Rightmove … the home-buying portal, that is the world’s most innovative growth company 2017, according to Forbes

May 18, 2017

Rightmove, the UK’s home-buying portal with more property listings than any other platform in that country, has just been recognised as the most innovative growth company, according to Forbes Magazine’s annual ranking.

The London-based company was a first mover in online real estate listings, and it has capitalised on “network effects”, the idea that a platform grows more valuable with every additional user. Its CEO Peter Brooks-Johnson dislikes process and hierarchy and encourages employees to share ideas early, before they’ve spent so much time on them that others will be less likely to point out their flaws.

Network effects are especially powerful for platforms that connect sellers and buyers — as eBay has done with auctions, Airbnb with accommodation, and Uber with taxi services. As a platform for home buyers, and sellers, Rightmove is a textbook network-effects business. Having established itself as the tool to use because it’s the tool that most people use, it continues to grow at such a torrid pace that, once again, it tops the list. Rightmove established this prominent position because it moved quickly and staked out its turf when the World Wide Web was young. Back in 2000, its founders, acting on behalf of four intense competitors — the UK’s top four property finder companies — came up with plans for a shared portal for their listings that would give real-estate buyers a “one stop shop” to discover what was available. Rightmove was in the right place at the right time.

Brooks-Johnson’s first answer, at the same time, sells short what Rightmove has done consistently to remain king of the hill.  As professors, we have researched high-impact innovation for almost 20 years, and have seen plenty of companies with early, seemingly unassailable, advantages manage to mess things up.  So we decided to dive deep into the practices that help Rightmove sustain its innovation premium edge.

He is happy to oblige, while also signaling this will take us out of the realm of “practical, rational reasons” and into “more stylistic or almost emotional reasons.” People at Rightmove, he says, don’t only concentrate on the “what” of their daily work, but are encouraged to attend to the “how” of it, as well. And thus the conversation takes us straight into the territory of culture and behaviour.
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“I think we’ve managed to have a culture which is both restless and focused,” Brooks-Johnson says. The “focus” part is that “we know what we do, and we don’t go chasing other dreams.” Rightmove exists to operate a two-sided model serving, on one side, a vast “audience” for property listings and, on the other side, some 20,000 advertisers of available properties.  The “restless” part is that “at no point do we think we’ve ever, sort of, got there. We’re always on a journey to be better.” On both sides of the platform, the company constantly expands its offerings and features to better meet existing customer needs or to do a totally new job for them. Every year has brought increases in its average revenue per advertiser (ARPA) as it expands the repertoire of advertising products and packages available to customers to increase their brand exposure.

How does a management team keep fueling the engine of innovation? What works best, Brooks-Johnson is convinced, is not to impose common processes upon a fast-growing organization, but to encourage common behaviors within it. In fact, the company has outlined the specific behaviors it thinks give Rightmove a cultural competitive advantage (Brooks-Johnson credits Herbert Simon’s classic Administrative Behavior for providing a starting point on this line of thinking) and this list of behaviors provides the organizational backbone of its orientation, management training, and leadership development programs.

As an example, Brooks-Johnson talks about the behavioral impulse to “dare to do something.” This isn’t something that can be dictated by process; it has to be encouraged at a more fundamental level. Rightmove wants people to “be bold, do something, and don’t be afraid to make a mistake as long as you learn from it. Don’t spend forever talking about it.” That behavior might not be prudent in every kind of company, but, as Brooks-Johnson emphasizes, “in the world in which we operate, we’re so fortunate that we can experiment relatively cheaply with very little risk.” It makes more sense for innovation teams just to try something, then use the feedback to iterate quickly toward something better — rather than holing up in committee rooms “thinking for years and years and years …”

The same faith in iterative innovation shows up in another favorite Rightmove behavior: “share early and share honestly.” Brooks-Johnson says the point of this one is to urge people, as soon as they have an idea, to “share a sketch” of what they’re thinking with the people around them — a virtual prototype of the idea.  That allows those others to contribute to it, and build on it, while it’s still in a formative stage.  Too often, innovators hold off putting an idea in front of others until they have crystallized their thinking about it, and perhaps even prepared a beautifully written business case for it. But by then, Brooks-Johnson notes, “you’ve invested a lot in that thing,” and taken it past the point where others feel they can provide input. “Everyone you show it to is going to be a little bit intimidated, because clearly … you have more knowledge about that thing.”

And then there is the behavior that Brooks-Johnson seems to love best of all, so much so that he calls it the most important driver of Rightmove’s sustained innovation. “For me,” he says, “the magic ingredient is inquisitive listening.” By this he means something more than just being attentive when someone else is speaking. It is a habit of going through your day with the expectation that people have vital information to convey, which they might not be able or particularly motivated to make sure you understand.  Brooks-Johnson offers a recent example of tuning in more closely to a customer. The customer’s company should have been a perfect fit for a certain product Rightmove sells, but the customer commented off-handedly that it was “the safe decision” for him not to buy it. Brooks-Johnson was there to do other business, but the comment piqued his curiosity. By probing further he gathered valuable input for the product team, who quickly made adjustments that fixed the problem.

Technology and healthcare dominate this year’s list: Most Innovative Growth Companies

 

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