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The Visionary by Michaela Cordes | 1st June, 2018 | Personalities

Being in the spotlight and having to talk about himself is one of the things Christian Völkers tries to avoid at all cost. Instead, CV – as he is called by his employees – prefers to enjoy his free time playing polo and let his achievements speak for themselves. But to commemorate the 40th anniversary of his company Engel & Völkers, we were able to catch the founder, CEO and soul of the company to give GG an interview. A very personal conversation about difficult beginnings, daring ideas, the value of strong friendships and achieving a dream.

Europe’s top real estate broker, top seller of homes to the super-rich, chief officer presiding over 10,000 employees at 800 locations in more than 30 countries on four continents. Anyone who knows Christian Völkers a bit better is aware that such lavish praise makes this entrepreneur shudder with embarrassment. But as this year marks the 40th anniversary of his company E&V, it was worth a try to ask him for an interview. To show the passionate force behind Engel & Völkers from a completely different side. The person behind the visionary personality only a few people and close friends get to know and recognize. Christian Völkers and I grew up in the same neighborhood and have known each other for more than 30 years. Twelve years ago, he asked me to take over his magazine. A conversation between friends…

 

“Continuing to grow is no longer a real challenge for us. The issue we need to address and consider is: How will digitalization affect us, how do we preserve our business model and maintain our relevance for the next 20 years?” Christian Völkers

As a child, do you remember what you wanted to be when you grew up? Not exactly, but I was convinced from an early age that I wanted to do something special. Shortly after graduating from school, reality hit and I was forced to ask myself where this conviction came from and what it meant. I didn’t know. Making money had never motivated me, it was always a means to an end. I was more interested in building or developing something. I had a production facility of some kind in mind. In fact, I’m still fascinated by the process of creating a product, producing it, developing a marketing strategy and selling it. That’s what I had in mind. I never imagined my product would turn out to be the systematized, personnel intensive service – the most complicated of all. After training as a shipping clerk I quickly got a business degree and began working for Harald Grapengiesser at a Hamburg consulting firm, auditing American real estate funds. This was my first introduction to the subject of real estate. Around the same time, I was talking to Dirk Engel, an old friend with whom I’d grown up in the Elbe suburbs who had recently established the company Engel & Cie. He was trying to sell U.S. real estate to German investors as the exclusive representative of a U.S. broker in downtown Hamburg and things weren’t going very well. I was also dissatisfied with my job and after mulling things over, we decided to join forces and opened a real estate agency in the Elbe suburbs.

How many people were you in the beginning? Just four – Dirk Engel, Eva-Maria Haug, Gesine von Ehren and me.

I remember how you used to drive your red sports car around Blankenese (one of the Elbe suburbs) and confidently approach the owners of beautiful properties, asking them whether they might be interested in selling their homes. That was an unusual and almost American thing to do in such a staid, somewhat conservative community. You’re right, it really was a hands-on approach.

How did your parents react when you told them you were going to become a real estate broker? They were horrified and said: “What kind of nonsense is that?” All of a sudden, I had strayed very far from the path they had expected me to take after completing my commercial training and getting a business degree. They expected me to start working at a bank or go into the import-export business or corporate consulting. Some of my friends were going into the computer business, which was a very exotic thing to do. But to do a complete turnaround and enter the real estate business? What I really wanted to do in fact was start something on my own. After all, while I was training as a clerk I set up a small meat trading business.

Really? What do you mean? The father of a former girlfriend owned a big meat trading company – the Dithmarscher Katenrauch – and I had noticed that the meat that was delivered on board the ships was of very cheap quality, and that only parts of it were used while the rest was thrown away. There was too much waste. So I figured I could deliver meat in lesser amounts but of better quality. I did that for years and started earning good money while I was still quite young.

So that was basically the first time you successfully changed an existing structure? It worked well. What I learned from that practical experience was that you can improve processes if you go about it in a smart way.

 

“Engel & Völkers started as a group of friends with a vision. That spirit is still alive!” Christian Völkers

Have you always been fascinated by houses and real estate? No more and no less than anybody else.

