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M. Ryan Gorman’s time at Coldwell Banker could serve as the blueprint for any aspiring leader.
During his three-year tenure, Gorman helped usher the 116-year-old legacy brand into a new age with fresh branding, several restructuring efforts that boosted the profile of Coldwell Banker Commercial and Coldwell Banker Global Luxury, and the acquisition of New York City real estate staple Warburg Realty. The CEO also became a champion of diversity, equity and inclusion (DEI) — solely answering for the industry’s misgivings at a post-Newsday lashing from the New York State Senate in early 2020 and launching one of the industry’s most successful DEI initiatives of the past two years.
So it was a shock on Tuesday when Coldwell Banker parent company, Anywhere Real Estate, announced a major restructuring effort that left Gorman on the outs as Anywhere folded Coldwell Banker into its owned and franchise brand portfolio, Anywhere Brands. Although Gorman will be with the company for another three to four months as a strategic advisor to Anywhere Brands CEO Sue Yannaccone, the resounding question is: What went wrong?
Several industry experts told Inman that Gorman’s departure doesn’t seem to be a result of bad leadership. Instead, they said it’s about a company solidifying its footing in the midst of crashing stock values, slowing sales and transaction volume and a possible global recession — all pressures that push leaders to make short-term cuts in favor of long-term success.
‘The company is facing certain pressures’
“You see it all over the news and the industry. There is a huge amount of layoffs,” Weiler International founder and leadership expert Marion Weiler told Inman. “Some of the news headlines that we see are leaders that have clearly mismanaged, right? Just look at cryptocurrency right now. On the other hand [when] uncertainty comes in, you have to make make changes especially as a publicly-traded company.”
Weiler said Anywhere has undergone a major transformation in recent years, as CEO Ryan Schneider places his sights on streamlining the homebuying experience and maintaining its title as the industry’s largest and most profitable enterprise. That goal, she said, has obviously pushed Anywhere to also streamline its leadership, which cuts costs and shortens the chain of command.
“[Anywhere Integrated Services President and CEO] Don Casey is taking on the Cartus side,” she noted. “One of the things that consolidating roles does is if there are differences in approach, you now have one person overseeing more. It can make it easier to create alignment with the company strategy.”
“I don’t know Ryan personally, but it seems [Anywhere’s decision] is not so much of a reflection of his leadership as it is the company is facing certain pressures, and perhaps he’s not in alignment with that new strategic direction, or he might not be delivering the kinds of results that various stakeholders want,” she said.
‘Coldwell Banker is not broken’
Anywhere hasn’t provided the exact reason for Gorman’s departure. However, industry members and Coldwell Banker affiliates took to social media and Inman’s comments section on Tuesday and Wednesday to praise the former CEO’s leadership, saying he was “disciplined, intellectual, and approachable,” “understood the importance of a DEI strategy,” and “well thought of” within the brand.
WAV Group founder Victor Lund echoed the sentiment on social media, saying that Gorman was the right leader to guide Coldwell Banker through the early stages of the pandemic and increased competition from other brands, namely Compass and Side. “His restructuring efforts were effective in allowing Coldwell Banker to remain a leading full-service brand and planted the seeds for long-term success,” he said.
Lund, like Weiler, also said Gorman simply may not be the person to lead Coldwell Banker into the future as Anywhere ups the ante on tech and positions itself to go toe-to-toe with Zillow — a plan Schneider revealed during his first Connect Now appearance post-rebrand.
“Coldwell Banker is not broken,” he said. “Their Multi-Office Brokerage group (called the MOB) is among the leading real estate brokerages in America. They are well-positioned to continue their success through [mergers and acquisitions], recruiting and agent retention.”
“If anything, stronger national brand marketing combined with the adoption of their successful agent and team tools makes Coldwell Banker a strong contender in every real estate market,” he added. “Now [the brand] just needs leadership to sustain the positive momentum and drive deeper adoption of the brand’s offerings.”
With that in mind, Lund said it’s not surprising that Anywhere has moved Coldwell Banker under Yannaccone’s jurisdiction — who per the company’s announcement is not replacing Gorman as CEO — as she drives adoption with MoxiWorks, which powers Anywhere’s marketing, recruiting and website creation solutions.
“They switched from their in-house Zap solution to MoxiWorks [and] Sue is driving that transition across all brands,” Lund noted. “Clearly, Sue is a great and capable selection; however, we would expect that her tenure will be short-lived as Anywhere seeks a full-time leader for this awesome opportunity.”
