CBJ's Largest Privately Held Companies 2018
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TrueNorth <strong>Companies</strong><br />
2<br />
When TrueNorth <strong>Companies</strong> set about preparing its<br />
2017 annual report, there was only one logical thing<br />
to title it: Evolve.<br />
In what CEO Duane Smith called “a year of transformation<br />
and evolution,” TrueNorth announced a transition<br />
in leadership, 60 new team members, four new<br />
acquisitions and a new talent development program designed to<br />
help employees grow both personally and professionally.<br />
That’s without even mentioning its $813 million in revenue,<br />
a figure that ranks the Cedar Rapids-based insurer and financial<br />
services provider as the<br />
second-largest privately held<br />
company in the Corridor,<br />
and puts it well on its way to<br />
reaching a goal of $1 billion<br />
in sales by 2020 and $2 billion<br />
by 2025.<br />
“We’re right on track to hit<br />
that $2 billion in 2025,” said<br />
Mr. Smith, adding that True-<br />
North’s growth has been split<br />
about 70-30 between organic<br />
growth and acquisitions over<br />
the past two years.<br />
“It’s a good thing,” he<br />
DUANE SMITH<br />
CEO<br />
joked of the rapid change.<br />
“But be careful what you ask<br />
for, you just might get it.”<br />
Since 2015, four new firms<br />
have begun operating under the TrueNorth umbrella, including<br />
Community State Bank Insurance of Ankeny, Edwards-Brandt<br />
and Associates of Mason City, Weinman Insurance of Indianola<br />
and Nimble Insurance of Chicago.<br />
Thanks to consolidation in the industry, competition is<br />
fierce, and Mr. Smith said TrueNorth looks at about 20 acquisition<br />
targets for every deal that gets completed.<br />
“Private equity groups have found that the reoccurring revenue<br />
our industry generates is attractive to them,” he said, adding<br />
that TrueNorth’s unique ownership structure has given it an advantage<br />
others can’t match. Since the company was established<br />
in 2001, it has grown from six owners to 60 – and counting.<br />
“It’s because we give entrepreneurs the ability to have a say in<br />
their own business and their own specialty, subject to our owners<br />
manual, and to own part of their future growth, income and<br />
ability to grow equity in their respective profit center,” Mr. Smith<br />
explained. “They’re making their own decisions about their businesses<br />
everyday versus just being employees of a larger firm and I<br />
think that resonates in the partnerships we build with our clients.”<br />
The company’s organic growth has largely been driven by<br />
its insurance products and industry-specific services for construction,<br />
medical, transportation and other fields. Over the<br />
next 10 years, the company hopes to add another 400-500<br />
employees, ideally half through its acquisition strategy and<br />
half from within.<br />
“We’ve been building out our level of expertise so we can<br />
focus on really specific industries,” Mr. Smith said. “We’re<br />
active within their associations, we really get to understand<br />
what problems they are facing. In a perfect partnership with<br />
our clients, we’re only spending 25-30 percent placing insurance<br />
products and<br />
spending the other 70<br />
percent helping solve<br />
other business issues<br />
… many of our competitors<br />
don’t focus<br />
that deep.”<br />
The company earlier<br />
this year made<br />
good on its long-held<br />
succession plan, with<br />
Mr. Smith’s son, Jason,<br />
set to take over<br />
as CEO in 2020. Jason<br />
Smith, who now serves<br />
as president, has taken<br />
over business development<br />
and growth initiatives,<br />
his father said,<br />
“and has done a great<br />
job of really building<br />
out a structured focus<br />
on organic growth.”<br />
Planning for a new<br />
generation of leadership<br />
is perhaps the<br />
biggest challenge the<br />
company faces going<br />
into the future – and<br />
on a personal level,<br />
Mr. Smith said, the<br />
toughest evolution.<br />
THE TEAM<br />
EXECUTIVE TEAM<br />
Duane Smith, CEO<br />
Jason Smith, President<br />
Bill Teubel, CFO<br />
Dru Bridges, COO<br />
BOARD OF DIRECTORS<br />
Loren Coppock, Chair<br />
Duane Smith<br />
Jason Smith<br />
Bill Teubel<br />
Dru Bridges<br />
Randy Rings<br />
Trent Tillman<br />
Max Smith<br />
Josh Budke<br />
Devin Pipkin<br />
Dave Verhille<br />
Pete Layden<br />
Jim Swift (board observer)<br />
SUPPORT TEAM<br />
Bankers Trust<br />
BankIowa<br />
Bohr, Dahm, Greif & Associates<br />
Cedar Rapids Bank & Trust<br />
Rings Law PLC<br />
“At 62, I now have about two and a half years and counting,”<br />
he said. “What that does is require you to really develop<br />
a plan and what we call an ‘owners manual’ to hand off to the<br />
younger generation. One of the key components of building a<br />
successful company is really the ability to hand it off and have<br />
it prosper beyond the hand-off … building an enterprise that<br />
will stand the test of time.”<br />
-Katharine Carlon<br />
8 CBJ’S LARGEST PRIVATELY HELD COMPANIES <strong>2018</strong>