
I’ll read anything. Be careful what you put in front of me because I’ll read it. I purposely buy magazines that aren’t targeted to me, whatever my sociodemographic profile is. I purposely will buy a Cosmopolitan every once in awhile and read every single ad in it.
I’m going to give you three, because I have five boys, and I am constantly feeding them books and my favorite three, if someone came to me, let’s say one of their friends came to me and said, Dan Duffy, can I borrow three books from your library? And I’d say, yeah, which ones would you recommend I read? I would say Philip Kotler, Marketing Management, that’s a Keller textbook. It’s absolutely phenomenal. It talks about marketing and it’s juxtaposition to strategy and pricing and everything else. It’s probably the most exhaustive case study summarization of how to think about business succinctly and Philip Kotler was a genius.
Okay. I would say more contemporaneous to where we are today, the best business book printed in the last 10 years is no doubt Zero to One. Zero to One, Peter Thiel is a genius and he is a bigger … his thinking is so crystalline and so original. It’s totally contrarian, but not just to be contrarian, he’s right. In the modern business climate and the way that the economy is moving and the way technology has changed so many things, that book prepares you for what is today and what will likely be the conditions under which business will be conducted for the next probably five, 10 years. It is the most important business book in my mind. The way to think about monopoly power, the way to think about a lot of things.
I would say you have to read Sun Tzu, if you’re in a competitive landscape, if you have to be well-versed in Sun Tzu. And I think that’s probably enough. I’ve got more, but I think those are … Oh, here’s one other one it’s esoteric as hell. Getting back to the human condition in worldview, by far the best idea on this is a book, it’s an obscure book called Spiral Dynamics, and it’s written by, God I can’t remember who wrote it, but it’s phenomenal about the … it’s a different cut and it’s a heavily researched piece that’s not necessarily an easy read, but it is a little heady. But you read it once, you put it down and read it again. And Spiral Dynamics, if you’re ever struggling to understand how to communicate with others and how people think and why they think the way they think, which is huge. Because I have a psychology degree. I have a degree in psychology, anthropology, finance, marketing, accounting and strategy.
So undergrad I had accounting, anthropology and psychology. Grad school I had marketing, finance and strategy. But I would say the most powerful of all of those in the end for me has been anthropology and psychology. And it doesn’t seem like … finance to me is just numbers, right? If you have a basic numerical brain you can figure out unit economics of a business, you can run cap tables, you can do whatever the hell you need to do. You can see whether or not the business is worth building.
Right. But understanding the human condition, and not just the human condition as it exists on the surface today, but how it existed 5,000 years ago in what you learn from the bone fragments of pre-hominids and whatever else and animals and how they organized societies. Oh, there’s one other one that, another book, sorry. You got me all excited and it’s called Sapiens.
An Israeli guy wrote it and it’s been translated into a bunch of different … It’s absolutely … The first 300 pages or 250 pages are phenomenal. You can drop off the last a hundred pages, he starts to speculate and it gets a little silly. But the first 250 pages are absolutely stunning, stunning. But anyway, but I would say Spiral Dynamics is a super important book for understanding the human condition and how people think the way they think and why they think the way they think. It’s really calmed me a great deal. You know, this stuff going on in our political climate right now today is people need to read Spiral Dynamics.
Yeah. Okay. I’m going to read it because it sounds interesting. Yeah. I’ll let you know my take on it. Yeah. Good, good. Seriously, read it and tell me what you think. Yeah, okay. So obviously reading is one of three things that you do that you could attribute to your success. What are a couple of other things that you do? Do you have a morning routine? Do you have a specific … do you do your gratitude every morning? Is there anything that you do that you feel sets you up for the day? Yeah, I purposely have my private alone time to think and to kind of get ready for my day. I try not to schedule any appointments before 9:00 AM, because I want to wake up and I want to prioritize and clear my mind. And I also have just a morning routine where I will not allow any of the challenges, trials, tribulations, or even opportunities to come to the surface and start to be processed until after I’ve had my morning routine, had a shower, gotten dressed, and then I’ve had a chance to calmly prepare myself. And then it’s almost like in the movies where they take their fingers and they kind of go, bring it, right? Right. And then everything runs smoothly. And I do do this every day. If you want to ask me what my real secret is to this and I try to train it for agents and stuff. I’ve been sharing it for 12 years now, 13 years, and it is imagine a triangle and you wake up in the morning, I reset to a 10 every morning. Okay. So, I leave my house, I leave the hotel or wherever I am and I’m a 10. I’m projecting, I’m a 10 and I’m expecting a ten from the world and life and everyone around me. I project a 10 and then the world is going to give you a 10 or they’re going to give you an eight or a seven. You might not win a deal. You might have a horrible day, you might have something unfortunate that happens and maybe the world throws a five at you and then you go back to your house and you go to take your nightly rest. And a lot of people will carry that from the day before and they’ll wake up the next morning and let’s say the last day gave them a five and they wake up as a five. What are they going to project to the