Very Vacant – the vacuum at the top of the industry’s significant companies – Part 2

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.

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23 Comments

  1. Hillofwad71

    The sheer neck of Headphones critcising others

    “A shot goose gabbles the most ”

    Scroll back to  2015
    Can he see Countrywide acquiring eMoov?
    “If they can afford me,” he says. “And there’s some truth in that. As online becomes more and more mainstream, purchases will become more expensive, so they had better get in quickly.
    “I can quite see that eMoov will have a valuation soon of £100m and if that sounds cocky, I apologise.”
     

     

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    1. AgencyInsider

      I am no fan of Quirk but you seem to suggest that because he has been a loudmouth and spouter of nonsense in years gone by his views today are somehow invalid or should not be heard. Isn’t someone allowed to mature and learn from experience?

      As it is, this article is right on the mark. I am still no fan of Quirk but in this instance I think he’s talking good sense.

       

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      1. Hillofwad71

        “I think he’s talking good sense.”
        I think Robert May might disagree with that 
         
          The point is that he is  a self -appointed spokesman for the industry ,an ambassador we can do without 
        Sure he makes some valid points.
        The problem is cherry picking the pearls amongst swine
             ” Isn’t someone allowed to mature and learn from experience?”
         
        “Mature” He is a seasoned veteran 
         
         Unfortunately those investors suckered in just to keep the lights on for a few months  have learned only too well and unable to move on .
         
        “Experience is a hard school but fools will learn no other”
         
            They are allowed to learn but has he ?
         
        He he has not paused to reflect ,.kept his head below the parapet Already set up new companies before  the demise of Emoov  and already  waxing lyrical about Keller Williams  as the next  best thing
          He should have been  banned from being a company  director  for at least 2 years          

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        1. SLF

          Robert May would no doubt disagree but then he has been waffling on about rummage for what seems like decades and it’s still not working and still nobody knows what it’s all about. Personally I’d like to never hear of it again which is highly likely to start happening soon.

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  2. Property Pundit

    The race to oblivion for this once (fairly) mighty and respectful site gathers pace by publishing third party tripe like this. Just employ a proper, qualified journalist that can be named.

    The poster has no position (or real qualifications) to be commenting on, or indeed criticising, ANY other company given his recent track record. Talk about brass neck and, as for his prediction that house prices will not fall/crash imminently, when the inevitable happens (as it will), I hope he does a ‘Prince Andrew’ and disappear from public life, never to be heard from again. Now that really  will be worth reporting on.

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  3. OnlineEA

    First time ever I have totally agreed with Mr Quirk.
    Very valid points and could not agree more with the sentiment on hiring successful EA heads vs MBAer’s who have zero experience but can trawl out the usual “strategy” nonsense.
    Connells results in PIE today show this very point nicely…

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  4. AlwaysAnAgent

    Many of the aspiring leaders who claim to be innovative and inspirational have no idea how to make money. A business exists for this reason unless it’s a charity or not for profit. It isn’t difficult to run a business and lose millions, and yet only a tiny number of true leaders have the ability to churn out constant profits year after year.

    The part missing is the analysis of top level execs who run firms that are performing well. This would make an interesting and positive piece.

     

    If this had been included it would show that leaders of the best businesses in our sector were born and bred in the sector. It may also show that these same leaders are in the autumn or winter of their years.

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  5. Taliesin84

    Upside – Most would agree with the content of this 2 part series as it’s states the blindingly obvious.

    Downside – For PIE to give oxygen to this ego, with his track record of failure, to comment on others in difficulty is beyond parody. PIE seriously needs to up its game. One can only imagine Roz’s reaction to this!

    Score 2/10

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    1. Mrlondon52

      Agreed.

      A more interesting yet difficult to research article would be detailing some runners and riders for these roles. We all understand the macro situations of these companies but we don’t know the inside figures and manouverings. Nor does Mr Quirk.

      He does raise one good point which is to flag up all the vacancies.

      The wider point is about whether you need industry experience to succeed. I would sure as hell try to find someone from the industry as it de-risks things, particularly as many boards are full of non-industry people.

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  6. AndSotheStoryBegan

    Stick to knocking on doors and interrupting the lives of total strangers for KW. There’s no visionary in the UK Estate Agency sector. That’s why it’s in such decline.

    The blind leading the blind.