You don’t seem to require a lot of square footage to be happy. In fact, you’ve been living in a small mews house in Hamburg for over 30 years. How much space do you need to feel comfortable? Personally? Very little. I currently reside in a former horse stable that I bought in 1985. While restoring it, I though very carefully about the kind of life I wanted to live and what the topic of this life should be. I didn’t want to build something modern but rather something that would suit the fact that what I was restoring a building that was quite old.

You seem to generally feel more at home in buildings that have a history rather than in modern architecture, am I right? Houses that are modern eventually lose their modernity and what’s no longer modern inevitably gets torn down. To me, a beautiful house must be timeless. If you restore it too vigorously, you are likely to skip considerations like patina and history. This is why we chose Richard Meier to be the architect of our new E&V headquarters. Meier still builds the same way he did 40 years ago – in other words: his designs are timeless and not modern at all. This way, his work will never become old-fashioned nor will it ever go out of style.

Holding on to the old-school way of how things are done – this seems to be a value system that you brought and continue to bring into the company. In all the years that I’ve been working here, I’ve seen very few people come and go. Yes, we certainly have a very low rate of fluctuation, that’s true. Perhaps this is because we have always kept an eye on two important factors when hiring people: a good education and a great personality! It has always been obvious to me that a person with a strong personality would promote the E&V brand most efficiently. And completing a degree or vocational training – regardless of the area or industry – is a guarantee that a person can learn. These days, new recruits learn most of the important things about how the company works by attending our E&V Academy, which offers specialized online and offline classes for our employees to take part in or attend alongside their regular work. This focus on personality has created a happy situation in which I enjoy being surrounded by my employees and am always on the look-out for interesting people who my company would benefit from hiring and who would enjoy working for us.

 

“During the E&V Polo Cup festivities I like to invite the same group of my oldest friends.” Christian Völkers

In 1986, eight years after you founded the company, Dirk Engel died. He committed suicide after years of battling depression. His loss must have affected you greatly, because you kept his name in the company name and have a portrait of Dirk hanging in your office to this day. Of course. We founded the company together and although it later developed in a completely different direction, the original idea was a joint idea. Dirk’s death devastated me. We weren’t just business partners, we were also good friends. On the business front, I was suddenly thrown into an entirely new situation because I wasn’t prepared to run the company by myself. I hadn’t been directly involved with sales and wasn’t a known entity in the market. That naturally posed a huge challenge. I had a lot of competitors come up to me during that time, saying: “We’ll buy you out, you don’t have a chance on the market by yourself.” I didn’t get a lot of encouragement. The core business was small but very profitable. In 1986, we probably had a revenue of around two million deutschmarks. And we were just a group of six or seven people.

After Dirk Engel died, you retreated behind closed doors for two months and wrote a book of rules and guidelines, the so-called Engel & Völkers primer. The E&V Academy and the company’s entire service framework is based on these 300 pages. Had you studied other service companies or brokerages before you wrote the “rulebook”? No, I didn’t model it on anything. Other people were selling the properties and they did so according to their own ideas of what would work. But when things started to become difficult for Dirk Engel and his depressions started to affect his work, I was forced to get more involved in the day-to-day operations of the company. That’s when I realized that taking a more structured approach to the process of house viewings and asking customers all the right questions at just the right time would make for better customer relations and result in better sales. I was suddenly convinced that providing just the right service in just the right way would work wonders and improve results. But at the same time it became perfectly clear to me that there were limitations to what I could personally manage in a growing company because I would never be able to handle each customer all by myself. So in the end, I had to give my customers over to Eva-Maria Haug or Gesine von Ehren, our only employees at the time, and off they went to the house viewings. That was when I started asking myself: Wait a minute, you have no idea how they’re treating my customers and what they’re telling them! I realized that I was completely in the dark. I decided then and there that I had to find a way of making sure they were doing things exactly the way I wanted them to and no other way. So I flew to Mallorca, where I locked myself up in my parents’ house and proceeded to write down the perfect system for providing the best service that E&V offers today. It was a kind of primer in which I described every little step right down to the last detail. Because providing the perfect service is not just about little things here and there, it’s about putting together a collection of details that work together to create a whole. It’s like a total work of art.

