CBJ's Largest Privately Held Companies 2018

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