Building Operations

Building Operations Blog for Professional Home Builders



I recently made the decision to relocate from Rochester, New York to Sarasota, Florida. Leaving annual accumulations of snow averaging 130 inches along with 80% of my days under grey clouds was my family’s motivation for the move. We couldn’t be happier. One of our new founded traditions is too be beach side every Sunday. Looking over the Gulf of Mexico is a certain fix for a hectic work week.

I wanted to share with my readers that I have come to appreciate a phenomenon that exist on the beach that is strangely similar to what you as a leader face every day in the workplace.

One of the advantages of consulting with businesses across the US is you see the companies that get it and the many companies that don’t. Sometimes observing the companies that will never understand the formula for sustained success can be very valuable. These companies take on values and beliefs that are easy to identify as the foundation of their lackluster performance but they haven’t a clue nor do they want to get it.

Most small to mid size builders today have found themselves without any internal professional Human Resource function. Either that function was a casualty of the many layoffs over the last 5 years or it never existed to begin with.

The builders, who remain in the game today, are alive because they utilized situational leadership during these tough economic times and focused on cost cutting, raising capital and finding that next buyer not employees.

Well ladies and gentleman, we made it through another year. A year of bankruptcies with several top 100 builders, uncertainty in the job market that generated 15% of our population into the poverty level and an economic future, thanks to our Washington politicians, that couldn’t look any bleaker.

Talking to builders today about improving the cost and efficiency can be an interesting proposition. When the topic is directed to managing a better commodity price, 6 out of 10 builders will respond as follows.” We are at the top of the food chain in market share in the areas we build and consequently have the leverage to obtain bottom prices from every sub and vendor in the marketplace” If I ask how they know, there response is consistent,” we just know”

In the Wall Street Journal on 10/24 an article was published indicating that 52% of US companies were reporting major difficulty in filling jobs. 47 % blame the lack of hard job skills or technical skills and 35% state candidates just don’t have the experience.

Not a day goes by that I don’t experience multiple builders telling me why improvement in their business won’t happen. The economy, the lack of traffic, the longer cycle times, the bigger builder cost advantage, the lack of commitment from employees, the lack of subcontractors performance, etc…… I certainly know that we all have suffered greatly through this housing depression. I am not suggesting we ignore the obvious obstacles, just not let them be the bane of our existence.

I recently saw the movie "MoneyBall" with Brad Pitt as the lead playing a GM of the Oakland A’s baseball team. For the readers who have not seen the film, I won’t give away the major plot and ruin your experience.

The film had many correlations to our leadership options in homebuilding. This is what struck me as being very relevant to our decisions as leaders today.

Recently, there has been a lot of press about football player’s compensation. Specifically, many of the new contracts written for superstar quarter backs have had press showing over $100 million to several hundred million dollar packages. What the press doesn’t tell you is the compensation is made up of a relatively smaller fixed salary with a huge variable incentive plan. Our industry could learn a thing or two regarding this sports model of compensation.

I recently conducted an online survey of over 1200 home building employees. The survey asked the question,” If the US market was good today, would you strongly consider leaving your current employer”? 

The options in answering this question were;

1.      In a Heartbeat

2.      Yes

3.      Maybe

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SUMMER 2020

This Month in Custom Builder

Products

Provides added protection against moisture and mold and allows for 
increased ventilation and drainage

Features

The philosophy of the German Bauhaus school of art and design drives this Dallas-based custom builder

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