Stanford case study: how Keller Williams grew through the crisis

October 2007. The United States went through its first nationwide housing downturn since the Great Depression, and the monthly results of Keller Williams Market Centers fell from $5–7 million to around $330,000.

In a crisis, most companies cut spending on people and training. Keller Williams took the opposite path. The company's top leaders put $1.25 million of their own capital into a fund to support the network, offered free training to every agent and committed to laying off no one at headquarters.

Between 2008 and 2009, Keller Williams increased transactions from 340,800 to 385,000 and agents from 74,200 to 76,700. Over the course of the crisis, its three largest competitors closed 160 offices between them.

In 2011, Stanford Graduate School of Business returned to Keller Williams to study this response.

The question it put to students is the same one facing anyone considering opening a Market Center today: how does this model hold up when the market contracts?

What the case examines

• Operation Heart to Heart 2: a $1.25 million fund, paid for by the company's leaders and not through profit sharing, for training and for cost-cutting and revenue-raising initiatives.
• Between 2007 and 2009, three training tours with more than 100 stops and around 40,800 attendees, free for agents.
• Profit Camp and BOLD: programs for Market Center leaders to control costs and for agents to raise productivity; 11,000 agents took BOLD.
• No layoffs at headquarters: costs were cut through a hiring freeze, renegotiated leases and Market Center mergers.
• Keller Williams went from 660 offices in 2007 to 680 in 2010, while the three largest competitors closed 160 offices and lost 38,000 agents.
• RED Day: on the first one, on May 12, 2009 in the United States, around 25,000 associates gave 125,000 hours of volunteer work in their communities.

Frequently asked questions