David Barista is Editor of Professional Builder, Custom Builder and HousingZone.com, properties that combined reach more than 200,000 residential design and construction professionals. David has covered the U.S. construction industry for more than a decade and has won numerous editorial awards, including two Jesse H. Neal Awards.
3 reasons why NHQ Award winners are faring better than most builders
Last month, the Professional Builder editorial team hosted judges for our annual National Housing Quality Awards program, which for the past 18 years has honored the best of the best home builders, remodelers, and trade contractors for their quality management systems and processes.
As past NHQA applicants and winners can attest to, this program is not just about winning an award — it’s about a journey that involves first self-evaluating your company’s management organization (during the application process) and then working hand-in-hand with some of the industry’s best minds (the judges, most of whom are past NHQA winners) to assess and improve your organizational management structure. Oftentimes, this process takes months, and many NHQA winners re-apply multiple times until they achieve their goal of building a total quality management system.
Bottom line, the NHQA program is the most cost-effective, holistic management consultation a builder can buy today. Each judge donates more than 100 hours of their time and travels on their own dime. Why? Because they believe in the importance of quality management and they want to give back to the industry.
No statistic is more telling of the power of quality management than the attrition rate among past NHQA winners. Of the 94 companies/divisions that received NHQ Awards since the program’s inception in 1993, all but six are still in business — an attrition rate of just 6.38 percent. Compare that to the attrition numbers reported in certain markets and submarkets — I’ve heard figures as high as 50 percent in some areas — and it’s safe to say that quality-driven builders are faring much better than the overall home-building market. Why? There are three primary reasons, according to NHQA Lead Judge Serge Ogranovitch:
Quality creates a well-rounded company. In order to win an NHQ award, builders must demonstrate to their peers that they have a well-rounded organization across eight critical areas: leadership, strategic planning, process management, customer satisfaction, human resources, construction quality, trade relationship, and business results. A well-rounded company is a healthy company.
Companies can quickly adapt to change. Having a sound quality management structure improves a company’s ability to listen to its customers, understand the market, and quickly and effectively adapt to changes in the marketplace. For example, when the housing market started to turn for the worst, many builders were overextended on land holdings, and a large number of them were not able to react fast enough to get out from under that burden. However, the majority of NHQA winners were able to quickly react and adjust.
Quality means continual improvement. Judges, through personal site visits and a detailed feedback report, assist companies with implementing effective continual-improvement strategies that help the organization grow and, in some cases, reinvent itself to take advantage of customers’ requests and needs. Companies that are in a continual state of improvement have a much better chance at succeeding.
If you haven’t considered applying for the National Housing Quality Award in the past, there is no better time than now. For more information, visit www.HousingZone.com/NHQA.