TrueNorth Companies CEO Duane Smith, shown in his Cedar Rapids office, has led the company from a business with only $9 million in revenue and 96 employees when it was founded in a three-way merger to a company with a projected $86 million in revenue and 385 employees in 2019. PHOTO TRUENORTH
By Dave DeWitte
dave@corridorbusiness.com
Duane Smith speaks with the authority of a business professor about concepts like structured entrepreneurialism, building a legacy company and the entrepreneurial ladder.
Yet, the CEO of TrueNorth Companies, voted this year’s Most Influential Leader, is at his best when he talks about developing the people around him.
“What gets me up before the alarm clock is to really help people embrace their vision, and then instill confidence in them to succeed,” the veteran insurance executive and entrepreneur says. “So, as long as I’m doing that, I’m energized, everybody around me is energized, and I’m making a difference and have a well-defined purpose.”
At his quarterly meetings with new employees, Mr. Smith hands out copies of a five-year personal and career planning guide. He expects every one of them to fill it out, because he believes everyone needs a goal and a plan.
TrueNorth’s corporate success is a reflection of those deeply held beliefs. The business was formed in 2001 in a merger of three local insurance agencies. Since then, it has grown from $9 million in revenue to about $86 million, and is closing in on a $1 billion sales goal.
That’s astonishing, partly because independent insurance agencies tend to be transient entities, rising on the talent of one or a handful of sales managers and agents, and just as often dissolving when the majority owner retires and sells their account books.
“Duane has had great vision, growing the agency and planning for smooth succession in an age when many don’t, and have to sell out to larger out-of-town agencies,” said longtime friend Randy Ramlo, president and CEO of UFG Insurance. “Duane has also spearheaded many acquisitions around the country, expanding the TrueNorth footprint.”
[See the full 2019 Most Influential list in the CBJ’s Dec. 23 digital edition. >>>]
Loren Coppock was one of TrueNorth’s founders who helped pick Mr. Smith for the leadership post.
“We agreed on some common principles,” recalled Mr. Coppock, TrueNorth chairman. “Among the first of the decisions was that we thought a successful firm needed professional management, not just the part-time leadership our sales leaders could provide in their spare time.”
Mr. Smith was the easy choice for the job, having shown “uncommon insights on what it takes to build a successful company,” Mr. Coppock said. He gave up his own book of accounts, and, although the youngest of the owners, dug in for the job of creating a “legacy company” that would endure beyond the retirement of its founders.
“From the beginning, Duane’s sense of vision has been incredible,” Mr. Coppock said.
TrueNorth’s board set measurable goals in four areas called Critical Indicators and started on the company’s first 10-year plan. It also embraced an entrepreneurial model that would be attractive to high-performing talent.
The model has elevated 58 individuals to ownership status in the company, as TrueNorth has expanded from 10 profit centers to more than 120.
‘Mayberry’ and the power of influence
Mr. Smith feels fortunate to have grown up in the small town of Lamont, Iowa, which reminded him of the town of Mayberry, depicted in the “The Andy Griffith Show,” one of his favorite early-childhood TV shows.
The sitcom depicted the characters and life of a quiet town, and the influence of the kindhearted sheriff, Andy Griffith, had on his son and the people around him.
In Lamont, Mr. Smith’s father was the town banker, his grandfather the town plumber. There were very few people he didn’t know well, and his parents shaped his values, including the importance of empathy for others. He went to a small school, Starmont, and was successful in sports.
“One of the first times I realized how you can make a difference, and have an influence on others, was probably my sophomore year in high school,” Mr. Smith said. “My high school football coach shared a paper from one of his grade school students. The assignment was to describe someone that you respect and want to be like. His student said he wanted to be like me, and up until that moment I’m not sure I really gave much thought to how my actions could influence others. That experience helped me understand the difference that your everyday actions can have.”
Today, Mr. Smith laments that modern media rarely provides the kind of character-building lessons built into “The Andy Griffith Show.” But he tries to model the kind of influence that can help those around him realize and reach their goals.
“One of the keys to being able to influence others is the capacity to first listen and seek to understand people and issues,” he said. “Generally, without a clear understanding of the facts, you are not in a position to give direction or influence outcomes.”
A big influence in Mr. Smith’s career has been leadership coach and author Dan Sullivan. For close to 15 years, he’s followed Mr. Sullivan’s advice such as “lead to a number or event” in order to get everybody strategizing and working toward a common goal. He’s fond of quoting Mr. Sullivan’s 10 Laws of Lifetime Growth, such as “always make your questions bigger than your answers,” and “always make your purpose greater than your money.”
When Mr. Smith was asked to speak to students at his old high school, his theme was “a goal without a plan is just a dream.”
“A lot of people want to be a doctor, run a marathon or make a million dollars, but if they don’t have a plan, what is it – it’s just a dream,” he said, recalling the message. He handed out copies of the five-year personal plan guide, and offered $500 scholarships to the students who filled it out to the satisfaction of their teachers.
Widening realm of influence
Mr. Smith’s influence has gone far beyond the worlds of entrepreneurship and insurance in his time at TrueNorth.
