Russell Quirk concludes his look at the vacancies for the top jobs in the industry.
Countrywide – CEO vacancy since January 2018 – The battered and bruised entity that was once King of the Hill but now is effectively in exile, Juan Carlos like, awaiting news of its fate on ‘charges’ of, well, gross incompetence. Its spineless, inactive shareholders have let greatness slip through their fingers – hired an out-of-industry outlier to ‘fix’ things under the eye of a chairman that was juggling more roles than Tom Hanks; fired the fixer; didn’t bother with the further inconvenience of hiring another CEO; went back to basics (shorthand for taking the business backwards even further); in all, ending up with the value of the company plummeting by some 98%. It also fumbled a number of ‘rescue’ deals along the way namely LSL and Lambert Smith – and a new COO that didn’t even show up.
Any fresh CEO here will have to be ruthless, innovative, brave and bold and have the genuine blessing of the board to be such. Things will probably need to get worse before they get better. But this once great institution can, I reckon, be great again but it will not look the same. Nor can it.
Because there is still more upside opportunity than downside, I score it 6/10 but only if Peter Long is, well, long-gone.
On The Market – CEO vacancy since 9th March 2020 – Five months is a long time to be rudderless. Does no-one want this gig?
OTM was full of promise at first yet quickly became such a bitter disappointment to all except Ian Springett who no doubt bounced out of Boundary Row upon his forced departure all the way to the bank to count his money.
The ludicrous ‘only one other portal rule’ was straight out of ‘Business Strategy by Joseph Stalin’ as I mused to the CMA in my original representations when OTM launched. This portal communism has failed to work and has simply resulted in that which it sought to attack, Rightmove, becoming stronger. Doh!
Many agents don’t pay anything at all to be on OTM. Some pay one amount, others another. In fact, the original supporting ‘Gold’ members, the loyalists, seem the most disadvantaged of all. And the company’s limited cash is being ever consumed as losses continue whilst their average revenue per advertiser, the big test of success, sits at a multiple of ten times less than their big rival. No wonder there’s turmoil. No wonder there’s a search for a new CEO.
The question is, how to re-invent OnTheMarket? – and in particular their awful, awful, awful TV ads. Whoever commissioned those needs to get fired too – today.
Upside – Could yet find a proper USP for its agency customers and actually monetise them at last. Or get absorbed by/merge with a new rival. Downside – Agents’ trust. Score 5/10.
YOPA – CEO vacancy since December 2019 – We could have all had babies in the time it’s taken to fill Ben Poynter’s shoes who’d filled Dan Attia’s shoes who, in turn, filled Andrew and Alistair Barclays’ loafers. That’s a lot of bosses for a young company and almost mirrors Housing Ministers in velocity.
YOPA (sung to the tune of YMCA) is not actually a yoghurt but an online estate agent that, like all of the others (trust me, I know) has flatlined on market share and has consumed over £75m to stay put at a paltry 1% of UK sales. Whilst the rest of us were packing away the desks at other online agencies having given up the idea as an ‘interesting experiment’, Savills and the Daily Mail General Trust ploughed yet more cash into the thing. Interestingly, neither the Barclay family nor Simon Embley’s LSL were prepared to do so, the latter writing-down their shareholders’ investment by 65% instead.
I see little hope of any decent exit for the stakeholders here, especially not at the price that some bought in at and so it’s not a surprise that a likely exit-seeking CEO has yet to be hooked.
Upside – A smidgeon of apparent ‘profit’ in July. Downside – Can’t scale and therefore is not sustainable as an exit opportunity nor an entity that will pay decent dividends either. Plus, its actual value is a fraction of the valuation many have previously invested at. Score 3/10
Rummage 4 – CEO vacancy since ‘unknown but quite a while ago’ – Anthony Codling exits almost as quickly as he started and very quietly. Is it because to all extents and purposes Robert May’s project is still that – an academic endeavour that is unable to be utilised commercially? Codling took quite a reputational risk backing what amounts to the equivalent of a school chemistry set in a shed, and seems not to have ventured back to the City accordingly, preferring his own start-up to distract attention for a while.
This business doesn’t need a CEO – it needs a vet to put it out of its misery.
Upside – Hard to think of any. Downside – it’s all downside for a product that the founder seems unable to articulate to the market. Score 0/10
The thing is, most of the decision makers seeking new blood at the top of these organisations will be yearning for a certain type of person. A smart, MBA holding, public school type with senior experience at a financial institution, a PLC or a Big Four accountancy firm or a Bain or McKinsey high-flyer. A clever-clogs. A spreadsheet junkie. A big brain.
ARLA PropertyMark have already declared that they favour someone without the encumbrance of a property background. And it may be that the shareholders and chairmen in all of these corporations believe that there are not big enough brains in the estate agency sector from which to pick and which may well be why these vacancies continue to be so vacant.
But regardless of the insulting misconception that UK estate agency cannot offer up prime examples of leadership, it is regardless a huge mistake to pass responsibility of any of the foregoing entities to a driver with no experience of the track.
I’d say that these companies need a ‘clever novice’ just like the Mercedes F1 team need dump Lewis Hamilton in favour of a PHD physics grad that can explain g-force to the pit-crew. It certainly wouldn’t make them faster or better and they’d mess up all the corners distracted by their Texas Scientific calculator rattling around the cockpit.
No, experience counts. A lot. Especially in this business.
There is a certain nuance to our industry whereby it is necessary to understand its quirks and to feel and anticipate its ebb and flow – especially when things are a bit awry as now. To innovate it, you need to know it. To fix its holes you need to know what are really holes and which are not. What are actual problems and where are opportunities.
Sadly, many non-incumbents seem to grossly underestimate the dynamics of estate agency and related services. It looks easy, but it is not.
I suspect that the Magnificent Seven above (ok, six) will mostly still make the mistake of hiring a candidate from outside of the industry at a time where instead it is crucial that their respective leaders actually have a solid property DNA to support future strategy.
The most beleaguered of big estate agency businesses, Countrywide, Foxtons and PurpleBricks – all have non-estate agency bosses at the helm. In fact in Peter Long and Alison Platt, Countrywide have had two, one after the other – and how exactly has that worked out for them?
Countrywide, On The Market, Reapit and YOPA etc don’t need a big-brained individual wrenched away from a decade at business school.
What they each need is a visionary from within the industry – a leader, not just a manager. Someone with an open mind. A leader that then hires big-brains below them, surrounding themselves with clever people to go off and execute on their big, innovative vision.
No matter how dumbed-down it’s perceived, strategic direction must come from grass-roots property experience.
And not the from the false allure of a shiny certificate on an Oxbridge grad’s wall.