Creating competitive bidding is far more effective than the commonly used wholesale buyer approach.

By Mark Van Ness

Can you start a company with no debt, no private equity investors, and no initial public offering strategy and grow it to be one of the top 10 companies in your industry — all with a strategy of collaborating with all your competitors?

At the age of 30, that’s what I set out to do. Today, SVN is the trusted advisor on over $20 billion a year in commercial real estate transactions — that’s about a deal every hour, 24/7. Perhaps our story will inspire you to see your competitors in a completely new light.

Imagine what it would be like to be trusted by all your competitors. Now, picture the power of mobilizing every one of your competitors to increase the value that you bring to your clients. This strategy enabled SVN to quickly grow into a top 10 commercial real estate services firm, first locally, then regionally and nationally.  

I had previously led a turnaround for a typical investment real estate company that looked at its business as a zero-sum game. Like everyone else in the industry, the company did its best to keep the competition from selling its listings in an attempt to retain the entire commission. I saw countless listings expire or sell for less than they were worth with this all-or-nothing policy, and I realized that there was a better way than this very limited, dual-agency approach. 

SVN was founded on the client-first principle of sharing our fee with the procuring broker with the best offer. Yes, it means we sometimes make less so that our clients can make more. Our clients appreciate that, and their loyalty and referrals have placed SVN among the Real Leaders Top Impact Companies and Inc. 5000 fastest-growing companies several times. 

This concept of making more by making less per transaction can work in other industries as well.

Investment bankers, for example, operate under the same limited competition model with high fees and underwhelming results. By increasing the demand and the number of retail bidders, anyone can increase the sales price of their assets. An enterprising young entrepreneur could disrupt that industry today. This is the basic law of supply-and-demand at work. The more qualified buyers you have, the higher the competition for your asset, so the higher the price and terms you will achieve.  

A few years ago, we put this fundamental strategy to the test. We commissioned an academic study of nearly 15,000 commercial real estate sales over a 10-year period. When the buyer was represented by a different brokerage company than the seller, they generated a 9.6% higher price, on average, than those kept in-house with the same brokerage company representing the buyer and seller. 

It makes sense that no one company can have trusted relationships with the hundreds of thousands of ultra-high-net-worth investors plus millions of high-net-worth investors. And no one brokerage company represents more than a tiny fraction of the market. In fact, the top 10 brokerage companies combined only represented 10% of the transactions last year. That’s why the SVN strategy of collaborating with our competitors to create competitive bidding for our clients has been far more effective than the wholesale buyer approach that the majority of the industry practices.

This strategy would be easy to duplicate, and we only expected a two-year edge before competitors copied us. But 37 years later, they’re still stuck operating in the shortsighted, outdated model from the last century. Meanwhile, SVN has risen from a startup to the youngest player in the top 10 companies in its field. To us, this proves that if you actually deliver more value to your clients and customers, they will beat a path to your door. And if you can find a way to collaborate with your competitors for the benefit of your clients, magic happens. 

SVN’s Core Covenants

A company’s core values provide clarity on what is truly important for organizational success, personal and professional conduct, and what to expect from each other. SVN’s Core Covenants personify its values and culture and differentiate it from the competition.

As members of the SVN Shared Value Network, each employee commits to do the following:

•  Create amazing value with their clients, colleagues, and community. 
•  Cooperate proactively and place their clients’ best interests above their own. 
•  Include, respect, and support all members of the commercial real estate industry. 
•  Honor their commitments. 
•  Personify and uphold the SVN brand. 
•  Resolve conflicts quickly, positively, and effectively.
•  Take personal responsibility for achieving their own potential. 
•  Excel in their market area and specialty. 
•  Focus on the positive and the possible. 
•  Nurture their career while valuing 
• the importance of family, health, 
• and community.

For more on SVN’s Core Covenants, visit https://bit.ly/3H4ypc4.

Download SVN’s 9.6% Report on the pricing advantage of cooperation at https://bit.ly/4aUB0TJ.

Learn how to think more strategically about sustainability as a business driver.

By Real Leaders

GlobeScan is a global insights and advisory consultancy working at the intersection of brand purpose, sustainability, and trust. In this interview with CEO and author Chris Coulter, who co-hosts a podcast about sustainability leadership and business, he explains how companies can think more strategically about sustainability as a business driver.

Real Leaders: Where is society today when it comes to sustainability?

Chris Coulter: We are 40 to 50 years into the conversation of limits, growth, where things are at, and how all of these things are connected. Now, the conversation is more about how we transition and transform into a place that’s going to be more prosperous, more stable, more secure, and more thriving. 

