ERA's New Leader: From Independence to the Corporate World
ERA's New Leader: From Independence to the Corporate World
CHICAGO--When it named Peter Burgdorff the new president and chief operating officer of ERA Franchise Systems Inc., HFS Inc., ERA's parent company, plucked the head of a 32-office regional independent company from his New Jersey perch and put him in charge of a franchise network with 2,500 offices worldwide.
At the same time, the New Jersey-based HFS announced that Burgdorff, REALTORS®, with its 32 offices and 640 salespeople, would be operated under the ERA banner.
Just 28 hours into his tenure at ERA, Burgdorff sat down with TR Inc.'s Gabriella Filisko and explained why he took the job and where he expects to take ERA.
Why would you want to take over ERA when you ran your own company? You had it made. You didn't answer to anyone.
You answer to reality. You answer to the marketplace and 640 salespeople. You answer to having to do things right.
The decision to take this job had a lot to do with my view of where the real estate industry is and the challenges of running even a fairly good-sized regional company. It's becoming more difficult to provide salespeople with the resources to stay competitive.
My job kept me on my toes, because if I didn't do it right and keep the company profitable, I was toast. It's the same deal here.
There's been a lot of soul-searching, a lot of sleepless nights. But I wouldn't do it if I didn't feel as though I had support from HFS. I sat down with Henry Silverman, CEO of HFS, and said, ''Henry, what's your commitment to this thing, because I'm about to put my life on the line. What kind of flexibility do I have to run this company?''
His response was, ''I'm not going to give you an excuse if you fail.'' Which is wonderful because it means nobody's going to tell me I can’t do things. I can’t just spend millions of dollars for fun. But if I can support a plan, and it makes sense, I’ll be able to do it. My plan had better work. But that's the life I'm used to.
Were you thinking of joining a franchise before this offer came up?
I hadn't got nearly that far in my thoughts. HFS called me.
Why do you think HFS called you?
Probably because of my sheer brilliance and monumental success in our industry. Or maybe because they didn't have to move me!
Seriously, they wanted someone from inside the industry. I think that's crucial to delivering products and services to brokers—you need to know real estate inside your heart and not just in your head.
What’s your vision for ERA?
It involves some real quality issues. I want ERA to be the company that gives you as a consumer or as a real estate professional the confidence that you're dealing with the most ethical, the most professional, the best-trained, the best-equipped, and the most successful company and salesperson out there.
At Burgdorff, we built a whole business on integrity. To some degree--please don't exaggerate this--there was a mission to prove that you can be a real estate salesperson and be more than one step above a used-car salesperson. Now, can we bring those kinds of ideals on an international scale to ERA?
Does ERA have a problem with that now?
I don't think we have a problem with it, but we can take it significantly further.
Do you think the people at HFS understand the real estate business?
I'm surprised at how well they do understand it. When I first heard about these guys at HFS, the real question was, what are they trying to do? Are they in real estate just to own some things, suck up royalties, and have a distribution channel for their preferred vendors? Or are they really in our business? I've become convinced it's the latter. They want to make a change in our business.
What convinced you of that? A lot of people aren't sold.
They're not sold because they're afraid. HFS is changing things, and that causes fear. What convinces me is the time and effort they spent searching for me and the fact that they understood they had to get somebody from inside the profession.
And in the discussions I've had with HFS President John Snodgrass and Henry Silverman, they've said the right things. Now that I'm aboard, they still say the right things. The support's still there, and the respect is there.
You said they approached you. When they contacted you, what did you think?
My first reaction was, this guy's crazy. I'm an independent broker. I spent 21 years of my professional life in a certain mind-set. But the more I thought about it, the more I thought about the resources they have and their potential to influence the market and realized that if we convert Burgdorff to ERA, then in our market ERA has the Burgdorff reputation. The concept of taking that as a kind of flagship into all of ERA is exciting.
How do your salespeople feel about going from independence to a franchise?
Believe it or not, they're thrilled. Frankly, I imagined getting tomatoes thrown at me and everybody dashing for the door. Not to say anything bad about ERA. It would have happened if I'd said any franchise name. But there's real enthusiasm, because they believe what I told them.
That it was good for the company. I had a clear decision for myself, but I first had to decide what was right for the company and the salespeople, because I couldn't take a job that would be good for me but would hurt the people in the company. I just couldn't do that.
I said to the salespeople, ''You keep the Burgdorff name, the services, the integrity, everything you've got, but you add what ERA has. And if you really believe me that our business is changing and that we've got to change to keep a step ahead, come with me as we create a whole new model.'' And they said, ''Yes, sir!''
You've probably set some goals with Henry Silverman. What are those goals?
We're still working on specifics. Henry's expectation is significant growth, and my expectation is significant growth. I'm not ready to quantify it. But it's also the transition from the best company with a good image to one with a great image.
One of the challenges is that I've got to see what salespeople and brokers need. I think a lot of it has to do with training, and I'm going to focus real hard on that. It also has to do with getting significant, regionally strong players into the system.
You mean acquiring regional independents?
Either acquiring them or getting them on as ERA franchisees.
What's ERA's market share right now?
I don't have that number in my head. We have a very realistic chance of doubling the size of our network in a year or two. Before we do that, the goal is to be the best company. Market share will follow.
We should end up with the largest market share if we do our job right. Is that going to happen tomorrow? No. Will it happen next year? Probably not. But it's going to happen.
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