If you've never been through a business start-up, you have no idea of the camaraderie that is formed in the heat of the fire, with the potential for failure lurking at your back. The people around you in such a crucible become like family and the person who pulls that group together takes on all the true and best qualities of a leader.

The right people with the right leader can achieve wonderful things, and that is what has happened at Wall Homes under the direction of CEO Steve Wall. The Arlington, Tex.-based move-up home builder started operations in April 2005, and during the three subsequent years it has grown to become the 171st largest home builder in the United States based on the 2008 Report on Housing's Giants by Professional Builder

Steve Wall

Leadership. Innovation. Proven Performance. Those also happen to be the criteria Housing Giants editors use to choose the CEO of the Year, which this year goes to Steve Wall.

The best measure of a leader is the quality of the people attracted to him, and Wall homes is characterized by people who are energetic, smart and driven by a sense of urgency — the kind of people any business leader would love to have sharing his vision.

Wall and his team also managed to create an innovative and efficient way to deliver customized homes in a production home-building environ-ment. They're walking the tightrope between controlled costs and out-of-control spending, but have established such sharp systems that home buyers can get exactly what they want while the company completely controls the construction process.

Wall left Choice Homes, where he had served six years as CEO, at the end of January in 2005. At Choice, he directed a company catering to the first-time home buyer, but he saw an opportunity to change the nature of the service to move-up buyers through the customization process and decided to launch his own company. It wasn't easy, though.

"I think the biggest challenge is you put a business plan together, you go out there, and we were in an environment in 2005 where everybody wanted to be in this space," says Wall. "There were a lot of people that wanted to do things. ... But getting things nailed down on how we were going to fund the company was a big challenge."

Getting the funding only took two months, with Wall putting together a deal with Warburg Pincus, which provided $50 million in funding. "I didn't have a date in plan because we didn't how when we would be funded," he says. In hindsight, to fund the company in 60 days would have been really ambitious, but it still seemed like it took forever."

Wall brought with him several colleagues from Choice, including Matt Bilardi, vice president of land acquisition; CFO Darris McClure; Erin Kolp, chief of staff; Kelly Pollard, director of purchasing; and Andrew Brimberry, director of information technology.

McClure says they understood they were doing something important at the time. "It is a unique opportunity when you have the chance to start something from scratch and make it what you want or to fit Steve's vision of what he wanted to see in a company or a product," he says.

After the funding issue was resolved, the team still faced two significant challenges. First, it didn't have any product to sell — no models, no communities. Second, the team had reputations from previous work, but no one had ever heard of Wall Homes because it had never existed before. (Bilardi notes that they discussed hundreds or thousands of names before finally settling on Wall Homes.)

"You think of yourself as a veteran," Wall says. "You've been doing this for how long, and you've got a lot people who have joined you who have been doing it forever, but you're a new company.

Not having models to sell, especially when the company was founded on the idea of being able to customize product, pushed the team to develop plans early. But in some ways the reputation issue was a larger one to overcome. "You can talk about the years of experience of people involved and use that to build credibility, but our salespeople were still telling us people were telling them, 'Gosh, you're a brand new company. I don't know.'"

He continues. "Other companies were exploiting that, which we would have if I were next door. That was one of those unforeseen challenges that I didn't think about: being a brand new company and convincing the public."

The necessity of getting product out into the marketplace and building a reputation created a palpable sense of urgency at the start of the company that carries through to this day. McClure explains, "You see builders that tried to change and go to different product lines, and that's not always easy. You even look at automakers — Mercedes, BMW, Lexus — they have a perception about quality of their product because of what they've done throughout the years." When they go down in price point, he notes, the reputation still holds. At Wall, they were serving a new market with a reputation built on personal reputations formed at a first-time builder.

Those initial difficulties were overcome by sheer effort and clear thought. Wall Homes has now closed more than 1,000 homes in its initial phase. The crowning cap and move that put them over the top was the 2007 acquisition of the Dallas/Fort Worth division of Newmark Homes. That delivered control of more than 3,000 lots and gave them entrée into many of the most coveted neighborhoods in the Dallas/Fort Worth market. Wall Homes market presence jumped from 11 neighborhoods to 33.

Three years into the start-up, the reputation of Wall Homes has been established, and a major reason for that is its ability to customize and deliver exactly what the buyer wants.

Customization is the root of the idea behind Wall Homes — the company tagline even reads "Your Idea of Home." The ability to change options is a trademarked phrase, "True Blueprint Change," meaning that if a buyer wants to move a wall, the buyer can move a wall. The company will change the blueprint.

As much as it focuses on customization, make no mistake, Wall Homes is a production builder. Wall believes the best way to build a home is in the production environment. "We've got neighborhoods where we're delivering homes from start to finish in 60 days," he says. "Ultimately, in our business, how quickly you can turn your assets and how quickly you can deliver a home is key."

