SAN FRANCISCO – Driving change at an established company takes a commitment to the vision and a willingness to cut loose those who are resistant. These were some words of advice given by a panel of real estate leaders here Thursday.
“The toughest thing about change in an established older company is that the people who don’t change have to go,” said Parker Kennedy, chairman of the First American Corp. “You have to go through a gut-wrenching process in doing this.”
As the head of a 116-year-old family business, Kennedy knows first-hand what it’s like to present new ideas to a group of employees who aren’t always willing to share the enthusiasm or vision. First American recently underwent a major technology change, Kennedy said, and along the way the company ended up losing a bunch of good employees.
Kennedy’s comments came during a panel discussion Thursday morning at Real Estate Connect 2005, a real estate technology conference. He and five other industry leaders from well-established companies discussed what’s ahead for the real estate industry, and what it’s like to present new ideas to an old corporation.
First American over the years has built an impressive empire of real estate technology and data service offerings by buying up a lot of smaller, innovative companies. But it’s not just the new technology or staff that integrates with the corporation and makes it bigger. Kennedy said that most of First American’s great leaders and fresh ideas come from its acquisitions.
“The best acquisition we ever made was one of the worst companies we ever bought,” Kennedy said with a chuckle. That was because the man who owned the company had the idea that First American should take the title insurance business and combine it with every other type of business needed to close a real estate deal, he explained.
“He said if you buy my company I will lead that change,” Kennedy said.
A leading force of change at one of the largest and most established brokerage companies alive today is Earl Lee, president of Prudential Real Estate Affiliates. Lee, who this year was awarded the special Inman Individual Innovator Award, pointed to three strategies he used in propelling his company into an aggressive Internet presence.
“First, you have to have a very consistent vision of where you want to go,” he said. Then, as a leader, you need also to focus the organization on where they need to go, he added.
Lee also pointed to strong communication, saying it’s imperative that a person driving change communicates the vision in a manner that is relevant to the person they’re speaking to. “If you say, ‘this is what it means to you,'” he said, it’s more effective than generalizing the big picture.
Joel Singer, executive vice president of the California Association of Realtors, has been a driving force behind the association’s new transaction management technology. He commented that he believes the industry over the last 10 years has become much more technologically proficient.
“The level of innovation has never been higher,” Singer said of today’s real estate climate. “The level of new participants has never been higher.”
Many larger established brokerage companies have been forcing technology change within their organizations and pushing business into the next level of innovation. Cendant and its real estate franchise brands are no exception.
Thomas Kunz, president and CEO of Century 21 Real Estate LLC, a franchise brand of Cendant, joined the panel discussion and talked about what it was like introducing the company’s Lead Router online consumer lead management technology to brokers.
“I believe this process – next to our logo – in the end will end up being the most impacting thing we’ve ever done,” Kunz said.
Also sitting on the panel was Stu Siegel, CEO of eNeighborhoods, a nine-year-old company that helps real estate companies and agents build a Web presence and other marketing campaigns. Nine years may seem like peanuts when compared with the 100-plus years behind some of the other speakers’ companies, but in the Internet age, it’s an accomplishment.
“We’re hoping to take some of the established companies into the technology side,” Siegel said, explaining some of the products and services his company offers.
Steve Ozonian, national homeownership executive for Bank of America, stressed that whatever the change may be that a company is embarking on, it’s still more about the people involved.
“When you’re evaluating partners, the first thing you consider is that it’s always about people,” he said. “It doesn’t matter how big the technology is or the company is – at the end of the day, it’s all about the people you work with.”
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