Barbara Corcoran's Golden Apple
When Barbara Corcoran's relationship with her boyfriend and business partner fell to pieces in 1973, she borrowed $1,000 and set up shop on her own. The rest, as they say, is history: $70 million worth of history -- the amount Cendant Corp (CD ) paid in 2001 for her New York real estate brokerage to the stars.
Now, Corcoran has another credential: best-selling author. Her Use What You've Got: And Other Business Lessons I Learned From My Mom (Portfolio, $20) is a hot entry on the business-book lists, chronicling 28 years worth of the sass, savvy, and street smarts that helped turn a very small business into an outfit doing $2.5 billion in annual sales and rental transactions.
The woman who found apartments for Madonna and scores of other Big Apple celebrities sat down recently with BusinessWeek Online's Alison Ogden to share the secrets of her success -- from playing the publicity game to her habit of deliberately rubbing prospective employees the wrong way. Corcoran, who remains chairman of the outfit she founded, even shares her thoughts about the importance of investing in a sharp overcoat. Edited excerpts of their conversation follow:
Q: Barbara, you grew up with ten brothers and sisters. You must have learned some good strategies for getting attention! A:
Q: Barbara, you grew up with ten brothers and sisters. You must have learned some good strategies for getting attention!
A:When we were kids, we all had equal opportunity to speak at the dinner table. What got you the longer spotlight was if you had something more interesting to say, or if you could somehow say it better. So, I learned to speak up and say things in creative ways. Most importantly, I learned to get to the point quickly.
Q: How did that translate later in your career? A:
Q: How did that translate later in your career?
A:The best way I've gotten attention in business is by using the media world to get messages out, like when I first published The Corcoran Report [newsletter]. It was probably the single best thing I ever did.
Q: How did The Corcoran Report help you to get media attention? A:
Q: How did The Corcoran Report help you to get media attention?
A:Every time the media needed statistics, they would go to the report -- it created a system for the attention to keep coming back. In the last 5 years to 10 years, the media has been calling me for everything. Reporters know they can ask me anything -- they know I'll get the answer for them. That type of communication builds friendship.
In order to grow my business, my top responsibility was to take care of the media. One customer recommending you to another always helps, but keeping your company in the limelight -- and appearing to be much more successful then you are -- served as a fast-forward machine. Everybody wants what everybody wants. If the media is giving you attention, the assumption is that you deserve it. In many instances, we didn't deserve to be there because we weren't the market leader. But people thought we were, so we had to run like hell to keep up with ourselves. And eventually we became the leaders.
Q: Is this an example of the reality vs. perceived reality? How important is that to success? A:
Q: Is this an example of the reality vs. perceived reality? How important is that to success?
A:Absolutely! It might sound ridiculous, but my first personal experience with perceived reality was buying a Bergdorf Goodman coat. Any business manual will tell you that blowing your whole paycheck on a coat the first week you're in business isn't prudent, but I thought -- and still think -- that it was the best money I've ever spent. When people are relaxed and look better, that gives them confidence, especially in sales. How you feel about yourself dictates how well you do and how the customer will respond. Confidence is contagious. Thank God, I didn't have the taste level to know the coat was so awful or I wouldn't have been walking around like a proud rooster!
Q: Money spent creating an image is money well spent? A: Q: When you started your own business, your ex said that you could never do it without him. How much of a driving force was that? A:
Q: Money spent creating an image is money well spent?
A:If you're planning to build a business, the best way to do it is to throw out a bigger image -- then your only option is to run after yourself to keep up. You have no choice but to keep up. The public loves nice things. They love the look and feel of success, so if you can garner that feeling right on the front of your business, people will like you.
Q: When you started your own business, your ex said that you could never do it without him. How much of a driving force was that?
A:It was the equivalent of a business insurance policy that guaranteed I wouldn't fail, mainly because my ego was vested in [the challenge]. For a long time, I thought he had been responsible for my success, so I was vulnerable that it might be true. Nothing is more powerful then putting your finger on someone's vulnerability. Because the doubt was there, it really motivated me.
Q: When you were building The Corcoran Group, what hiring strategies did you use to develop a strong sales team? A:
Q: When you were building The Corcoran Group, what hiring strategies did you use to develop a strong sales team?
A:If you put a crowd of people in an office, there's always someone playing the role of helper. Helpers make great managers. I don't try and find someone with a big ego or someone who's bossy. In sales, the companies that do very well are those that understand the managers work for the salespeople. That's how I choose my managers.
Q: How about the salespeople? A:
Q: How about the salespeople?
A:I focus on the only two important things: empathy and ego drive. I use a strategy in interviewing where I half insult the person to see if they really want to reach across the table and ring my neck.
Q: How exactly do you insult them? A:
Q: How exactly do you insult them?
A:I tell them that, though they seem to have the empathy part down right, I'm just not picking up a big enough ego drive. Then, I sit back and watch. People who really feel insulted become great sales people. You can't fake passion, and that's what I want to come across.
Q: In your book, you emphasized hiring women over men, is that a policy you still follow? A:
Q: In your book, you emphasized hiring women over men, is that a policy you still follow?
A:I built my business hiring great women. The reason I hired women was that most had something to prove. They were usually coming back into real estate after not working or they were coming back into the workforce after having left to raise their families many years earlier. They were making up for lost time, so they came in with a lot of passion.
A second reason is that women are not afraid to hold hands. They are great team-builders, mothers, and collaborators. I never had problems with territorial women. If I had to take one person's job and chop it into three new departments because the nature of the business was changing, women wouldn't claw to their old roles. They would see the big picture and welcome the new person taking on their old function. I really found they had great traits that accommodated the growth of my business.
A: What is the turnover like at the Corcoran Group? B:
A: What is the turnover like at the Corcoran Group?
B:Obviously, if people aren't selling, we can't afford to keep them. In a sales organization, you have to sweep the corners, which means getting rid of the bottom 25%. But usually, there is little turnover here. People like their jobs because I create positions around people's gifts. I don't put people as a peg in some hole. You get so much more out of someone who loves their job then someone who doesn't.
Q: Why did you decide to sell your company after so many years of work? A:
Q: Why did you decide to sell your company after so many years of work?
A:I felt guilty when I spent inordinate amounts of time at the office and guilty when I spent time with my son and husband. To do a job well, you have to give it 150%. I didn't feel I was doing enough, either at the office or at home. I just didn't feel like I was doing a great job. Once I realized I had an equity, I realized I had an option. I knew my business was completely self-sufficient, from new technology to state-of-the-art office space.
Q: How do you balance work and home life? A:
Q: How do you balance work and home life?
A:I don't. I accept that I don't have balance in my life. But I do try as hard as possible to be "in the moment." When I'm at work, I don't think of my family, I just focus on what has to get done. When I'm at home, I would never answer my cell phone, and no one would dare call me.