Culture Transformation at newhome: A Journey from Crisis to Competitiveness
newhome.ch AG, a Swiss real estate marketplace, was established in 2013 to provide an alternative in the competitive real estate portal market dominated by a few large players. Initially, newhome was a small, agile startup backed by a handful of Swiss Cantonal Banks. The company thrived in its niche, operating under a freemium model that kept both costs and headcount low.
The Reality Check: From Ambition to Crisis
By 2019, growing concerns among Swiss real estate agents about the dominant portals led to a significant change in newhome’s ownership. Alongside the then 18 Cantonal Banks a few hundred real estate agents jointly invested in the company, fueling a vision to make newhome the number one real estate portal in Switzerland. However, this ambitious vision came with challenges that the company was unprepared for. Without the necessary capital, experienced personnel, and operational foundations, newhome quickly encountered severe operational and financial difficulties.
A 2020 Denison Model Assessment revealed a fundamental issue: newhome’s organizational culture was strong (see circumplex A) but misaligned with its strategic goals. The company operated in a “cocoon-culture,” where employees tried to protect themselves from external pressures, resulting in a lack of performance and competitiveness.
Turning the Tide: Leadership and Cultural Overhaul
In early 2021, Roman Timm took over as CEO. With the company on the brink of collapse, Timm knew that immediate and drastic changes were necessary. His first step was to abandon the unrealistic vision and mission that had been leading the company astray (see Circumplex B). Timm understood the critical link between culture and performance. Leveraging the findings from the 2020 assessment, he began by addressing the deep-seated cultural issues that had been holding newhome back.
To stabilize the company, Timm implemented several key changes:
- Management Restructure: The company transitioned from a rigid Scrum setup to a more flexible, networked organization. This new structure emphasized personal ownership over team ownership, with chapters of competency (such as marketing, sales, customer care, and technology) led by the most experienced individuals.
- Transparent Communication: Timm prioritized transparency and open communication, fostering a culture of trust and resilience. He made it clear to the team that while the road ahead would be challenging, they needed to stay united and focused. He ensured everyone understood their role in the company’s vision, mission and strategy.
- New Work Environment: The move to a co-working space surrounded by other dynamic companies was a deliberate step to infuse new energy and collaboration into the team. This fostered further communications amongst employees and created an environment rich with innovation.
- Adaptive Leadership: A “learn and adapt” management style was introduced, encouraging agility in responding to the real estate market’s volatile, uncertain, complex, and ambiguous (VUCA) landscape.
Building Momentum: From Survival to Success
By early 2022, a new, realistic vision and mission were established, gaining approval from the board. These guiding principles were consistently communicated to ensure every team member understood and aligned with them. The company’s values were also redefined to emphasize self-confidence, teamwork, transparency, and curiosity.
The most critical phase of the transformation came in the second half of 2022, when the company undertook a complete redesign and relaunch of its product offerings. This bold move, coupled with a significant price increase, marked a pivotal moment in newhome’s journey. The team, now fully aligned with the company’s vision and values, was ready to take on the challenge (see Circumplex C).
The Results: A Resurgence in Performance
By 2023, newhome’s efforts were yielding tangible results:
- Financial Turnaround: Revenue increased by 125% between 2020 and 2023. EBITDA and EBIT, which had been double-digit negative in 2021, turned positive by 2023.
- Market Growth: The number of searcher leads to agents surged by 130% for buying and 250% for renting. Business client numbers grew by 38%, and customer sentiment improved dramatically.
In early 2024, AXA Versicherungen AG invested in newhome. A clear sign of the company’s regained competitiveness (see Circumplex D).
2020 newhome.ch Overall
Circumplex A
2021 newhome.ch Overall
Circumplex B
2022 newhome.ch Overall
Circumplex C
2024 newhome.ch Overall
Circumplex D
Key Learnings: Culture as a Catalyst for Business Performance
Throughout its journey, newhome relied on the Denison Model Assessment to measure and guide its cultural transformation. The survey was used at critical junctures to assess the effectiveness of the changes and to ensure alignment between culture and strategy, ensuring the vision and mission were realized.
The transformation of newhome.ch underscores the importance of aligning culture to the dimensions of the mission (vision, strategy, goals). By addressing deep-seated cultural issues and fostering a resilient, adaptable organization, newhome survived a near-crisis and emerged as a stronger, more competitive player in the Swiss real estate portal market. The journey of newhome.ch is a testament to the power of leadership, clear vision, and a strong organizational culture in driving business success.