Interview: Kevin Maggiacomo, CEO, Sperry Van Ness

Kevin Maggiacomo : I am currently the President and CEO of Sperry Van Ness International, I worked my way up the food chain at SVN, joining the firm on September 11th 2001 to help facilitate our national expansion. I later served as VP of our franchise business, EVP of SVNI, and COO before being appointed President last year. Prior to my time at SVNI, I served as an advisor for RTE Group, a telecommunications real estate advisory firm where I focused on the acquisition and disposition of critical network real estate, spent two years facilitating business development for Costar Group, and began my real estate career in 1995 at CRESA Partners, Boston. Mike Myatt: What do you see as your primary role as the CEO of Sperry Van Ness? Kevin Maggiacomo : I won’t bore you with commentary on the obvious role that I have as a CEO – Responsibility for creating the mission, vision, etc., as those are table stakes for the position. That said, one of my primary areas of focus is engaging the stakeholders by creating a culture of collaboration. Thorough and frequent communication with leaders of SVN offices and their advisors, chatting with their clients, leading by example, selling a point of view, and evangelizing about the brand, will help to facilitate strategy execution. If the construction of the vision and plans for the future play into the needs of all stakeholders, then strong adoption and organizational leverage will be the result, and I will have done my job. If I have failed, then splintered beliefs and an environment where everyone is not on the same page will rule the day.Creating a culture where the thinking of all stakeholders are leveraged, if done in a controlled environment, can be a powerful source of new ideas. Some of our strongest tools and initiatives have been developed by our Advisors. It is my responsibility to continue to ensure that our unique culture is preserved, to encourage outside the box thinking, capitalize on intellectual assets, and allocate resources in a way that provides for seamless execution of the company’s mission and vision. Mike Myatt: What do you see as SVN’s strongest competitive value proposition? Kevin Maggiacomo : This can be best answered by highlighting our new brand strategy and accompanying moniker, “Your creative edge.” “Your,” meant to communicate our undying focus on always putting the client’s interests first, and “creative edge,” meant to highlight our unique ability to be agile, quick to react, and progressive in this new and emerging market. Speed to market on sales and leasing transactions can mean the difference between a landlord retaining or losing a property. We use this as our guide as we develop new tools and cooperative methods of exposing properties.Our competitive value proposition, or point of differentiation, has always been strong and unique. We are the only national firm with a written policy which mandates that all Advisors cooperate on investment sales transactions, sharing the gross fees 50%-50% with cooperating brokers, and the only national firm with an integrated accelerated marketing, or auction division. Selling traditionally through the entire brokerage community or via an auction product are the only ways of effectively selling real estate today. While our competitors have begun to share fees (because the market now all but requires this), our difference remains in place with a brand known for creating organized competition by leveraging the entire brokerage community to sell properties – A company can’t just decide to change course and start cooperating and sharing fees. Years of doing the opposite creates a situation where a company must operate equally as long to change the perceptions of their employees, clients, and competitive brokers. Mike Myatt: Do you have a mentor, and how important was/is that person to you in term of your professional development? Kevin Magggiacomo : A handful of executives and family members, inside and outside the work environment, have assisted greatly in the shaping of my career and in me as leader. There are too many to mention in this context. I will say that I have long valued and sought out good coaches and mentors. I usually engage coaches for specified periods of time to help me with the execution of a specific agenda, and interact regularly and long term with mentors who serve as agenda free facilitators, providing me with affirmations, learning opportunities and other personal returns. Mike Myatt: You’re a big believer in social media, and one of the few CEO bloggers among your contemporaries…why do you feel this is important? Kevin Maggiacomo : It is tremendously important. Social media is not a fad and represents one of the most significant shifts in history in the way our clients, prospects, and competitors send and receive information. Brands can now be strengthened or eliminated by the use of social media, including ours. CRE has lagged behind the residential industry in terms of adopting new technologies and embracing progressive media, and SVN is entering the space early. Social media is like the “dot.com” boom of the 90′s only it is growing 10 times faster. It is a train that CRE executives and advisors must board or they will be left at the station. I Tweet, I blog, I read the Tweet’s and blogs of my