12 months ago things looked grim for the ESPC. A financial black hole threatened to engulf the group, and internal dissent led to the removal of its Chief Executive. The new man in charge explains how he kept the sparkle in the jewel of Edinburgh’s Crown.

To say the ESPC was on the brink of collapse is not an exaggeration. What baffled its members was how such a venerable and trusted institution could come do dangerously detached from their wishes and aspirations for their flagship property marketing service, a beacon of success in its former days, and a once shining example of how to do everything right. Yet last summer, amidst rancour over the integrity of its finances and rumblings of discontent about the surefootedness of its management the giant stumbled, fell to its knees and came close to keeling over as competitor property groups in the west extended their reach to tempt teetering members to the other side of the Harthill divide.

Drastic action was required, and Malcolm Cannon, with a background in whisky and wellies (professionally speaking) was the man handed the unenviable task of bringing the runaway elephant to heel. An hour or so in his company convinces you that they appear to have picked a formidable talent, who may indeed be just what the solicitor ordered to cure the ailing patient.

He came into post in September at a sprint that does not appear to have eased, and a clear vision about what was wrong, and what to do about it.

“It was very much about refocusing,” he told the Firm.

“ESPC is a fabulous business model that makes a lot of sense. The challenges that existed were financial. We had got ourselves into a pretty big financial hole through a combination of decisions which unfortunately went wrong. The board collectively were behind these decisions, which turned out to go bad for all sorts of reasons. That, coupled with the economic downturn really did put us in a difficult position.

“The membership were quite rightly worried about the future of the ESPC, and many of them would not survive and prosper in this market without the ESPC. They are much stronger with ESPC than without it. We are much better as a cooperative. There is safety in numbers. They wanted it to survive, but at the time the jury was out on its survival.”

When the Firm took the temperature of the Edinburgh property fraternity in November last year, we found near-universal desire for the restoration of the ESPC to its former glory, and widespread lamentation of some of its strategic decisions. As one practitioner put it, ESPC needed to get back to basics. Cannon, who has undertaken extensive efforts to speak to as many individual member firms as he can, is keen to reassure them that he agrees.

“In the past, the decisions that were made had been to diversify. The reasons for that series of decisions were to reduce the risk of being wholly dependent on one geographic area of property transactions, but in doing that, it almost diluted the whole power of the E&S of the ESPC. As soon as you start diluting that S, our USP goes,” he says.

“We had to stay focused on what we do best, which is marketing property in and around Edinburgh.”

The creation of a Home Reports package was one decision that went down poorly amongst some members. Investment in costly IT was another. From the outset, Cannon believed the way to recover the ESPC was to concentrate on the “core elements.”

“I did a presentation to 45 members when I had been in post six days, and I said exactly that,“ he says.

“We talked about refinancing, and said we would refocus on our three core elements, the website, the paper and the showroom. Everything else is marginal. Some of it is completely pointless and way too distant to be valuable, and we will put no resource behind them at all. We will focus on what we do best, which are those three routes to market, which are the things that differentiate us from everyone else out there.

“There was a slight frustration about all these other activities. Coupled to the fact that firms were all suffering a lot of personal pain from their own business being under pressure. It all came to a peak, and something had to give.”

That something was former Chief Executive Ron Smith, ousted in a coup from a bloc of 50 firms from within who called publicly for the entire executive management to quit. It would look like something of an intimidating environment to step into, but Cannon maintains that the role was always an attractive prospect.

“I wanted this role because ESPC is a fantastic brand, and my background is brands,” he says, with the portfolios of Famous Grouse, Macallan, Highland Park, and Hunter Wellington boots to his CV.

“With all those brands, you focus on what you do well. As soon as you start focusing on something else, you take emphasis away from what you do extremely well, and people don’t believe in the brand anymore.

“ESPC brings to mind, for people in and around Edinburgh, a lot of very positive messages. As long as we can emphasise and strengthen those messages. In some ways it an easy job: we have 200 member firms with phenomenal experience, ability and expertise in this market. My job is to make sure the ESPC brand is at the forefront of everything they do, at the forefront of people’s minds, whenever they think property in and around Edinburgh.”

He is also confident that he has communicated sufficiently with the membership to be sure that he is pursuing a strategy they approve of, perhaps the principal failing of the former administration, accused by its members of failing to listen.

“It is their ESPC. We are their club, and a golf club should never ever move the 7th green without asking the membership. Neither should we go down a route that is not in keeping with the membership without asking the membership,” he says.

“A lot of dialogue has started, which probably didn’t happen in the past because of enormous pressures in other areas. That has been the number one priority for me.”

The spectre of a merger or even a takeover of the ESPC by its west coast partner seemed a genuine possibility during 2009, but Cannon believes there is little prospect or appetite for such a move under his stewardship. He believes the option was only ever discussed due to the fragility of the ESPC at that time.

What happened before arose from the concern of Edinburgh members: what if ESPC disappears? There was a lifeboat there. That lifeboat is no longer required,” he says.

“We have natural boundaries which have developed over time and there is no reason that those boundaries could change. We have opportunities to work together with other SPCs, in lobbying, in combined services. We’ve talked with Glasgow about reducing costs to the two organisations sharing a service centre of some kind. Those opportunities still exist, but at the moment we have our own challenges and should focus on those. Once we get through this struggle period we can focus on where we can work together in harmony and independence, to reduce costs.”

Cannon is a powerful advocate and a committed leader. There is a solidity to his stare and posture that speaks of a considerable drive and determination to his character. Put simply, you wouldn’t want to argue with him unless you were on pretty sturdy ground. Those are solid attributes that are not always found in those whose task is to lead. The road ahead is not certain, but Cannon is at least convinced that the ESPC will go on, which is a statement that couldn’t have been made with confidence before his tenure.

We don’t doubt it.

Cannon’s Plans

“To have 80% of any market for any brand is incredibly powerful, whether its Tesco, Nike or Mars bars. 20% is usually what you are looking at to be a very successful brand. So you can’t criticise the previous management in terms of building that brand. But after 40 years it probably just needs a bit of a polish and some TLC.

“The products that go out with brand on it have got to be top quality. It was a two phase approach: make sure the products are the best, then shout about it. We’ve redesigned the website, redesigned the paper, redesigned the showroom and are looking potentially at moving it, all of which will make the products best in class. Then we’ll shout about them.

“There are things that we’ve been very “Edinburgh” about. Unbelievable statistics that could knock everybody else out of the water, but we’ve been so quiet and never told anyone. We have more properties under one roof over there on display than anywhere else in the world. Have we ever told anyone? 200,000 unique visitors a month to the website, which is probably ten times that of our nearest competitor. Have we ever told anyone? 120,000 properties in our paper every month, but we never tell anyone. Go to an ESPC company and you are handled by a lawyer, which has got to be better than an estate agent.

“I have spoken to the Law Society about introducing a charter for our members to improve delivery still further. They are quite behind helping us and supporting us.”