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Turner’s prize

by Clare Bettelley

Grenville Turner runs the UK’s largest estate agency business but he remains relatively unknown. In his first in-depth interview since his appointment in 2006, he tells Clare Bettelley about his journey to becoming a chief executive and what has been keeping him busy behind the scenes.

Think Countrywide and you immediately think of Harry Hill, its non-executive chairman, who joined the agency in 1986. But it is in fact
Grenville Turner who runs the 1,000-plus-strong agency branch business and who has been responsible for streamlining much of the business, which is not bad going given that he only became chief executive last January, having joined the business in 2006.

Turner has overseen Countrywide’s acquisition of new homes specialist
mortgage broker Hurst, as The Negotiator reported on September 3, and of Merseyside-based Specialist Lettings & Management, as reported on August 29. The Specialist deal bolsters Countrywide Residential Lettings’ offices to 204 and takes Turner a step further along his plan to triple Countrywide Residential Lettings’ business in the next few years.

Turner joined Countrywide on the brink of one of the most exciting bidding wars in agency in years. The group revealed that it was locked in negotiations with venture capital firm 3i about a possible takeover
of the agency group in September 2006, a month after Turner joined. This is despite issuing a trading statement in July claiming that it expected to report pre-tax profit of £88m for the 12 months to December 31 2006.

In December, 3i bid £940m for the company, a deal under which Hill and Turner would become management of Charlie Holdco 4, the company set up by 3i to run Countrywide.

But the deal fell through and, in February 2007, US buyout firm Apollo outbid 3i with a bid for around £1.05bn. Like a game of table tennis, 3i made a counter bid but finally, in April 2007, shareholders approved the Apollo deal and Castle BidCo, Apollo’s incorporated company, acquired Countrywide for £1.05bn.

Business acumen

Turner was perfectly placed to help with the corporate restructure, having researched the process as part of his Cranfield School of Management MBA, which he completed in 1992. He wrote his dissertation on the extent to which the rationale for acquisitions
is realised following a deal, focusing on the retail financial services sector. Case studies included Prudential and its acquisition of estate agencies.

“I found that virtually none of the strategic aims were realised. Most mergers and acquisitions were agreed between chairmen and chief executives and were more to do with personal ambition than they were to do with strategic rationale. Where that was the case, it was almost certainly a recipe for failure.”

It was a realisation that he had missed out on a business education – despite having undertaken his banking exams – that prompted Turner to undertake the MBA.

“I remember reading a series of articles that said that chief executives never come from marketing, HR or sales.

“I never really thought I want to be a chief executive, but because I’d made progress in my career reasonably early, I was looking ahead and thinking that I had a long time to work and I didn’t want to be doing this for the rest of my life.”

Turner had started his career with Halifax, starting out as a clerk cashier in its Chesterfield office in 1975. The monotony of the job soon sparked an ambition in Turner to move through the ranks within the business.

“I became a thorn in their side, insisting that I could do other, more senior roles, and very quickly moved through the ranks, which sounds dynamic but it wasn’t; you didn’t have a lot to beat back then,” he quips.

Consequently, after three years he was promoted to run the then building society’s mortgage division, managing 15 staff in its 60-strong Chesterfield office in Derbyshire.

He was then approached to turn its Cambridge office into a profit-making business within 18 months. It was at this time that Turner had bought his first property, for around £18,500, which was around five times his salary. With little more than £50 to his name, Turner says he was reluctant to relocate.

“But they told me that they really wanted me and that they would put me up in a hotel for 12 months.

“They also said that if I turned the branch round I could then choose any job I wanted [within the business].”

Turner opted to join the society’s training department on the successful completion of his challenge, for the variety as well as the opportunity to travel. “For some people, working in a branch is exactly what appeals to them, but I’ve always had a yearning for job variety.”

It wasn’t long before Turner became regional training manager and then group training manager, with prime responsibility for the company’s management training programme.

Education

Training was the closest Turner came to his childhood ambition to become a sports teacher. Turner had had a place at Loughborough University and had been busy pursuing his love of athletics, which led to him competing in the 110-metre hurdles at the All England Championships while at school. But the need to start contributing
to his family’s income led to him having to abandon his dream and join Halifax, much to his own surprise.

“I was 17 with borderline qualifications and being interviewed by the branch manger, who was then considered as one of the pillars of the
community.

“But then he started talking to me about my interests, found out I was interested in gardening and that was it; we hit it off.”

Turner had taken up gardening, along with cleaning out chicken sheds and delivering fruit and vegetables and newspapers, to earn an income while a student.

This was at a time that, by his own admission, Turner had no idea what a building society was.

Estate agency

Turner’s first real step towards the estate agency market followed his MBA. On its completion he was asked to run Halifax’s 1,500-strong surveying business. “They had decided to sell it and because I’d been trained in acquisitions and disposals, they asked me to go in and run the business and get it ready for sale because it was underperforming.”

The division comprised the surveying business of the estate agencies Halifax had acquired, plus its in-house team and those of its other businesses, Leeds Permanent and Birmingham Midshires, which he was tasked with integrating in preparation for the sale.

