I strongly suspect that last week’s news of fifty- nine branch closures within the Countrywide Group will not have come as a shock to many of us who have more than just a passing interest in the fortunes of the UK property market in general, and the estate agency sector in particular.
Quite obviously, it is clearly a personal tragedy for all those individuals whose future employment with Countrywide Group is now cast into doubt, and significantly, it is less than ideal that the hardworking and loyal staff of these offices should discover their fate first hand via an industry website. But however sad for those involved, I believe that this exercise is only a small part of what is to follow, and more importantly, what needs to follow if Countrywide’s profits and share price are to get on the road to recovery.
I realise that the temptation to join the queue of serial industry watchers in condemnation of this country’s largest estate agency group, for all of its obvious short comings is great, but focusing on solely branch closures gives too narrow a picture of what is really going on at Countrywide corporate HQ.
I am quite sure that by now the relatively newly appointed CEO, Alison Platt, fully realises the true extent of the internal corporate re-shaping that is required at Countrywide, and unfortunately for her and her team, the sheer scale of the organisation carries the burden of great public interest and scrutiny, with nowhere to hide as and when things occasionally go wrong. Also from a personal standpoint, I don’t think that it would be an exaggeration to say that the UK estate agency fraternity metaphorically swims in what is indeed a surprisingly small goldfish bowl – with the smaller fish acting as either armchair critics or self- professed experts who would, naturally of course, have handled things very differently.
Anyway I digress. As I have stated in a previous article of mine, the main challenge for the management of Countrywide is to A) understand the quality of the brands and assets that they have acquired, and B) deploy them geographically in such a way that allows the group to maximise their performance. Clearly Alison Platt has some understanding of this, as she is on record as describing her organisation as a “house of brands”, and declared that she intended to move to “fewer, stronger brands” in the future. Well logically, this strategy makes absolute sense as long as you are able to differentiate brands that have no future from those that have latent potential or have been historically under- performing due poor management or market positioning.
To this end, I was delighted to see from Countrywide’s latest press release, that at long last, London centric brand, John D Wood is being expanded, and now rightly should have the opportunity to take its place and compete “toe to toe” with the likes of upper market agents Savills, Strutt & Parker etc. But clearly, in a group of well over a thousand offices with scores of different brands, this is just one small example of where change has been much needed, and it will be interesting to see whether further changes of a significant nature are made in the months to come.
Of course, getting the right fit between your brand and the town or city in which it operates in is not a problem that is exclusive to Countrywide, but when a business has been constructed in a manner where its core success depends on the sum contributions of its parts , your results are by definition as strong as the performance of your weakest brand.
Finally, I am quite sure that in the months to come there will be further statements from Alison Platt as to the further changes that she intends to make, but she has at least passed the first elementary test of any incoming CEO – which is understanding (as quickly as you are able or allowed to) the deficiencies of the organisation at which you are at the helm. However, it is of course entirely another matter to summon up the courage of your convictions and have the wherewithal to do something about it.
The Author of this article is Peter Nicholls, CEO of Ideology Consulting. For more information, please go to www.ideologyconsulting.co.uk.