When Realty Income Corp.’s Tom Lewis goes to work each day, he’s working for one person.
She’s a 75-year-old retired schoolteacher in Dubuque, Iowa, who has invested her money with Realty Income and is relying on her monthly dividend check for financial support.
Every person at Realty Income is working for that same woman. Employees are coached to work for her from their first day on the job.
“If you can’t relate what you’re doing at this moment to her needs, it’s likely that what you’re doing is not what we’re trying to accomplish,” says Lewis, CEO and vice chairman of the board. “But if you can focus your needs on her, you can relate your overall effort to buying real estate, doing the research on it, keeping the balance sheet in line and generating cash flow.”
Every employee needs to learn it and remember it. Lewis and his leadership team dish out random pop quizzes when walking the halls at the company’s Escondido headquarters.
“We have a little test where we go around and ask people here, ‘Who are we?’ The response needs to be ‘The monthly dividend company.’ Then we ask, ‘Why are we the monthly dividend company?’ and the answer has to be ‘Because there is a 75-year-old retired schoolteacher in Dubuque who needs that monthly check.’”
The retired schoolteacher doesn’t actually exist. She’s a fictitious representation of untold numbers of Realty Income investors who rely on the dividends the company generates to make ends meet from month to month. Without their investments, Realty Income can’t buy the small retail properties in which it specializes or generate the revenue that allows the company to pay out dividend checks. So Lewis decided to put a face on the customers that everyone at Realty Income — which generated $330.2 million in 2008 revenue — serves each day.
It’s part of a larger strategic plan spurred by Lewis and his team to focus the entire company on a single mission and vision for the future. The unnamed retired schoolteacher in Iowa has helped every employee at Realty Income know what their company is, what it stands for and where it needs to go in the coming years.
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