When did you first start to understand that you could grow E&V into a big company? When we realized that what we were doing with five people could also be done successfully with 50. I built up a large group of young people with great personalities, people who had grown up close by and knew the area, who set off to deliver the same kind of brand experience to all of our customers. To our customers it was groundbreaking, and they would say things like: “That’s wonderful, you don’t just sell houses, you solve problems and before we knew what had happened, we had bought a new house!” We soon realized that an approach that worked for one customer would also work for hundreds of customers, and so it was suddenly perfectly obvious that E&V could become a very large company.

 

“Of course I could just go and sell the company – but nothing could be further from my mind.” Christian Völkers

The first big leap you took was moving from the first five offices into the E&V Shops. We took that first quantum leap in the late ’90s, but when we did so, we also came to the painful realization that the young people we were employing, whose average age was just a little over 20, were not up to the job anymore. These young people all lacked something fundamental: credibility and the experience that comes with age. Because when you’re dealing with customers who are looking to buy or sell premium real estate, you have to be able to communicate at eye level. And there was no way that customers were going take advice about what house to buy from students and trainees many years younger than themselves, no matter how well educated they might be. When hiring new people, we chose them from the same background as before but made sure they were just that much older.

Then one day, your current business partner Alexander Lampert showed you a copy of the biography of Ray Kroc, the franchise genius who made McDonald’s so successful, and proposed: Let’s do that too! Were there ever any moments in your career when you thought: Oh no, I think I’ve bitten off more than I can chew? Sure there were. Every time we set out to make major changes. When we introduced the franchise system, for example, we had to give up the offices that were doing well. Instead of enjoying the profits, we started charging a licensing fee. But we had to hang on to the offices that were operating at a loss. So our profits shrank but our losses remained. It didn’t take us very long to learn that you had to have at least 70–80 franchise offices in order to cover your costs. Hanging on to offices that were losing money while at the same time expanding from 30 to 80 offices was a huge challenge at the time.

Is there someone in your life whom you look up to, someone who has always been a role model for you? I have been very fortunate to be in a business in which I happen to make contact with personalities who are both successful and wealthy. What I have envied and what has impressed me most about them more than their fortune was always their wealth of experience: the great many things they had done and seen, and how often they were able to make the right decisions based on all their experience.

Great success goes hand-in-hand with envious reactions – how do you handle such reactions? I’ve experienced envy, of course, but I just try to shake it off. When I started out, I was so convinced that my idea would work, I talked about it to everyone I knew, whether they wanted to listen to me or not. Many people responded by saying: You’ll never get it off the ground. It wasn’t so much envy back then as skepsis. But it all took a long time. Today we have finally arrived at the point that I was hoping we would eventually get to years ago already. I thought it would be easier and happen more quickly, but you always encounter dead ends and have to crawl out of them. After you’ve made a bad decision you have no choice but to straighten things out again. The road to success was never straight at all, and often paved with difficulties.

Over the years you have created a second home for yourself on the island of Mallorca, far removed from the people in Hamburg society who can make life difficult now and again for a young and visionary dreamer. There are lots of good things to be said for Hamburg, but there’s also something very limiting about life there. Any attempt to stray from the expected path – at least that’s how it was in the early days for me with E+V – is quickly discouraged. The island of Mallorca became a second home for me at a relatively early age when my parents bought a house near Felanitx. I was 14. There was a kind of Robinson Club nearby where I used to give tennis and windsurfing lessons during my school vacations. In the ’90s, when I was looking for a property to buy, I made a specific  point of avoiding “Hamburg Hill” on the eastern side of the island (Editors’ note: This is an area populated mainly by other people from north Germany) and concentrated my search for a pile of rocks that I could make into a home on the western side of the island. I drove down every dirt track I saw, looking for an old house that would fire my imagination. The first house I saw, someone else bought more or less right from under my nose, but then my office manager on Mallorca showed me Son Coll. And although it was a ruin and I wasn’t even able to inspect the interior, I fell in love with the property immediately. I thought I would die if I didn’t get to buy this house, and so that’s exactly what I did a few days later.

