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Monday, May 14, 2012

Culture does matter

by Mark Rose (Toronto)

The temptation to write this blog has been front of mind for some time. It is clear that our industry is in a period of consolidation, with companies announcing new acquisitions on a regular basis. Although the competition may take issue with this, recruiting, mergers and acquisitions are not just about revenue. Any student of business knows that growth – whether organic or as a result of M&A activities – can be powerful, especially if revenue growth levers a fixed overhead structure into expansion of profit margins. Simply growing for growth’s sake is a flawed strategy. Growth according to a clear strategy, best practices in governance and operations, and growth aligned with clients’ needs is what promotes and ensures longevity. When growth like this occurs within a cohesive culture based on strong aspirations, great things can happen.

Just assembling great clients and great people together does not make for a great company. Revenue and profits are critical to success, but a great corporate culture is the key to long-term value creation for all stakeholders.

Our clients want their service providers to be aligned with the client’s objectives, have a deep understanding of their business – and also possess a strategic vision and a solid balance sheet. These critical industry differentiators ensure that real estate services will be executed by an operational partner who is culturally and financially solid and capable of delivering long-term solutions. Clients are frustrated by the instability of debt-laden providers who are focused inward and who miss the opportunity to fully understand the client’s needs and execute the proper solutions. We value our debt-averse culture because it is one less distraction, and we thrive on our non-siloed structure that puts the holistic analysis and solutions ahead of business-unit profitability. By eliminating these unnatural tensions, we as the service-provider can more effectively focus on the long-term success of our clients and our business. Strategies and long-term solutions need to win out over short-term earnings or debt repayments.

At Avison Young, we believe that industry-leading top talent, working as a team, in a non-siloed partnership structure, has and will outperform all existing models to meet the needs of clients and create opportunity for long-term success. Knowing that our clients are looking for best-in-class practices delivered by a team that is governed by best practices, results in the need for alignment and a structure that supports that alignment. This alignment comes from our understanding of clients’ objectives and challenges, and is solved by a holistic approach that leads to strategic advice and execution.

Every service provider claims these attributes, but many fall short because the organization and culture do not support the objective. Today, almost every global competitor is owned and (most importantly) governed by public shareholders or a single shareholder. This means that ownership is detached from the day-to-day business of providing real estate solutions. In fact, the relationship is entirely financial. To be more concise, clients are being serviced by extraordinary women and men who deliver results everyday, but unfortunately have little or no say in the direction of the company that employs them. More importantly, they do not share in the accountability or the benefits of ownership. Clients, employees and owners all must have a deep understanding of what defines success and a real-time connection to long-term thinking in order to execute the absolute best solutions for the clients.

More than 30 years ago, Graeme Young & Associates became the foundation of Avison Young and joined with Avison & Associates to create a leading Canadian-based real estate service firm. The company was formed, in most part, by leaders who hailed from the highly-regarded Knowlton Realty in Canada, and has consistently delivered for clients over the years as a Principal-owned and led, team-oriented, solutions provider. In 2008, the merger of these entities formed the foundation of a company that recognizes and appreciates the individual – and more importantly, understands the power of the integrated team when these top performers come together and put their knowledge and experience to work for the client’s benefit.

Our Principals own the company and have, at the core of our belief system, the proper alignment of financial, operational and reputational risk on one hand and (potential) benefits of ownership on the other. This means those who manage accounts and clients are accountable to, and benefit from, client satisfaction. That is the perfect alignment created more than 30 years ago and preserved at Avison Young to this day.

Since the beginning, we have turned away from revenue producers who do not add positively to our culture and our clients’ strategic tool kits. Our mission is clear – to provide our 2 x 5 x 4 strategy (client types multiplied by service needs for each client multiplied again by strategic core asset types) in all major markets of the world. We know our culture and have hand-picked the top talent who believe in alignment, team work, and a culture of honesty and integrity. Approximately 700 individuals have joined us in the last few years and, while there are too many to mention, they have made us a better and more exciting company. The work of our leaders and managers and the success of our recruiting and acquisitions came full circle with the addition of Arthur J. Mirante in April.

Arthur, who was the former Global CEO of Cushman & Wakefield, came to Avison Young after 41 years with C&W. As we all do, he sees the prospects of a fast-growing Canadian, now North American (and soon to be global), company, whose Principals are fiercely loyal to each other, protective of our vibrant culture, and singularly focused on delivering for our clients. So, after we celebrate recruits, client wins and successes, mergers and acquisitions and all aspects of growth, the one common truth is: culture is what drives us, culture is what holds the strategy together and, therefore… culture does matter.

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