competitors, peers, clients, and I communicate more effectively and am more informed about my business as a result.I often ask SVN Advisors, “Do you like what your clients and prospects are saying about your personal brand?” SM provides our advisors with a powerful opportunity to assess and positively impact their brands, provides a forum which allows them to establish credibility, and when embraced properly, can create speaking engagements, consulting opportunities, and real estate assignments. I think that all if this has now been termed “Socialnomics.”Last month, I set a goal for Sperry Van Ness to have a 100% Advisor adoption rate of SM by Q2, 2010. Our clients want unfettered access to their advisors across multiple mediums and we plan to give them exactly what they are asking for through social media. Mike Myatt: What books are you currently reading? Kevin Maggiacomo : I just finished reading The Killer Angels  by Jeff Shaara, a fascinating, historical Civil War novel which focuses on the four days of the Battle of Gettysburg. I am a big fan of military history, as many a great lesson is strategy, leadership, and execution can be taken from a look back at martial success and failure. Mike Myatt: What would you say was your “defining moment” as an executive? Kevin Maggiacomo : Executing the successful restructure for profitability of Sperry Van Ness. In late 2007, Mark Van Ness recognized the significance of the market correction, and called for a complete restructure of the SVN infrastructure and cost structure. For years, we had been operating our franchise business in the shadows of our corporate stores, when in reality, they are two distinctly different businesses. Working with the Sperry Van Ness founders, our board, and leadership team to reorganize, we made some tough decisions in late 2007 (before any of our competitors), and positioned the company to be stable in any market. We are now hitting our margins in this difficult environment, have cash reserves, zero debt, and an un-tapped line of credit. Mike Myatt: What do you see as your greatest leadership strength? Kevin Maggiacomo : Communication and presentation skills. Communication includes listening and putting into practice thoughts and ideas from various constituencies as we previously discussed, the presentation component serves as an important means to achieving total buy-in to the company’s mission and vision. If you surround yourself with talent, express a strong willingness to listen, and refine your ability to present the strategies which stem from that fertile ground, then you will do well as a leader in any business. Mike Myatt: Where do you the commercial real estate markets trending in 2010? Kevin Maggiacomo : I see volume picking-up measurably in late 2010. We will see fewer banks extending loan terms and maturities as pressure from the Fed for banks to address toxic loans on their balance sheets mount. We will see new investors – first time buyers and foreign investors enter the market at varying price points. Property values are in the trough or close to it, but values will take much longer to rebound and will be tied to employment metrics. Watch Temporary Labor numbers, which usually move 6-9 months ahead of Non-Farm metrics. Temp Labor improvements can signal the economy trending towards adding net jobs, as businesses are signaling that they have job openings but are using temp help to fill seats before taking the plunge and hiring permanent, fixed cost employees. Mike Myatt: If you could give one piece of advice to our readers what would that be? Kevin Maggiacomo : I’ll try not to be too cliche’ here. Getting outside of the comfort zone for leaders, new to the business advisers or investors is paramount to success in today’s economy. There will not be a return to the glory days of CRE and the ways in which transactions were consummated. Not going to happen. So, my advice would be to quickly change and adapt to the new reality. For brokers, it means pursuing smaller deals in the $1M-$5M category, which can be financed and are selling. For investors, it might mean taking a longer view of a prospective investment and increasing hold periods. For sellers, it might mean taking losses and redeploying capital and resources to the incredible buying opportunities that this market presents.Without being overly simplistic, I believe that those who are better equipped for surviving this downturn will survive. To strengthen that position and put it another way, those who change their approaches to reflect the new market, get outside of their comfort zones, leverage new resources, tools, talent and thinking will survive and thrive in 2010 and beyond. Those who do not are probably out of this business fairly quickly. The old ways in which properties were acquired and financed, brokered and appraised are gone, and they are not coming back. The need to change, to be creative, create new verticals and think outside the box is imperative. It’s the law of the jungle. It’s Survival of the Fittest real estate practitioners.ConclusionIf Kevin’s depth of articulation hasn’t impressed you, I can’t think of a better testimony to his leadership ability than guiding SVN to profitability, having cash reserves, zero debt, and an un-tapped line of credit during this difficult commercial real estate market. A job well done Kevin…