At the time, were you already planning for Son Coll to become a platform for your company as well? It didn’t take very long for that idea to hit me because I was quite close to many of the people working for E&V and the company at the time was a big, colorful circle of friends. We didn’t go into the office to “work,” we were all driven by a desire to achieve a common goal. So it was natural that at one point or another, many of my employees came to Son Coll. Some of them even brought their own furniture along from Hamburg because the place was still a ruin. I was one of the first people back then to set themselves the task of carefully restoring an old Mallorcan manor house and worked closely with the Mallorcan architect Toni Obrador. Later on, he began working with more and more clients who were interested in restoring old Mallorquin estates, including my neighbor Michael Douglas and the photographer Francesco Venturi. What started out as a small group of people with a shared passion developed into a large, international circle of friends. And thanks to the many intense weekends we devoted to E&V business at Son Coll, the house eventually took on greater and greater significance for the company as well.

Every summer for the past nine years you have hosted a party in your Mallorcan garden and invited guests – including all your license partners – to attend the Engel & Völkers Polo Cup. What does polo mean to you personally as a sport? If I have time, I play a game of polo every morning in Hamburg before going into the office. It’s my escape, a way to switch off completely and just concentrate on the game. I started playing polo many years ago after having played tennis and hockey and being quite familiar with horses. Polo brings everything together, it’s a perfect blend of adrenaline and strategy. Having the opportunity to play polo on Mallorca is a luxury to me. My house is always filled with my old friends during the E&V Polo Cup competitions. In the old days, those friends were all bachelors and we always had a big party. These days they bring their wives and children when they come to visit, and some of their children even join us today on the polo field.

Switching off completely doesn’t come easily to you, does it? I never used to be able to stop working, and back in the early days, I remember wishing that someone would invent two hoses, one through which you could be fed your daily dose of necessary food and another through which you would receive all the sleep that you needed so that you wouldn’t waste time eating and sleeping and could keep going without the need to stop. Today I’m still someone who has to be constantly in gear. Having to spend two days in one place without something to do makes me very nervous. I much prefer going to my office and getting some work done! In fact, there are only two places in the world where I really feel content: at the office in Hamburg and at our finca Son Coll on Mallorca.

 

“When my first child was born, I was delightfully surprised by a whole new and exciting chapter.” Christian Völkers

You became a father quite late when you turned 50. How did fatherhood change you? I am and have always been a very goal-oriented person. Becoming a father was not something I had originally set as one of my goals. I actually thought that having a child would lead me off the path and make it difficult to achieve my other goals, but having children made me all of a sudden realize that being a father opened up a whole new chapter in my life, a chapter I didn’t know even existed. I hadn’t been able to imagine this before, and only realized it when my son Oscar was born. Today it’s a wonderful thing to have found the answer to the question: “Why am I here and doing all of this?” I now have a better sense of the continuity of life and find myself seeing things in a very dynastic way. Of course I could just go ahead and sell the company, but nothing could be further from my mind.

Do you hope one day to see one of your children taking over E&V? I would like that very much, but I don’t think it will happen, because the task is so complex and it would be pure coincidence if one of my children felt up to it. But it would also make me happy if they found a place for themselves within the company, an area that struck their interest and which they could manage responsibly. I think the company should be run by someone who is qualified first and foremost and not by someone who has inherited it. If both these things came together, I would naturally be very pleased.

What do you regard as the biggest challenge for the company today? Growing the company further is no longer a real challenge for us. Today we have more than 10,000 employees at 800 locations in 30 countries on four continents. The issue we need to confront and consider over the coming years is digitalization, and what I’ve been pondering are the answers to the following questions: How will the digitalization of the world affect our business and how far do we have to think into the future? How do we preserve our business model and maintain our relevance for the next 20 years?

What would you say are your biggest achievements for you personally? What makes me happy is seeing that my theory about developing a perfect, systematized approach to customer service was correct. And that we succeeded in pairing this with a strong global brand. Moving into our new E&V headquarters in the HafenCity area this summer will be a special event for me personally. Our new head office will be a building where the E&V brand will really come alive. On a more personal level, I enjoy the company of my circle of friends that I have purposely kept small because there’s not much space left in my life for new people. I have five or six close friends whom I enjoy spending time with and for whom I always will make time. And I am pleased to have found spots on this planet where I feel most comfortable and at home – Hamburg and Mallorca. And of course there’s my family.

 

IssueGG Magazine 03/18
City/CountryHamburg/ Germany
PhotographyMark Seelen