market? They’re going to project the five. Right? What’s the most a market will reward you if you project a five — a five. Right. Every day I reset to 10. Okay. It’s a very religious process and I’m like, yep, yesterday blew, but I’m resetting to a 10 and we’re going to start there. Okay. Yeah. And I also have, there’s a lot of people that I’ve noticed and I think maybe some of it again gets back to some of the current climate if you pay too much attention to the news or some things you just should ignore it because it’s just dribble. I like the concept and I’ve never really seen anybody write about it but the way I basket it is the projection of positive intent. In other words, anything anyone says or does, even if it seems like as egregious or aggressive, not in my best interest, I always seek to understand and I always assume that what’s being done has positive intent. Right. And so- Yeah. In other words, don’t assume because someone had a grimace on their face and they said, Hey, I want you to do X or Y or I’m not going to do X or Y that they have negative intent. They might just have a different objective function. Right. So, you have to assume positive intent from people. When you have a negative intent that triggers insecurity and it triggers a spiral down into a place which causes everyone to tense up and everyone to get a lesser outcome. So you avoid the insecurity spiral and you stay with positive intent. And typically people respond to that and they’ll say, okay, you know what, he’s treating me fairly, the company is treating me fairly, I know they have my best interest in mind. They might not be perfect, they might’ve made a mistake, but let’s have positive intent that we’re going to fix it together. Right. So anyway, I don’t know if that all makes sense, but God, I almost want a summary, I almost want this recording so I can give it to my kids so they can say, Oh, well that’s what dad thought about life. I’ll give you the transcript. Oh, great. That would be awesome. Seriously, I’m not kidding, I really would like it, if you don’t mind. Sure, sure. So what’s the biggest risk you’ve ever taken? Whether it’s failed or succeeded, it doesn’t matter, just the biggest risk? Hmm. And it could be personally and not just professionally. Yeah. I would say probably the biggest leap of faith/risk was probably deciding not to take a job as a senior executive at Microsoft, which was kind of guaranteed permanent wealth and a lifetime of whatever, and electing to buy United Country. That was probably the biggest leap. Okay. Yep. And tell me your top lesson learned while you were building the business. Let’s say it goes back to the most important thing is human capital management. It’s critically important that you are patient to identify, and even if it means you leave a position open indefinitely, that you identify the right people.
Yeah. Because with the right people, you can do a lot of great things. With the wrong people it bogs you down and it’s distracting. And so you’re going to make mistakes every once in awhile but, when they happen, I would say, probably take corrective action as quickly and pragmatically and fairly as you can. But human capital management and I would say the importance. I always knew it was important and it’s super-duper important because it ties into culture, it’s the backbone of culture. And it’s critically important that you not compromise as it relates to … it doesn’t mean you all have to be robots and you have to be exactly the same, it just means that you have to have a frame, your cultural frame, that everyone agrees to operate in. And when you see deviations from that, you want to take fair but immediate action to correct it. Okay. And here’s my last question. And I may have asked you this before because I tend to ask this one a lot if I like it. Tell me about a childhood or teenage experience that shaped the person you are today. I think if you asked me that question five different times, I’d probably give you five different answers. Yes. It was probably, for some reason I have this … I was raking the leaves in my yard in Louisiana and my father was a NASA engineer in charge of the space program for Chrysler corporation, a big imposing guy. I’m probably seven years old and I remember my sister and my brother and I were all out there and they took off and went to the pool and I kept raking and then we were bagging it, it was oak tree leaves, right. So there was remnants all over the place where we had piles and we’d put it in bags and I was out there with my hands picking it up, the last little bit and not just trying to use the rake and get the big stuff. And I sat out there for about 20 … I didn’t know my father was watching, he was trimming the bushes and I was picking up the remaining leaves, and I put every single last one of them in the bag and I tied it off and carried it in front of the driveway.
And I didn’t even know he was watching and he said when I came in and I was in the kitchen, he walked up and he goes, I just watched you do something that’s going to make all the difference in the world. You actually cared and did the job correctly and completely. And it was such a compliment as a little kid. And then he threw my brother and sister under the bus, he said those ding dongs took off and went to the pool.
But it was interesting because it made me want to maybe either get that acknowledgement, but it also made me proud that I didn’t want any acknowledgement, but it came anyway. And I thought, be careful what you do when you think no one’s watching and do things correctly, even though no one’s asking you necessarily to go the extra mile, go the extra mile.
Right. Yep. That’s great advice. So, yeah, this has been great. Okay, perfect. Well, thank you very much and again, tell Steve we love him and I owe him a lot of gratitude in a lot of different ways, and he has no idea how much he’s impacted our ability to do what we’re doing. He’s been encouraging. He’s been a good counselor to us and we really appreciate it. Great. I will pass that along. Okay, well thank you very much. Have a great day. Have a great day. You too. Bye. Bye. Bye.