‘The phone didn’t ring for two years’ – when Andrew took over from Pam
Andrew Golding is one of the nicest guys in real estate: he’s always polite, respectful and courteous. His mother surely raised him the right way! Which says a lot, by the way. This is because, at the age of 47, Pam Golding’s chance peek over the next-door neighbour’s wall set off her career as an estate agent and patron figure of one of the country’s most recognisable brands in real estate.
“Our neighbour at the time, Mr Eddie Michalofsky, was lying in a hammock in the sun and my mother and he were chatting,” Andrew remembers. “He told my mom that he was an estate agent and that he was trying to figure how to sell a particular house.
“’I know someone who will buy this house’,” she said.
“’If you can find me a buyer for this house I’ll share my commission with you’,” he said. “And that is how she started.”
Pam Golding the real estate agent represented a change in the profession at the time. What today is common cause, was unheard of back in 1976 – a time when men dominated business and the country was on the cusp of significant political events.
“She would regularly pick up a prospective buyer from the airport and drive them around in her car to look at available houses,” says Andrew, noting that she started in the Southern Suburbs of Cape Town. “She demonstrated a sincere interest in the lives of her clients, often showing up to her clients’ children’s sporting events. She never missed a chance to wish a happy birthday, either.”
What Pam Golding knew then, despite not being trained in real estate, was that personal, genuine service went a long way in drumming up new business and – even more importantly – repeat and referral business.
Her son Andrew has been at the helm of the company for around 21 years – one year less than his mother was – despite never actually working the day-to-day life of an estate agent.
When Andrew, who was a young but successful medical doctor, took over the family business in 1996 – as a 32-year-old – he had to learn the ins and outs of the business, and would frequently debate the various issues of the day with his mom, Pam.
“Given our various perspectives – myself a young, male doctor by training and inexperienced in the world of real estate, and my mom the older, experienced and female founder – we have always been, and remain incredibly close, despite the occasional professional disagreements,” he says. “More importantly, we completely agree on the fundamentals of Pam Golding Properties: its values and ethos which I have tried to perpetuate and which are the bedrock of the business today.”
In so doing he gained the respect of seasoned agents many years his senior (in years and in business).
“I leapfrogged over managers and needed to earn their confidence and trust, and they needed to get to know me,” says Andrew, remembering that it took a while for people to believe he could actually run the business which was already turning over R400m per year. “When I took over as CEO, the phones didn’t ring for two years.”
Andrew remembers that period when interest rates were hovering around 25% per annum as a tough one, but one that gave him the chance to get his bearings and get stuck into the business.
The young doctor not only took over the family-named business, but also its eight-year old franchising operations.
“When I took over, and following a growth phase, we had about 50 offices spread across the Western Cape, Gauteng, Eastern Cape and KwaZulu-Natal. Following this, the business was in a period of consolidation from 1996 to 1998 mainly because of interest rates, before we then embarked on a further growth phase,” he says, noting that the decade from 1998 to 2007 was a period of exponential growth in the business and the residential market in general. “The business grew from 50 offices to 300!”
About half of all Pam Golding offices countrywide are owned by the company and bring in 80% of the group’s revenue. According to Andrew, in the mid-1990s the group hit a turnover of R400m in a year. “Today, 20 years later, that number has increased to R20bn,” he says, explaining that the company’s international business is responsible for about 15% of total turnover. “The international business has over the past 20 years waxed and waned; the constant has been the Indian Ocean islands which makes up 10% of turnover.”
As a family-named and run brand, especially one that franchises itself, there are massive risks to brand credibility and business longevity that need to be considered on a day to day basis. The last thing PGP needs is one of its agents, franchisees or even one of its management in the news for all the wrong reasons.
“You can never relax, or rely on the fact that in a company of 3,000 people someone is not going to do something silly,” he says. “We have, however, identified a number of strategies which we have implemented in order to try and mitigate the risk. You have to be sure of those you recruit share similar values to the company’s and that they understand yours.
“They also have to understand that by buying into the business they represent the business and the Golding family. We spend a lot of time training and ensuring everyone understands this.
“What one agent does in one region affects agents in other regions. For example, if a seller is given poor service in Sandton, they might not want to deal with a Pam Golding agent in Plett. Conversely, if that agent provides impeccable service, the other agent benefits.
“While there is no mechanism to avoid a social media storm, if it does happen it needs to be dealt with honestly, and the issue needs to be addressed.”
When a brand is raked over the coals, it trickles down the public perception and inside the company, negatively affecting the brand’s value proposition. “Nevertheless the converse is also true as the brand’s reputation can equally be enhanced with positive customer experiences and generally speaking we are incredibly fortunate to have the people within our organisation who choose us as their company of choice and who have been enhancing our reputation for the past 42 years. Pam Golding Properties is effectively involved in the livelihood of 10,000 people,” says Andrew. “It’s a huge responsibility.”
With Andrew already having been at the head of the company for more than two decades, the question of succession is tough to ignore. In the next generation, there are 10 grandchildren who could potentially put up their hands to take over the business.
“It would be nice if one or more of them stepped up to be a successor,” says Andrew. “That’s in their hands and the challenge is about ensuring sustainability of the business in the next generation. They will have to look at strategy, the business model and acknowledge the potential of disintermediation.
“My successor, whether that happens in five or 25 years from now, will need to have a different set of skills from mine. They will really have to want to make it their career and business life – because it’s family business, it is all consuming, there are no half measures and it’s not a nine-to-five business. They will have to be fully committed.”