Profile: Breaking the Rules With a Merger

March 1, 1996

Jack White Real Estate
President: Pat Swain
Location: Anchorage, Alaska
Size: About 80 salespeople

Does a week go by that you don't hear of another merger or acquisition in the real estate business? And expert after expert notes that the trend will continue.

If you find yourself considering a merger, whatever you do, don't tell your salespeople until all the details are final. At least, that's another thing the experts say.

But Patricia Swain ignored the experts, and she's sure she made the right decision. Swain, president of Jack White Co., and Ron Pollack, president of 2001 Realty, recently merged to form Jack White Real Estate, and the two brokers got their salespeople involved from the get-go. Jack White Co. had about 45 salespeople, and 2001 Realty about 35. Here are details on how they included salespeople in the decision making and the result for the new company.

Why involve salespeople? Our company had always been very democratic. There was no way we could merge without involving our salespeople. They would have been highly insulted.

How did you get salespeople involved? We set up committees. For instance, we had a committee dealing with the new commission structure. There were people from each company on each committee.

How did you bring the staffs together? Ron and I divided up the company, and several times a week, he'd take two of our salespeople and two of his salespeople to lunch or breakfast, and I'd do the same. That helped salespeople get to know one another and let them ask questions. A lot of them didn't want to ask questions in a big group, but on a more one-on-one basis, they did.

What problems arose? After about a month, we found ourselves battling rumors almost daily. When we heard about three companies in Nebraska that had merged, I called one of the brokers and said, "Help!"

He said one thing that worked during their merger was setting up a hot line and asking salespeople to call when they heard a rumor or had questions. Every night someone would listen to the hot line and put out a flash report to address the concerns. We adopted that right away, and that was probably the most critical thing we did. Within a couple of weeks, the rumors stopped.

How did you deal with salespeople's stress during the process? The week leading up to the announcement of the new commission structure was pretty nerve-racking. So we hired a masseuse, and everybody had a massage.

We also ordered several copies of a paperback book on the myths of merger. But rather than just hand the books out, we taped a copy under everybody's chair. We put different colored pipe cleaners inside the books. If you had a red pipe cleaner, you were a devil. If you had a silver one, you were an angel, and if you had a brown pipe cleaner, you were a sage.

We had the devils read the myths, the angels read the reality, and the sages read quotations from the book. We read the whole book, and the exercise got people to mix a bit.

Did you lose salespeople because of the merger? We lost three salespeople but gained seven from other companies.

How's business? Jack White Co. had about 10 percent market share before the merger, and 2001 had about 5 percent. Together, we have about 18 percent--20 percent share.

What tips would you offer other brokers? If you're going to announce a merger, about 60 days in advance is the maximum. If you do it much before that, people start getting very nervous and irritable toward the end.

Also, remember that things that don't seem very important can turn out to be more important than you think. For example, we had some resistance to our new logo, and I said, "It's OK. Salespeople will get used to it."

But we had a couple of meetings, and some of our people sent delegations to the meetings to stop the new logo. We redesigned the logo because we realized that if we tried to force it on the salespeople, it was going to be something we'd be fighting forever.

Who Ya Gonna Call? Stressbusters!

One thing that relieved stress during the merger of the Jack White Co. and 2001 Realty was wall painting. Architects had decorated the new office in a wild color scheme---yellows and oranges---that was very modern with lots of geometric designs. "You either hated it or loved it," says Patricia Swain, president of Jack White Real Estate, "and a lot of salespeople hated it to the point of being really vocal about it.

"So we decided to change it. But we didn't tell anybody. We just took paint and wrote graffiti on the wall. The salespeople were horrified, but once they realized it was OK, they wrote graffiti, too.

"People from all over the building came down to look at the wall. A local television station came and filmed it, and the daily newspaper also showed up. The next day, workmen came and paneled it, but the message to the salespeople was, 'This is your company, and we're listening to you.'"

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