For a little less than two years, I led the 15th largest real estate brokerage firm in the US. It was an interesting departure from the day to day of home building consulting and it provided a real eye opener on the true relationship that exists between the builder and its broker sales arm. I also had the opportunity to look deeply into other large and small broker organizations through MLS boards and close networking affiliations. Here’s what I discovered.
I’ll get right to the point. Today’s business owners have lost a huge amount of loyalty, commitment and productivity from their employees. Leaders in the construction industry since 2007 have seen hundreds of experienced personnel either leave our industry or desperately hold tight onto their jobs while having to assume a 25% to 50% increase in scope of work with a reduced amount of compensation. As I talk to many professionals in our industry daily, I hear this common theme. “I am stressed, burned out and my boss only cares about himself”
During the housing boom, new products were being introduced into the home building market at a staggering rate.According to the Harvard Joint Center for Housing Studies (and oft-repeated by our columnist Mark Richardson), in a recent three-year period there were more products introduced than in the previous 100 years for the home building industry.
If you knew that were losing at least $5K per unit due to one single item of waste in your houses, would you do anything about it? How about $10K? The money is there, inarguable and undeniable, and we have the proof, yet a tiny percentage of builders understand it, let alone try to correct it. Even worse than that, most are afraid to confront it.
Disorganized and untidy job sites are covered with destroyed or damaged materials, reflect chaos between trades, reduce productivity and send the message to those homeowners beside and near your homes under construction just how their homes were built, not to mention are safety violation and injuries just waiting to happen. From another perspective, how much do you spend on marketing?
Headers, headers everywhere! Nearly every builder I have ever worked with (regardless of geography) initially had far too many headers and/or headers that were way oversized in their homes. Code requirements are typically 250 percent over failure, so designing above code is typically a waste. An exception is that there are pocket markets where customers require joist design a bit above code to avoid perceived floor deflection or bounce. It’s easy to do a quick check. Do a field walk during framing:
We spend a lot of time and effort training our teams and developing them in our culture and so the retention and ongoing development of our talent is critical. But to retain and continue to develop our teams does not just mean spending more money, which in this economy we don’t have. Treating people with respect and listening to them has a huge impact.
The construction industry dramatically impacts the environment, with buildings consuming 17 percent of the world’s fresh water, 25 percent of its wood harvest, and 40 percent of its material and energy flows.
Lots of matrimony talk lately. From the saccharin sweet royal wedding to the much publicized split between J’Lo and Marc Anthony - some marriages are meant to last while others fade away. The marriage that I am most excited about (save for my own naturally) is the one between Lean design and curb appeal. These two young lovebirds are guaranteed to make it for the long haul.
A discussion erupted this month on the LeanBuilding Group on Linked In about how do you define value to the customer? One of our members was assailing builders who go cheap, installing ubiquitous “builder grade” products. I replied that there are fine lines sometimes. One person's better value can be another's substandard. Not so long ago, vinyl siding was considered almost universally a cheap product. That is rarely the case now though.
I took a detour the last two years in my consulting career in residential home building by leading one of the largest real estate brokerage firms in the US. It was an interesting assignment but offered very similar challenges as what I have seen in the home building arena for the last 25 years.
We just caught wind of some big news on the customer satisfaction front: J.D. Power and Associates has canceled its 2011 U.S. New-Home Builder Customer Satisfaction Study.
It might not be exciting, it might be work, but a key to a successful builder and home is a strong set of Scopes of Work. Scopes ensure clear communication of what is needed by each trade. In the best cases Scopes use diagrams, photos, links to websites, and clear step by step instructions on what material to use, the stages of construction and installation. This can become the company Bible, every discussion leads back to the Scope. There are no arguments on site, rather it’s, what does the Scope say?
I am not a car nor am I a piece of meat, so please don’t service or process me, I am a customer! But those terms and attitudes still exist. I recently walked into a business and was greeted with, ‘name?’ To which I replied, ‘yes, it is a lovely day!’ Well that wouldn’t happen with your company I hear you say. Ok.
Twenty years ago, there was a project in Denver where the foundations began moving, to the point that several new homes had to be taken completely down. In the milder cases, the builder had to sink caissons next to the foundation as deep as 40 feet to stabilize them. The problem was expansive soils.
Lean Construction Drawings: 4 Elements that should always be there and 1 that shouldn’t - Lean Tuesday with Todd Hallett
Plans, plans, plans, it’s sometimes difficult to know what they should include and what they shouldn’t. After spending the last two years with Scott Sedam and TrueNorth working with builders, suppliers, and trades all over the country we have developed a number of plan dos and don’ts regardless of geography, here are just a few: Have:
How well are your values, policies and strategic drivers deployed within your organization? To consider this let use quality management as an example. So you have buy in from your management team about implementing or continuing quality management. You have connected quality focused strategic goals to tools for achievement and assigned leaders, timelines and metrics. Everything is rolling out! But just how well is this deployed and just what level of understanding and buy in is there really? There are 5 profiles of deployment success.
There are 4 key areas that make up the Quality Management Environment. Core Values Corporate Strategy Quality Performance Excellence Models Tools & Techniques There is a core of values and culture, surrounded by the other 3 areas. The core is where the mission and values of an organization are formed. Therefore, related issues like a focus on green building would be developed.
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As more organizations are being pushed to reduce costs while improving the quality of products so the management of change becomes more and more important. Kotter proposes eight steps to leading organizational change and avoiding key mistakes. Step one is establishing a sense of urgency by examining the market, competitors, and identifying potential problems and major opportunities.