Realty check Featured

8:00pm EDT July 26, 2008

Karen Derr is a tightrope walker.

That’s the feeling that Derr gets at Karen Derr & Associates Realty Inc. as she tries to balance growing her midsized real estate firm and staying small enough to innovate.

“People start trying to buy you or merge with you, and there’s this lure of getting bigger and bigger, and yet, you have some assets and resources that are very difficult for a very small company to have,” says the founder, president and CEO.

“Staying at that plateau in the middle gives you the advantage of being able to move and innovate much quicker than a large company.”

Her other advantage is that when she founded the real estate company, she did it all, so she understands firsthand what her five full-time employees and 55 independent contractors are experiencing, which helps her make educated choices for her $152 million company and maintain a bond with her employees.

Smart Business spoke with Derr about how she motivates her staff and rewards accomplishment.

Consider your guest list. Don’t hire anybody that you wouldn’t want to have dinner with. When you’re new and trying to recruit, you take almost anybody you can get; it’s a necessary evil, but it’s just not pleasurable. 

It’s not fair to hire the person if you’re not really compelled to spend time with them. That’s not fair to the salesperson and your customers, and it’s not fair to you, either, because you have to spend a lot of time with the people that you hire.

As we started to grow and become successful, we started to spend more time with the people who are the key to our organization. I said, ‘Wow, this is what it’s all about. It should never be any way but this way. All of us are enjoying our business and each other.’

It just evolved after finally getting it right. We’re a diverse group of people, but you can have synergy in a group without everyone being the same.

Jump into the trenches. I’m out there every day, shoulder-to-shoulder with my employees. For a midsized company, the competition is so fierce that you have to be out there every day.


You can’t arrive as the owner of a company and assume that what your sales force is up against is the same thing you were up against a year ago, sometimes even six months ago. If you’re not in front of clients, just like your salespeople are, you could easily lose sight of what’s going on.

Stay in focus. Being in front of clients helps your competitive edge. Maybe that’s how I keep in touch with reality. I hear firsthand what our clients like and don’t like and what they’re saying about our competition and how we’re competing.


If we don’t get business, I ask why. We’re so focused on innovation that we see it as a great opportunity. We’re always looking for something extra that we can do better or do faster.

Successful companies don’t have time to do big market research projects. The better you can bring back information from clients and salespeople, the quicker you can make a strategy based on that and the better off you are.

Don’t be afraid to turn down business. We have a mission statement about who we’ll do business with and who we won’t. If there’s not a high level of ethics with our clients, we won’t do business with them. It’s hard sometimes because it’s so competitive and you want that business so badly, but we all know that when there’s a problem, we will look at each other and say, ‘They’re going to have to find someone else to do business with.’


That empowers my sales-people. They know that if they come to me and they say that they’re having a big problem with a client, I’ll say, ‘Don’t do it. Tell them to go somewhere else.’

Skip the weekly sales meeting. We send out a little e-mail communiqué four days a week, and salespeople participate in weekly e-mail discussions that are almost always geared toward adding value for our clients. We don’t have weekly sales meetings at all.


When I worked before at places that had them, they were dull and a waste of time, and the top producers didn’t want to come. I didn’t enjoy it when I worked as a salesperson for another company; I didn’t see they were of use. We do a lot of things by e-mail where people can respond after they’ve really had the time to think about the discussion at their own pace.

Set goals and acknowledge hard work. In contrast to competitions and contests, a lot of people respond really well to one-on-ones and personal goals that we set together. If I notice that they’re falling short, I’ll sit them down again and say, ‘This is not where you want to be.’


When I see that they have reached their goals, I acknowledge them. Many times, it’s just personal congratulations and maybe going out for a drink. We also give laptops or private office space when they reach certain goals.

It’s important to me for a lot of different reasons. When you’ve come up through the ranks and you’ve done the exact same job they’re doing, then you genuinely feel an amount of thankfulness and gratitude. When you start a business, you always feel gratitude when money comes in that you personally didn’t have to go make.

HOW TO REACH: Karen Derr & Associates Realty Inc., (800) 656-7653 or