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Core values drive growth and tough choices at PropNex
THE astronomic growth and expansion of PropNex Realty is so much driven by the discipline and core values of its leadership that its chief executive and co-founder Ismail Gafoor says there really is "no middle ground" in the company.
Mr Gafoor's unyielding stance in ensuring that the firm's management and staff are guided by a common set of core values has been a galvanising force bringing the company this far - from a small agency some 17 years ago to becoming Singapore's largest homegrown real estate agency serving the overall Singapore market.
Now, it is set to grow even bigger, overtaking ERA Realty, to become the largest agency of 6,688 agents. Some 80 per cent of Dennis Wee Group (DWG) agents crossed over following the merger of DWG and PropNex in June.
Despite such rapid growth and achievements, Mr Gafoor would only attribute the agency's success to being values-driven. "We have never felt we have arrived. It does not matter whether we are No 1 or 2," Mr Gafoor adds. "All rewards and recognitions are a by-product of anyone working passionately, with the belief of adding greater value to mankind, society and across the board.
"One of the mantras we always have is that the day when the company fails to add value to its people, it's the day when people should leave elsewhere for the sake of their loved ones."
The ex-army officer had embarked on the entrepreneurial path in 1996 when he set up Nooris Consultants with his wife after 13 years in the armed forces, leaving behind a stable job that would have earned him a million dollars in pensions at the age of 50.
Within two years of its inception, PropNex became the biggest Malay-Muslim real estate agency. But Mr Gafoor saw limited growth in this segment and the need to grow beyond, so he galvanised the support of four other companies to form a franchise under PropNex in 2000.
But under such a franchise model where different partners lack cohesive values, PropNex almost came to a standstill. While the individual firms were growing in profitability and number of agents, thanks to economies of scale, the franchise was on the brink of breaking up. Four of these agencies finally decided to merge in 2004 to form today's PropNex. This sparked off a journey of growth and expansion for PropNex in the past 13 years.
On what defines the running of the company now, Mr Gafoor neatly sums it up in an acronym "CARE", which stands for continuous improvement in everything it does; autonomy and entrepreneurship; respect and concern for every individual; and ethical conduct of business.
"I do like money but I am never blinded by it nor pray to money," Mr Gafoor quips. "The minute you have too much attachment to money and are blinded, you are likely to cut corners in terms of core values and in terms of whatever ethics in conducting of business."
Another major move by PropNex was in 2008, when it required all its agents to buy professional indemnity insurance for themselves so that their customers will be protected even if they leave PropNex. Most agencies, even today, only buy corporate insurance to cover them and their agents.
This attempt to champion the protection of consumers came even before the existence of the Council for Estate Agencies (CEA). However, the move cost PropNex the termination of 2,800 agents - out of some 7,000 agents at that time - because they refused to take up the insurance. Mr Gafoor's foresight, and that of his partners, also propelled the team to conceive a "dual career path" for agents in 2000, a policy that later became prevalent in the estate agency industry.
While he has the gumption to make things happen, Mr Gafoor is not one who will bulldoze his decisions through. There is a "think tank" group within PropNex he has to convince each time a major decision is to be made, with at least 10 persons having to buy into a new idea or proposal and adjustments to made based on their feedback. Any changes in organisational policies are communicated to its 100-plus team leaders every month.
The past three years have proven to be one of the most challenging periods in the real estate industry, following a series of cooling measures being introduced here and increased concerns over the continued relevance of property agents.
For a large agency like PropNex with high overheads from rental and staff costs, the temptation in such market conditions to scale down and spend less on peripherals was strong. But PropNex used it as an opportunity to empower its agents with the right set of skills, energy and focus and make them believe they have a role to play despite market conditions, Mr Gafoor says.
A series of initiatives to help agents was started, including boot camps to instil positive thinking and expand their capacity for training. "Huge amount of training with a negative mindset is zero. But good training and good mindset gives a 200 per cent," Mr Gafoor says. "So we have focused on two elements - one, to make agents think beyond the role of a middleman and two, teach them how to advise clients to manage and reorganise a property portfolio."
These efforts are yielding results. Mr Gafoor is confident that the agency will cross S$300 million in gross revenue from Singapore this year, up from S$278.9 million last year. The 21.5 per cent jump in gross revenue last year was bolstered by its high-end market penetration, new launches and HDB resale.
With its unique zonal focus strategy of ensuring agents are specialised in specific geographical zones, PropNex has seen phenomenal success in the Project Marketing segment since 2015, leading the sales performance among agencies for many high-end and local projects in Singapore.
A 2015 plan to grow regionally also resulted in the launch of its first master franchise in Indonesia across seven agencies. PropNex is now looking at expanding this franchise to Malaysia, Vietnam and Thailand.
Its choice of agencies in these markets to join its franchise is again governed by having the same set of core values, having a team of motivated staff and a desire to be the market leader in each market.
Internally, PropNex continues to build a core team of management staff who are aligned with its values, singling out good performance among its staff and agents, and promoting a culture of knowledge sharing.
"Core values can be printed and pasted on the wall but if they are not connected with the people, they mean nothing," Mr Gafoor says. "What we are trying to do here is it must be translated into activities, the conduct of our business, recognition and so on."