Three months later, the business was on the verge of being snapped up by investment bank BZW, but the deal collapsed in its final
stages. According to Turner, this was due to BZW having appointed Boston Consulting Group to undertake some market research on the potential success of a standalone surveying business, with the conclusion being that a surveying business had to be part of an
estate agency to survive.

Turner was subsequently asked to explain to Halifax’s directors what he planned to do with the surveying business, which Turner had become convinced he could turnaround. But with 1,500 jobs having already been removed from Halifax’s cost base, Turner knew it was a difficult proposition to stack up.

“I went to the board and told them that while we were previously going to get £30m-odd for the business, the best we were probably going to get now was £5m.

“I thought it was a business that was quite capable of making £10m a year. It had simply been badly run.”

Unsure whether the outcome of the meeting would lead to the end of his Halifax career, Turner devised a back-up plan, which was to buy the business himself.

“I got a call about two hours later, asking if I could go and see Mike Blackburn, Halifax’s then chief executive, and I thought that was it.

“But he said that the board had thought the presentation was fantastic and that they wanted me to implement my plan.

“That for me was a major turning point; it instilled in me that you should always say what you believe, rather than what you’re told
to say.”

Turner claims that he turned the business from one losing some £20m to one that generated around £20m worth of profit by the time he appointed a managing director to run it four years later.

Troubleshooter

Thereafter Turner became a troubleshooter, moving roles every 12 to 24 months once he had turned around a business, from the intermediary businesses of HBOS – the company created from the merger of Halifax and Bank of Scotland in 2001 – to Intelligence Finance, HBOS’ online mortgage brand, to which he was drafted in as chief executive. “I just love that type of challenge where, whether it’s a good business that’s just underperforming or whether it’s a bad
business, you go in and people expect you to make change.

“Going round the business and discovering the best people in it, really sitting down and working out a vision that is achievable and then setting about just slavishly delivering it, is something you get in the routine of. ”

And so to Countrywide, which has been subjected to this routine since Turner’s arrival.

“When I was fortunate enough to arrive here, I looked around the business and saw that the vast majority of the business I was absolutely delighted with; they were the right businesses with the right scale.

“But there were certain things we were doing, which just didn’t appear to be strategic or operationally effective and which did not appear to be markets that were likely to become interesting.”

H2O Homes Overseas, the Spanish business Countrywide sold last year, is a case in point.

“It had lost money every year, so we sat round the board table and asked whether it was strategic for us. It wasn’t – the UK is our
heart. I then asked whether we were any good at running it or likely to get a lot better at being so in the near future. Again, the answer
was negative. We were up against major Spanish operators and we were operating in an environment that was alien to us, plus the Spanish market was highly unlikely to get better than it had been in the last five years. So we sold it within a matter of weeks.”

Turner sold the business for €1.4m (£1.1m), which he said was a far more cost effective outcome than if he had closed the business
down, because of the potential redundancy costs.

Countrywide’s remortgage conveyancing business was next to get the Turner treatment. “On the other hand, you look at our lettings business, it is a fantastic business that we just haven’t put enough time and effort into,” Turner is quick to point out. Hence the Specialist acquisition last month. “Within six weeks of being here, I remember saying we’re going to triple this in the next few years, so that’s what we’re getting on with doing.”

Changing faces

Turner says the seniority of staff and the fact that many had been with Countrywide for some time convinced him of the potential
value within the business. “We are the biggest and most successful of our kind in the sector but we still had some huge steps
forward to make.

“Looking at the divisions when I arrived, I fundamentally believed that most of them could be 50% better, partly because the vast majority of the management had grown up with the business and adopted the approach of bolting more and more onto the core business. When you do that, you need to take a step back and refigure the business, which is very difficult for people who have been with the business for a long time.”

Turner has reduced headcount by 2,000 people in the last 12 months, which he says is as much due to the group not hiring as it is to
redundancies. Turner refused to be drawn on whether further redundancies are on the cards.

Management style

Turner dismisses his industry reputation for being a disciplinarian who has ruffled a few colleagues’ feathers along his career path, insisting that it is more a case of him being principles-led.

On the suggestion that he has yet to make his mark on Countrywide, at least publicly, he says: “Since joining, the main issue for me has much more about getting the business in shape, creating the vision for the company and its constituent parts and agreeing them with the business, then getting them to achieve it. I think we’ve made huge steps forward in that.

“There’s nothing worse than a company setting standards it fails to achieve.”

He adds: “Our business is about value for money, quality, about doing what we say we will, and about respect for staff as well as customers; in some ways those things were there, in others we had quite a lot of ground to make up.”

Turner’s challenge is now to continue managing the growth of the business while managing US investors’ scrutiny about its long-term performance, which he is clearly determined to maximise while at its helm.

“Nothing would be better for me than we make money and they make money. I can assure you that Apollo holds me accountable for delivering the strategy and that’s about value creation and this business being better in two years’ time than it was two years ago."

But he acknowledges that “Harry’s [Hill] a hard act to follow.”

Turner’s success will of course be partially reliant on his ability to integrate the group’s recent acquisitions and carefully select any future targets, which means that his work is half done. With his MBA knowledge about pride, or indeed ego, being before the fall of many chief executives’ mergers and acquisitions deals, he’s unlikely to make the same mistake himself.

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