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  7. Joshua Rayner

    There’s certainly a gaping great hole where a number of CEOs used to be and I suppose the problem for companies is finding the right fit, not just considering a post-Covid environment but, where estate agency is concerned, the fact that the industry is at an inflection point. The industry needs leaders, not just managers in my opinion. Strong, grounded ‘generals’ that can innovate, take risks but know the boundaries. For instance, technology is a minefield. How far to go, what to automate. What not to. PropTech can be ultra-complex and so how as a leader in a traditional property business do you know where the line is? To adopt? Or not to adopt? Also, the traditional model of agency has been pushed around by onliners and now ‘hybrids’ rather a lot in the last decade and the question for the modern CEO now has to be ‘Which model or models work best? And, another quandary…. if you’re the board of a big PLC that’s under some pressure do you hire from inside or outside of the sector? Obviously, we have the answers to these pressing issues at Rayner (lol) but to be frank, it is a difficult time for management direction right now and also a huge opportunity all at the same time.

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    1. AlwaysAnAgent

      You’re wrong Josh. An MD or CEO needs to be a combination of manager and leader or they will fail. I imagine you don’t have many people working for you, or you would understand this.

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  8. Gloucester_Agent

    This has been a poor article, but controversy beats wholesome content now as clicks are what count.

    Nothing wrong with having an opinion – even failed businessmen are allowed one despite what some others may say – but the lack of humility or class in this article is striking.

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  9. ARC

    PIE jumping on the ‘shock and awe’ strategy of modern media. Apparently the masses don’t want well written, informative content. They want to be outraged and angered.
     
    Or is that we do want the former but the the later gets more comments and clicks which helps to better justify advertising costs?!?!?

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  10. Hillofwad71

    Staying on the subject

     

    COUNTRYWIDE

    What is difficult  to understand is having borrowed and spent hundreds of millions buying highly profitable and  well run businesses surely there must be individuals there who have arrived capable of stepping up to the plate?

     

    As is the way of all flesh that of course will include retiring  senior partners clutching their golden goodbye cheques for deals long since gone never to be repeated

     

    However certainly a layer of  talented .ambitious fee drivers who were heading rapidly for the  top too What has happened to them

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    1. ARC

      I suspect that with Messers Long and Creffield leading them they felt like soldiers on the Somme, “lions led by donkeys”, and have long since departed, rolling their eyes and shaking their heads.

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    2. Mrlondon52

      Whatever you say about Countrywide it will be difficult to right the ship. Too many branches making no money.

      One of Amazon’s stars went to run Debenhams and look what happened – there is only so much talent can do if the trends are against you and there has been 10+  yrs of under-investment in the business.

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  11. Robert_May

    If the industry was a classroom it would be down to me to educate the slow learners, even the ‘please miss, please miss, me miss! remedial at the back who cannot quite keep up with the rest of the class, its not that so I don’t have to.

    Genuinely qualified and experienced digital people keep up with the conversation and lead with probing questions.  It’s a testament to what I’ve built that not a single criticism has been made of the innovation, practices and techniques I am introducing to the industry from anyone who has a subject qualification or understanding.

    The change management cycle is well documented and understood  so it isn’t surprising that some people are denying that change they don’t yet understand  is happening while others are ahead of the curve and applying  innovation that IS changing the industry and IS being copied by firms who haven’t innovated at all in 10 years.

    I’m not sure how randomly, out of context, including rummage4 was supposed to enhance this article  but I am surprised PIE has sanctioned another attempt to disparage a project that has worked hard to promote and protect professional  estate agency.

     

     

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  12. smile please

    Seems like Quirk and Paul Smith use this publication to satisfy their own grudges and agendas.

     

    Maybe PIE would like to offer me a column where i can say how i feel about some of the offerings and individuals within the industry?

     

     

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  13. Dick Value

    Can someone let Andrew Stanton know there is a Part 2 to the post that he was late to the game commenting on?

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  14. GeorgeOrwell

    Next – Russell Quirk on Russell Quirk

     

    Exclusive – “The Complete Story”

     

    A short read!

     

    Just the 1 word

     

    T W * T

     

     

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  15. Thomas Flowers

    Whether I agree or disagree with Mr Quirk is inconsequential.

    The point being, is that towards the end of emoov, did he knowingly mislead his new backers? Many of whom lost huge amounts of money backing a failing business model whilst also destroying many success only agents who did not have the financial support to prop up their businesses against a multinational loss leader?

    You simply cannot make a reasonable profit on an average sale for less than 1% commission whatever model you contrive?

    Mr Quirk, It now appears you now accept this as you have reverted, once again, to the full service success only fee model ?

     

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  16. majortom1

    One point I do agree with here is the fact that experience is crucial.

    Take Connells-love them or loathe them-with just one exception (ahem) all yes ALL  of the residential board started off as sales negotiators.

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