Kaz Nejatian Reveals His Playbook For Opendoor's Turnaround — It Began With A One-Week Return-To-Office Order

• Nejatian said that Opendoor had become a company where employees were rewarded for creating processes rather than delivering results.
• He added that the transition also revealed a small group of employees who had kept the company afloat during its most difficult period.
• Nejatian said Opendoor has since rebuilt the company around a small group of exceptional individual contributors, adding that the company "would have died" without roughly a dozen of them.

Opendoor Technologies Inc. (OPEN) CEO Kaz Nejatian on Tuesday revealed the playbook he used to commence the company’s turnaround after he took over as its chief executive officer in September last year.

During an interview on The Knowledge Project podcast, Nejatian said that he began executing the turnaround plan for Opendoor with a one-week return-to-office order.

“Opendoor had gone fully remote. So at 9:00 a.m. that Monday, I told the entire company, ‘Hey, Open Door is going to be back in the office next Monday. If you don't plan to be in one of these offices, we appreciate your help, but you're no longer with us,’” he said.

Changing The Culture

Nejatian said bringing employees back to the office was only the beginning of a broader cultural reset.

He added that Opendoor had become a company where employees were rewarded for creating processes rather than delivering results. As the company shifted to a more outcome-driven culture that emphasized accountability and ownership, some employees chose to leave.

Rebuilding Around Top Performers

Nejatian said the transition also revealed a small group of employees who had kept the company afloat during its most difficult period. He recalled asking several exceptional individual contributors why they had stayed, adding that Opendoor has since rebuilt the organization around those employees.

According to Nejatian, the company "would have died" without roughly a dozen of those contributors.

He also updated the company’s career page, and instead of trying to attract potential employees, Nejatian said he tried to dissuade people from joining Opendoor.

“Opendoor’s career page now says ‘This will be hard.’ Our job is to attract people who want to work hard… we say this is not for you. My job is to try to convince you to not work at Open Door such that if you come you're highly committed,” he added.

Nejatian Blames Consultants For Opendoor's Decline

As he reviewed the company's finances, Nejatian said he discovered millions of dollars had been paid to consulting firms.

He argued that the advisers had pushed Opendoor to offshore jobs, expand general and administrative expenses, and cut engineering investment, which were moves he said hurt the company's ability to innovate.

Nejatian said he believes this pattern is common at companies where founders are no longer involved, or there is no major shareholder focused on the business.

Over time, he argued, such companies can become "hosts" for outside advisers whose incentives are misaligned with long-term value creation.

“I think this actually happens to a lot of companies where the founders are no longer there. There is no large shareholder that cares a lot about the company. So over time, many of these companies essentially become hosts for professional leeches whose job it is to suck the company dry while making management look good,” he said.

What Retail Traders Think Of OPEN Stock

Retail sentiment on Stocktwits around Opendoor trended in the ‘bearish’ territory at the time of writing.

OPEN stock is down 25% year-to-date, but up 37% over the past 12 months. The iShares Russell 2000 ETF (IWM) is up 33% over the past 12 months, while the Vanguard Small-Cap Index Fund ETF (VB) is up 22%.

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