In 1980, Edward J. Davidson was charged with the task of relocating 1,200 employees and their families from Cleveland to Dallas. It was an experience that revealed vast inefficiencies in the relocation industry and enormous potential in improving the process.
Davidson noticed that there was tremendous disappointment on both the part of the employees and employer, and decided to take steps to challenge the well-ingrained institutions that dominated the relocation industry.
A year later, Davidson started Homepool L.D., and created a new service to help corporations and their transferred employees sell homes quickly. In addition to the industry powerhouses, Davidson faced a depressed residential real estate market during the company’s early years.
Davidson worked a full three years getting the company on its legs before taking a regular salary, but the efforts paid off with steady growth and a national reputation for the company’s new aggressive home marketing concepts.
“If there’s one thing in particular, it’s the power of our products and services that go way outside the box,” Davidson says of his Mayfield Heights company’s success. “The growth of the company has been by providing services in the relocation industry that no one else has ever thought to do. We give our clients benefits that nobody else gives them.”
Homepool eventually diversified, taking the name Cooperative Resource Services, and offering more products to help the company gain a larger share of the market and compete with the industry’s dominant full-service firms.
During the last four years, revenues and earnings have both more than doubled each year, putting the company in a rare situation where profits are growing as steadily as sales. The number of employees has increased about 100 percent in each of those years, with the company now employing more than 450 people nationwide.
While a majority of the industry sells virtually the same traditional products and services, Davidson focuses on innovative concepts. It started with the company’s creation of the first relocation mortgage home loan program, then the first buyer advocacy program to aid transferred employees in purchasing homes.
One of the products created by Cooperative Resource Services that Davidson is most pleased with is a “riskless relocation” plan that takes the burden of moving employees off of a company’s shoulders. The question of whether a home will sell and quirky tax laws that apply to relocation are often major concerns of corporations that move employees. It is the only home-purchase program on the market to offer full tax and risk protection to the company’s clients.
“When corporations move their people, there are lots of risks, many of them financial,” Davidson explains. “There are risks of extremely expensive moves if employee homes don’t sell. We bear the risk. We’ve also taken away the tax risk.”
The unique approach to relocating employees for businesses combined with the “think tank” environment of the company are keys to Cooperative Research Services rapid growth. The company’s environment is driven by Davidson’s “Natural Law” management style that empowers employees, pays them for their performance and allows them to be continually involved in improving the company.
An innovative “lab” interview hiring process helps the company determine which candidates will ultimately succeed. New hires are trained through a process in which they receive constant feedback on performance, while managers include employees in the creation of operational procedures, then constantly monitor the execution of the new processes.
The company’s compensation structure is set so 30 percent of compensation is based on performance, with an employee attrition rate of just 4 percent.
In recent years, the company has taken steps to snare a larger share of the relocation market by expanding its operations. In 1997, it opened CRS Canada to begin marketing cross-border relocation services. In 1998, the company acquired two industry competitors — US Relocation Services Inc. of Denver and Corporate Transfer Service of Minneapolis.
The company currently has four new products in development and hopes to grow by generating more profit from each sale, forging alliances with other companies and reaching the estimated 500,000 employees who are moved each year with limited relocation.
Judge’s comments: “(The winners exhibit) a combination of a visionary function and a clock building function. Ed Davidson is a perfect example of having both pieces. He took a business that he started thinking was one kind of business and then changed it twice on a visionary basis and build the system so that he gets the results that the corporation and the individuals want.” Gerald W. Cowden