A Risk Management Benchmarking Survey in 2010 showed that 65% of businesses conduct no form of risk analysis prior to making major corporate decisions. While on 42% have any form of risk management audits or procedures. However, a study in the Accenture Global Risk Management Study in 2011 showed that for 98% risk was now seen as a higher priority than just two years ago.
A builder would never build, merchandise, and maintain a model without staffing it, would they? Of course not - this would be abuse of an asset! The return on this asset (ROA) would be zero, zilch, nada. No competent manager would ever allow an asset to exist without some expected return on that asset, right?Most builders expect their model, community, and marketing to return at least one sale per month and cover the bulk of the costs. Two sales per month break even, and three sales per month make it a profitable community. The numbers may va
When you look at your trade contractors, your suppliers, product distributors, what do you see? Are they a line item, an expense, a necessary evil or are they true partners? It’s easy to look at your drywall guy, your lumber yard or your window supplier as someone with which you simply do business with, but finding new ways to partner can be an important way to succeed.
Last fall the president of one of America’s “Top 10” builders who I have known for years corralled me at a conference. Because I travel this industry about as much as anyone, he likes to pump me for intelligence – as I do him. He wondered, what did I see out there? Who was making it? Who wasn’t? Which cities were ready to emerge and which were not? I gave him my take on things and then he asked a series of bombshell questions, “Who really impresses you? Who truly has the best practices?
Construction projects are complex in nature and prone to cost and schedule overruns. A significant factor that often contributes to such overruns is rework.
I catch myself from time to time spending money on things that I just don’t need to. Whether it’s the cool action video I think I will watch after the (wife selected) romcom, the twenty piece Mcnugget vs. ten, or the third hot dog at Home Depot, it’s all waste – well, usually anyway.
The NAHB in conjunction with Professional Builder Magazine launched the National Housing Quality Award (NHQA) in 1993 to encourage and recognize best practices and best builders in the continual improvement of product and process. Modeled after the Malcolm Baldrige National Quality Award, over time the NHQA has become the gold standard of awards in homebuilding.
Flat, team based and empowered organizations have the potential to out-perform tall hierarchical organizations in most every competitive industry and that includes home building! I have always enjoyed conversations on business improvement with Tom Gillespie, a NHQ Award winning builder, NHQA Judge and consultant. In this blog Tom engages us in a conversation regarding the importance and impact of flat, empowered organizations.
Why bother naming your houses? It would be a whole lot easier and more efficient to identify your homes by their square footage. It could be argued that the Saddlebrook should be called the 2429 plan. It makes perfect sense, the plan is 2429 square feet, so let's call it what it is. The purchasing manager, field supervisor, estimator and trades would love it. A simple designation for the plan that is clearly communicated and understood by all.
Process improvement can often be received with impatience and inflated expectations of its impact. One of the regular problems is that a particular piece of the organizations process is asked to be improved in isolation. This is a little like trying to change a wheel while the car speeds along the interstate! The one minor fix is still influenced by the wider system. It can take several improvements to elements of a process to see an impact overall. It needs to be realized that an entire process needs to be improved not just one element in isolation.
Let me be straight - I am anti-Net Promoting Index (NPI) in the home building industry and this is why...When I was a manager/leader/owner of a homebuilding company there was a recurring problem that I often saw (and personally committed). Too often, we would manage our company by average numbers. For example, let's say our Willingness to Refer (WTR) declined 5 points from 95% to 90%. We would become upset and meet with the Sales Team and Builders to tell them "we are better than this!" We were managing the company and staff by the average number.
Everybody loves a little extra Garage space. Custom home clients are requesting anywhere from three to six car Garages on a fairly regular basis. Having this many spaces can create challenges however; the extra spaces must look great, function properly and fit on the site. We took a unique approach to solving those issues on this “tight lot” custom home. Let’s take a closer look:
Often managers set goals for employees such as a minimum number of units to be produced each week and once this is achieved on a regular basis, then the minimum number is raised and so it continues. This is because of learning curve and assured by a time study. Sure, however, you are also establishing a never ending game with your staff. Management will always set a goal thinking that it’s one that will stretch us, they will always assume employees will try to play the game and work slower during work studies and so the cycle of gamesmanship continues. This really is about trust.
For the second week in a row I am featuring a skinny plan. What gives? Well I suppose as spring is approaching I am thinking of my own skinny plan; to be able to fit into my summer clothes. The fact that my wife just bought one of those torturous infomercial workout things makes matters even more pressing. Shedding a few pounds for the summer is nothing special but today’s featured skinny plan is. Let’s take a closer look:
Looking at this topic, I am reminded of my days as a security system salesperson. The sales pitch for a door-to-door salesperson is safety and security. If you had our system installed, you were assured that if someone tried to break into your home, the system would notify police and and bring help quickly. Knocking doors in the south, I quickly learned that the NRA sticker in the front window meant two things to me.
Checklists and audits may be one of the most basic approaches to quality but they frequently lead to problems of accurate data collection. A common issue that arises is not recording errors or defects in the field. Many trades that find an error when using checklists to review their work will correct a problem they find and not record it. They will say, yes BUT I found it, it was my fault and I corrected it, so it’s not an error!
I often wondered why a consulting friend of mine wrote of his miserable air travel experiences, and now I get it. The airline industry, with its product and personnel scenarios are a reasonable proxy for the homebuilding industry. How? Read on.As a Platinum level patron, I am often “upgraded” to first class. It is amazing how different the first class experience can be on the same airline, aircraft, and route. All else being equal, what is the determining factor? It is the personnel, of course! Take for instance
NHQ Award winning builder, NHQA Judge and consultant Tom Gillespie has developed a set of process diagrams that provide an overview of the intent behind each NHQA category and how it flows through each of the requirements. These outstanding process models help in the thought and decision process for performance excellence from strategic planning (see diagram for one example) to business results. Here Tom discusses how they work.
Our business picked up in late 2011, started the New Year off well, and we were deluged at the IBS show, beginning with a standing-room-only presentation on Lean Design. Our first quarter is strong and 2nd quarter looks even better. Builders seem to now have sufficient confidence that they want to get their processes “Leaned-up” to meet current and projected growth. We have a long list of clients who are reporting sales being up way above the national average of 8% reported for January and on into February. Yet the question persists … is this recovery for real?
Each week as I think about this weekly blog, I try to find a topic that is not only green, but a universal opportunity. What I mean is no matter how important green is to your company, market or consumers, these green tips should help you save money whether you want to be green or not. One aspect of green is finding ways to avoid cost increases.