“I’d put it this way – Duane is a gifted leader and he has been able to transfer those skills to the nonprofit arena well,” said Jack Evans, chairman of the Hall-Perrine Foundation in Cedar Rapids. A longtime friend of Mr. Smith who has shared pheasant hunting trips and whose son works at TrueNorth, Mr. Evans has had plenty of chances to observe his leadership style.
“He’s a gentleman who is very organized, can outline a vision and can bring a group together to realize that vision,” Mr. Evans said. “He knows who the players can be and he can outline the mission…. He’s just a gentleman with a big heart.”
Mr. Smith’s nonprofit work has taken him into board leadership roles at Tanager Place, the Cedar Rapids Metro Economic Alliance Policy Board, and more recently, the foundation for the University of Northern Iowa, his alma mater, among others. He is also chairman of the Motor Carriers Safety Foundation, an organization he helped start about six years ago.
Self-knowledge is important in understanding how to give back, Mr. Smith said.
“In a perfect world, if you can understand and embrace what you are exceptionally talented at, your influence will be at its highest,” he said.
Sharing entrepreneurial lessons
One of the reasons for Mr. Smith’s influence is his success – and some setbacks – in his many entrepreneurial ventures apart from TrueNorth.
Mr. Smith has invested and held leadership roles in all kinds of businesses, ranging from security companies to car washes to real estate. At present, Duffy’s Collectible Cars, a classic car business he acquired not long ago, is one of his passions, and he often finds himself compulsively scrolling classic car websites to find good purchases.
“I think at some point, I was probably involved in 10 or 12 companies in an ownership capacity, and half of them would come in every month and drop off a check,” Mr. Smith recalled. “The other half would come every month and ask for another check, and I thought, ‘why is there always one group that’s successful, growing the business and not creating noise, and another where there’s always a high level of noise and some excuse?’”
He concluded that there were five characteristics that differentiated the successful: A strong vision, leaders who can communicate the vision and instill confidence to execute it, a sound process or blueprint to execute the vision, strong management to oversee that process, and a dedicated team of employees or contractors to deliver the service or product.
That realization came about after many mistakes that Mr. Smith tries to remember and not forget. He calls them “tuition payments.”
“When I’m trying to influence somebody, I probably talk about my mistakes more than I do my accomplishments,” he said. He admits that the expense is harder to embrace than a real college tuition payment, but adds, “as long as you’re learning from it, you get a return.”
Some of the many lessons include knowing what to expect.
“As an entrepreneur, you go through different ceilings of complexities,” Mr. Smith said. “And you either have to decide how to scale the wall, sell or plateau.”
Such “fork-in-the-road” moments can shake your confidence, he added, leaving hard questions about whether to continue investing, to try to reach another level in sales, or to come up with new solutions for clients when it can require considerably more investment and energy.
“Now, we understand that’s just another evolution you go through,” Mr. Smith said, adding they’ve even coined a term for it at TrueNorth: “permanent whitewater,” a reference to the wild ride rafters experience going through rapids.
“There’s always whitewater,” he explained. “And you’re always kind of looking for this pool of tranquility. But in this day and age for most businesses, those pools of tranquility are few and far between.”
A big transition ahead
As he hits age 62, Mr. Smith is now facing the mandatory age to begin turning over his leadership seat at TrueNorth under the system that was developed to make it a legacy business.
Two years ago, the company named Jason Smith, Mr. Smith’s son, as president, and announced that he would take over as CEO in 2020 after about a decade growing TrueNorth’s Transportation Division, which serves the insurance needs of trucking companies.
Interviewed last year, Jason said he’s had plenty of experience of his own, and tells people it feels like he’s worked “with” rather than “for” his father. He is constantly aware of his father’s example, however.
“One of the things that makes him a phenomenal leader is that he’s always coming at it from a perspective of respect and ‘how do I help other people grow?’” Jason Smith said.
In his early 50s, Duane Smith said he realized that TrueNorth was too reliant on decisions made by him, a point that was driven home when he arrived at his office door one day to find a sign on it saying “Judge Wapner,” – the name of the dictatorial judge who decided every case in the reality TV show “The People’s Court.”
Since then, he’s been working to create a more self-managed environment where people are free to make their own decisions, based on TrueNorth’s Critical Indicators. He didn’t know at first if Jason wanted the CEO’s seat, and it took him about six months of deliberation to decide he wanted to take on the challenge of leading the enterprise. Then, a four-year plan was created to ensure he was ready for the responsibility when he assumed the CEO role.
“We’ve moved responsibilities to him, so my schedule’s much freer, his is not as free, and the goal is in January that he will take over,” Duane Smith said. When that happens, he and his wife are planning an extended vacation, but then he’ll be back on an almost daily basis as chairman, hoping to spend even more of his time mentoring employees, on nonprofit roles, and continuing to oversee his other businesses.
He’s far from done, but he feels like many of his biggest plans have been rewarded.
“I’ve been able to put a goal out there,” he said. “And then, with the help of others, put together a plan, so that actually, a lot of those dreams became reality.” CBJ
[See the full 2019 Most Influential list in the CBJ’s Dec. 23 digital edition. >>>]
