Howard W. “Hoddy” Hanna III’s role has changed dramatically at the company his parents started from a single Pittsburgh office in 1957. The chairman of Hanna Holdings Inc. isn’t as involved as much in the day-to-day operations; he’s focused on strategy.
Hanna Holdings includes the subsidiaries Howard Hanna Real Estate Services, Howard Hanna Financial Services and First Priority Mortgage. The family-owned and operated real estate company specializes in residential and commercial brokerage service, mortgages, closing and title insurance, land development, appraisal services, insurance services, corporate relocation and property management.
It is the third-largest real estate company in the nation with $18 billion in 2017 sales. The largest home seller in Pennsylvania, Ohio and New York also employs more than 9,000 people in 262 offices.
With such a vast organization, it’s no wonder that Hanna has surrounded himself with decision-makers who can take on responsibility. But what surprises many people is that of the top 10 people in the company, more than half are nonfamily members.
Hanna says being the face of the company can be both a good and bad thing. It’s amazing how sometimes nobody wants to talk to anybody at the company but him.
“We have a collaborative decision-making organization here. It’s not one or two people,” he says.
The management structure also is very strong with a president in each state and then regional and office managers, for example.
Hanna spends his time looking at where the business is going and anticipating where it needs to be five years from now. Howard Hanna wants to stay ahead of the curve and be a disruptor in everything it does, including technology, which is now one of its bigger expenditures.
Hanna also has worked on the acquisitions of commercial and real estate brokerage firms and mortgage banking firms in Howard Hanna’s eight-state area. The company has completed more than 15 acquisitions since 2015.
“We’ve pretty much grown in concentric circles, building the company from the core in Pittsburgh,” he says.
The Hanna family came to the conclusion about 20 years ago that if it wanted to grow the company — because Howard Hanna had about 20 or 30 percent of the market in metropolitan Pittsburgh — it needed to go to other markets, Hanna says.
A 30 percent market share is actually very good for the industry. He says many real estate firms don’t want to go outside of their community or city because they see it as such a risk.
But it’s only a risk if you don’t know the day-to-day business. While Howard Hanna may not know the neighborhoods or communities, it understands the mindset of brokers, the thought processes and how sales are transacted.
While Hanna can’t see the company operating in a place like New York City, which is a very different animal and would require a huge learning curve, Howard Hanna knows real estate brokers and real estate mortgage banking in the Mid-Atlantic and Midwest.
“You have to know the business you’re making a deal in,” he says. “I know there are people who can buy and operate a steel company, can buy and operate a trucking company, can buy and operate an electrical business, but it’s hard if you’re running the parent company and you really don’t understand that business.”
From a long-term viewpoint
Over the past year and a half, Hanna says Howard Hanna has been working to blend its new companies together into one business. An acquisition won’t be successful if you cannot blend the culture and business model together.
Sometimes, that blending is more difficult, not on the sales side, but with the backroom functions — IT, accounting and human resources. Getting all those clicking together, as well as the individual cultures of the sale organization, is always a work in progress, he says.
Howard Hanna is in such a people business that if the cultures aren’t going together right, you have a lot of problems, Hanna says.