Wall prices the standard models at a reasonable margin and a significant number of buyers purchase the standard. In the Dallas/Fort Worth market, that's about 22 percent of all buyers, but in the San Antonio andAustin markets it's nearly 60 percent. The difference falls in the ability to move a wall, change the plan, deliver the customization that buyer wants.

"The meat of our market is the between $200,000 and $400,000. What we're finding is people have higher expectations for what they're going to get. We're changing buyer expectations in general by what we're doing."

How does it work?

On the simple end, it's doing something for a little boy named "Champ." Champ's parents wanted to make some simple design changes, but in the process of reworking the blueprints, the designers printed "Champ's Room" instead of "Bedroom No. 3" on the blueprints. Suddenly, the homeowners' expectations of service changed. On the other end of the scale, a recent buyer wanted to change a rear-load model to a front-model. In the course of the design work, the designers had to change one whole side of the floor plan, swapping the garage for the first-floor master suite. Upstairs, the family needed to add a prayer room facing north. All of those changes were done after the contract and were priced based on a simple square-foot basis.

This process between contract and final blueprint approval is broken down into distinct steps, with each moment of the process tracked. Ideally, Wall Homes will be able to get that redesign process down to approximately three weeks, which is about the same time it takes for permitting. Along the way, the salesperson manages the process, making sure the customers — Champ and his family — get exactly what they want.

According to McClure, the hand-holding and manage-ment that goes on during this period also leads to lower cancellation rates than industry standards. "The buyer feels more invested in the process of the home than if I write you my check and you're going to build the house you're going to sell to me," he says. "I'm in the middle of this, and I'm emotionally invested in how my house is going to look."

Wall extrapolates further: "That's the benefit of doing it because you do it the way it suits the buyer. If they want a washroom or mudroom off the garage, maybe they're a big wine connoisseur and want a wine room. You can do those things at our price point. And that's the big difference maker. It's something they didn't think or didn't realize they could do at this price point."

There is, in addition to delivering what the buyer wants, another positive to this business model. The whole structure of Wall Homes is decentralized, with only 41 people in the corporate office

In fact, the lack of process frustrates Wall. "You take the concepts for the processes that you developed over years and years," he begins. "You start a new company and you get to do them again. Those processes are something that we don't ever feel are as good as they can be. ... If we can drop a step, we will."

Underlying all that success are the people, the team that followed Wall to this new adventure, the talent he's attracted since he started the business. Wall doesn't ascribe to the "Great Man" theory of business management, which states that every great company has a great man (or woman) leading it. He touts the great team and constantly refers to the quality and accomplishments of those around. "If I've done something well, it's to pick out a great team," he says. "I'll take the credit for that."

It is credit well-deserved, because the people at Wall Homes all share a common characteristic. Brigitte Doyle is the director of team resources, which in another company would be called human resources. "You'll see a lot of energy here. It's almost palpable. You almost feel as if even if people are sitting or standing, you feel like they're moving in some context, because there's some sense of urgency. A lot of our business is driven by time — time in terms of building houses, especially as a new company developing processes to accommodate what we do."

Darris McClure expounds on the idea. "Everybody is working toward the same end goal: to build a special company, to provide a special product to the customer. ... A number of us have worked together for a number of years, and so when you have things like respect and trust and a lot of energy, lot of drive, it's fun."

These self-starters view themselves as peers. Erin Kolp holds the title of chief of staff and is responsible for public relations, troubleshooting scheduling and general all-around keeping-the-ball-moving in any area it needs to be pushed. Says Kolp: "We're a very flat organization. We're all seen as peers."

Wall's management and leadership philosophies support this idea of the team concept. He gives incredible freedom to people on his staff within a very clear context of accountability. Lots of people talk about that, but Wall has two things going for him that many managers don't. First, the people on his team are self-motivated, energetic people with a sense of urgency, so they don't need to be given direct instructions to accomplish tasks. Second, Wall communicates through a shared vision with very clear goals that provide accountability. "Our division managers know what their targets are and what they're supposed to do. It's not just a sense of 'go do it your way and whatever you think will work.' There's a day-to-day and week-to-week focus. Every Monday morning we have a conference call, and we talk the metrics, the traffic, the sales, anticipated closings for this month and next month."

"It's a tough time to start a business in one way," he says, "but we've been able to get great people." He attributes that to a natural culling effect that has occurred from the economy. While some companies have discovered underperformers and let them go, other companies have placed the blame for a bad portfolio or a lousy market on good performers.

Wall recognizes it's difficult to identify quality people, and adds, "Sometimes you almost have to see someone in action in your culture, your scheme, your strategy before you can really evaluate them."

He's right to take credit for the team he's developed, though. And for that, as much as the innovation, and community service, and leadership, and the other elements of our award requirements, he deserves CEO of the Year.