‘This is our granddaddy in the industry’
From a bird’s eye view, T3 Sixty founder Stefan Swanepoel said Gorman’s move “shouldn’t be read negatively” but should be understood as the result of a constantly evolving real estate landscape where large enterprises must regularly reexamine their growth strategies — especially as Wall Street becomes a bigger influence.
As reported by Inman on Tuesday, Anywhere’s share price (NYSE: HOUS) has fallen more than 54 percent over the last year as rising interest rates and other market headwinds pummeled real estate companies’ standings with investors. Shares in Anywhere shares dropped on Tuesday from an opening price of $7.63 per share to a closing price of $7.45 per share.
As of Thursday morning, shares in the New Jersey enterprise started to rebound after two days in the $7.20 range.
“Anywhere, which is the parent company for Coldwell Banker, is clearly the largest [enterprise], according to the annual sales volume and several other metrics,” Swanepoel said. “I mean, this is our granddaddy in the industry, right? This is a big company.”
“And I think a big company needs to at all times revisit its own plans and its own growth stages,” he added. “Clearly, when there are changes in the market such as a downturn, or a potential downturn, or something like we are experiencing at the moment where there is some confusion, it’s often a time which leaders would say great, ‘This is a time for people to retire, this is a great time to consolidate, this is a great time to see if we can change things up a little bit.'”
Like Weiler and Lund, Swanepoel said no one outside of Anywhere knows the full story behind Gorman’s departure; however, it falls in line with the numerous leadership shakeups at Keller Williams, RE/MAX and other behemoths over the past two years.
“I think there will be more changes coming at Anywhere,” he said. “I mean, we’ve seen some companies like Keller Williams that have had some changes recently. We know that some of the other bigger companies, whether it’s Compass or Redfin that have gone through severe penalization on the stock market.”
Swanepoel went on to note that decades ago some companies saw less leadership turnover because those leaders more commonly owned their businesses. But that has changed as companies have become public entities.
“But these big corporations, they have boards of directors and stakeholders influencing business decisions. I think we will see more frequent but regular changes at the big corporations in real estate, and we shouldn’t necessarily read anything negatively into it — it’s part of growth [and] part of change.”
‘To give Wall Street the pound of flesh they wanted’
W+R Studios founder and Lone Wolf Technologies General Manager Greg Robertson said Wall Street’s increasing influence on real estate means plenty of competent leaders will find themselves in Gorman’s position as investors put pressure on companies to churn out increasing profits.
“In the case, I think, of public companies, it’s unfortunately how brutal Wall Street is,” he said. “If your stock is low or fallen, no matter what the case is, they want to see blood, right? They want some sacrificial lamb, so to speak of, so they can show their investors they’re making a move here, they’re doing things.”
Anywhere had a rough third quarter with revenues dropping 17 percent to $1.8 billion. Its profitability took a 51 percent hit as well, with the net income dropping from $114 million in Q3 2021 to $55 million in Q3 2022. The company declined to release a forward-looking statement but said they expected transaction volume to decline 25 percent in Q4.
Coldwell Banker released its Q3 sales volume a week after Anywhere’s earnings, saying the “retention of franchise agreements accounted for more than $6.2 billion in sales volume.”
Roberston said companies make leadership decisions based on a number of factors and “there’s no one answer” as to why Anywhere and Gorman are parting ways. However, he expects the game of musical chairs to continue as the industry braces for whatever 2023 may bring.
“We’re going into a downturn,” he said. “I don’t think a lot of vendors have been through downturn yet, I don’t think a lot of agents or the leadership of these companies sometimes have gone through a downturn,” he said. “Sue Yannaccone has been around a while. She’s a seasoned leader over there.”
“You have all these brands with independent leaders and they’ve always been doing things their own way, but sometimes you gotta leverage synergies,” he added. “So maybe this is part of tightening those reins. I think [Sue] is going to do well. But I don’t know if [Gorman’s exit] was just to bring new people in or to give Wall Street the pound of flesh they wanted.”
All four experts said the current market is unlike anything we’ve experienced, and major brands will continue to make the decisions they believe will put them ahead when the smoke clears. As for Gorman’s individual path, Swanepoel said this isn’t the last the industry will see of the former CEO.
“I think that people of the caliber of Ryan could probably get a number of jobs in the industry,” he said. “We’re not aware of any employment contracts that he has or hasn’t signed, but I would say that he could get a pick of any number of positions in the industry. And I am sure that there are many companies that would hire him.”