We’ve hit this critical mass threshold at a stakeholder level. Businesspeople, civil society, governments, the financial community, and the scientific community all crossed over a hump a decade ago where we have a collective understanding of where to go. While we have sophistication on the stakeholder side, every day there’s something new in understanding where it goes, how to regulate it, how to invest around it, and how to drive supplier perspectives. Now the debate is how, when, how fast, and where, and we can see the back-and-forth pendulum shifting. 

On the consumer side, we have not engaged the average person on the street in this conversation very effectively. In some parts of the world, it’s part of the culture war between those who don’t want to change and those who do. So on the stakeholder side, we’ve moved miles and we’re at a much more sophisticated place. On moving society, consumers, and citizens, we’re pretty glacial with very little progress overall.

RL: Has the fundamental core driver of business shifted, as opposed to just maximizing share profit?

Coulter: I don’t think it’s transformative, but it has shifted. There have been generational shifts in chief executives, at senior C-suite levels, and even at the board levels that multi-stakeholder approaches to business are sensible, smart, and a long-term success pathway. However, the execution of that has been limited. 

As for fully embracing what a multi-stakeholder approach to business looks like, companies know how to engage investors and listen to investors, and the ESG conversation has been quite catalytic in how companies have responded from at least a disclosure and compliance perspective. As for governments, there are government affairs teams that have had a fracture between traditional lobbying and then policy advocacy that could be oriented toward sustainability — and that’s beginning to move as well. 

But other stakeholders beyond that constellation — communities of impact, civil society, those more peripheral stakeholder audiences — most companies haven’t approached that with a true multi-stakeholder mindset. The ones that do see what’s coming around the corner and how to prepare become future fit for this new reality. And those that don’t can be very successful for a long time until they can’t. There’s an attitudinal orientation and shift and lots of data that’s coming behind it, but the full execution and embracing at some sort of scale has not happened yet. And that’s an interesting place to support business more fully.

RL: What resonates with the multinational companies that GlobeScan works with? How do you convince them that making a difference is good for business?

Coulter: The business case for long-term success equals sustainability, and I can’t think there’s any data, model, or example where that isn’t the case. In the short term, you can make a crazy amount of money, burn bridges, and destroy things, and you can be successful — but in the long term, it’s almost impossible. There’s a great quote by a former CMO at Unilever, Keith Weed, who said he’d love to see the business case for unsustainable business. 

So broadly, the way we meet our clients and engage, we have a shared mind that in the long term, this is what we’re trying to play for and prepare for. Once you begin to plan strategically by looking 10 or 20 years out and ask, “How will consumer sentiments or expectations or sensibility be changing in the future? Who is this younger generation versus the older? What are their preferences? What are their trends?” you can see that it’s being more inclusive, equitable, and sustainable, so that’s the future marketplace.

The problem is that people are so naturally preoccupied with short-term pressures and responses that we can’t get over the hump. Those companies that have been able to create a planning process, an engagement process to have their eye on the long-term, it equals strong sustainability commitment and performance, inevitably.

RL: How should leaders handle resistance to change among different generations?

Coulter: With any sort of generational tension there are new ideas, and the older guard are like, “That’s not how we do business. Let’s go easy. Slow down a little bit.” That’s OK. What’s remarkable is the Gen Z cohort, a portion of them — not all of them because there’s diversity in all cohorts — are remarkably smart, sophisticated, and super passionate about some of these issues that create this generational tension, especially around inclusion. 

As for what’s changing, there are all kinds of conversations. Advertising and marketing have gotten a little more challenging with greenwashing that’s in the greenhushing pendulum. The real shift is that people are feeling that the world is changing for the worse when it comes to climate change. We do lots of consumer public opinion surveys, and in our latest global study, 40% of the world says that they now feel they’ve been very greatly personally impacted by climate change. That’s different than a decade ago when it was less than half of that. 

The biggest obstacle now to sustainability orientation is future discounting. As a species, we’ve evolved to be quite short-term focused. Future discounting is a phenomenon where, if we look too far ahead, we discount the planning toward that. So if I’m a farmer 40,000 years ago trying to eke out a living, I’m not going to be thinking about the next 10 years; I’m thinking about tomorrow or next week. And that has served us well as a species. The challenge with climate and most environmental issues is that if we don’t straighten things out, things are going to get worse, and the worse in the future is a future-discounting problem. 

Now there is an immediacy taking over what people are actually feeling and sensing, which is that things are changing — and not in a good way. This is our moment to try and transform it. The U.S. has the biggest gap anywhere in the world between younger people and older people feeling that climate is having a negative impact. 

As leaders, you have to feel people’s pain, be part of the solution, and show responsibility. Half of us are getting away with, “It’s all inflated. It’s exaggerated. Let’s go back to traditional approaches.” That’s a natural reaction when change is imminent, but we’re going to work through it, and eventually, this is not going to be so politicized. It’ll be a standard status-quo approach to business — but we’re not there yet.


 

Becoming Employee Owned

Looking out for its own sustainability, GlobeScan became an employee ownership trust.

Here, Coulter talks about the decision-making process:

“We’re 36 years old as an organization, but we were at that juncture where we asked ourselves, ‘Do we go to a bigger agency and be sold, do we find a management buyout, or do we do something more innovative?’ It wasn’t an easy thing to do because of the legal and tax implications, and we’re a small organization — just 60 people spread across nine cities in the world — but we’ve grown substantively over the last couple of years. 

“So we chose this idea of an employee trust, which is not an employee-owned framework. It is a separate trust very much like the John Lewis Partnership in the UK where no one really owns it — the trust owns it. As employees, we’re the beneficiaries, and we get profit-sharing because of that. But once we leave, the trust continues and part of this was to maintain our independence, to be an objective voice, and to ride through what’s going to be a very disruptive, exciting, but transformative and challenging multiple decades going forward. 

“We’re trying collectively to think of not only what we’re doing in our work now with our clients, but what about future GlobeScanners? We’re trying to have a very long-term approach.”

Listen to our full conversation with Globescan’s Chris Coulter on The Real Leaders Podcast, Episode 408.

Vital Farms accelerates its growth while continuing to expand its impact in farming.

By Real Leaders

Vital Farms has grown from an idea to the leading seller of pasture-raised eggs in the U.S.

Founded in 2007, Matt O’Hayer set out to improve the standards of animal welfare in an industry with an ethics challenge. There are over 300 million commercial laying hens in the U.S., and around two-thirds of them are caged. The vast majority of them live packed in battery cages, unable to spread their wings, which makes them among the most intensively confined animals in agribusiness, according to the Humane Society.

Instead, Vital Farms raises its hens in pastures with outdoor access year round, focusing on humane treatment. It also looks out for the health of the land through sustainable farming practices. Its farmers rotate pastures and do not use pesticides or herbicides.

“Our mission is to bring ethical food to the table,” says Russell Diez-Canseco, president and CEO of Vital Farms. “We do everything we can to improve the lives of people, animals, and the planet through food.”

The company has grown from a single farm in Austin, Texas, to a national consumer brand that works with over 300 small family farms. More than 24,000 stores across the U.S. sell its products, including standard egg cartons, hard-boiled eggs, liquid whole eggs, and butter (added in 2015). They’re also on the menus of hundreds of foodservice operators across the country. From 2019-22 alone, Vital Farms has more than doubled its employees and increased its revenue by over 2.5x.

From Farm to Future: Vital Farms’ Roadmap for Positive Impact

“We continue to invest in our crew, innovate with our farmers, drive meaningful progress for the environment and our communities, support our consumers and customers, and deliver on our commitments to stockholders,” Diez-Canseco says. “We’re challenging ourselves every day to forge a path that we believe will deliver strong results and positive impact well into the future. We’re committed to raising the standards in the food industry, and as our goals demonstrate, we are taking cumulative steps every day.”

A Certified B Corporation, Vital Farms also provides long-term benefits to its stakeholders. Its core values include transparency and honesty, as evidenced by its traceability initiative that allows consumers to trace each carton of eggs back to the farm where they were laid.

In 2021, Vital Farms started producing some of its eggs using regenerative farming practices, planting certain cover crops and following other practices that revitalize and restore ecosystem functions while regenerating the soil to advance biodiversity, soil health, water quality, and nutrient density. Regenerative practices can result in higher profits for farmers, increase the land’s resiliency, and improve the health of waterways. In recognition of those efforts, in 2023, Vital Farms became the first national egg brand to earn a Regenified verification for four of its farms.

“We believe we should be restoring instead of depleting the earth through the practices we use to grow food,” Diez-Canseco says.

Vital Farms is working toward scaling regenerative agriculture practices to all of its farmers by 2026, as well as reducing carbon intensity in its operations by 25% by 2027. 

A Greener Facility

Here’s a closer look at Vital Farms’ award-winning egg washing and packing facility.

• The building was designed to LEED Silver standards and is pursuing certification with the U.S. Green Building Council.
• Crew-focused features capture natural light and manage engine room humidity.
• A water filtration system allows for water reuse for up to eight hours (30+ wash cycles).
• An offsite underground cold storage facility uses at least 25 percent less energy than above-ground storage.
• LED lights improve energy efficiency by 50 percent.
• Bioretention features clean and cool rainwater, provide for the recharge of local aquifers rather than runoff into storm sewers, and conserve over 700,000 gallons of water per year.
• A solar array was added in 2023, generating close to 20 percent of the facility’s energy usage, lowering energy costs, and reducing greenhouse gas emissions.