Builder Top 5 Concerns & Solutions for 2016 · Invest in Your Team Members Invest in your Trade Partner’s success TEAM: Together Everyone Accomplishes More Cooperative team approach

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Builder Top 5 Concerns & Solutions for 2016

JANUARY 20, 2016 || 3:00 – 4:00 PM

Presenter(s):

Keith O’Brien|| Woodland, O’Brien & Scott,

Charlie Scott|| Woodland, O’Brien & Scott

Will Holder|| Trendmaker, Houston, TX

Laurence Wisdom|| HHHunt Homes, Richmond, VA

Session DescriptionSession DescriptionSession DescriptionSession Description

This session will:

� Present the findings from the annual Woodland,

O’Brien & Scott Homebuilder Executive Survey.

� Have Builder panelists share their company

profiles then discuss how they plan to address

some of the survey’s concerns in 2016.

The Woodland, O’Brien & Scott Annual The Woodland, O’Brien & Scott Annual The Woodland, O’Brien & Scott Annual The Woodland, O’Brien & Scott Annual

Homebuilding Executive Survey Looks At:Homebuilding Executive Survey Looks At:Homebuilding Executive Survey Looks At:Homebuilding Executive Survey Looks At:

1)Year over year Sales Changes

2) Year over year Sales Backlog Changes

3) Areas of 2015 Performance Slippage

4) Builder Top 2016 Concerns

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The Good News as The Good News as The Good News as The Good News as

NAHB NAHB NAHB NAHB sees sees sees sees itititit…………(% shown as the % of peak)(% shown as the % of peak)(% shown as the % of peak)(% shown as the % of peak)

The Home Building Executive Study

30 Builders in 55 Markets

Study Considerations:

1) Primarily Private Home Builders

2) As Woodland, O’Brien & Scott clients

the study is skewed toward Customer

Centric Companies

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The Home Building Executive Study

30 Builders Representing 55 Markets

87% improved by

An average of

+26.4%

The Good News as The Good News as The Good News as The Good News as

the ES Study the ES Study the ES Study the ES Study Indicated 2Indicated 2Indicated 2Indicated 2

25% Growth for Customer25% Growth for Customer25% Growth for Customer25% Growth for Customer

Centric BuildersCentric BuildersCentric BuildersCentric Builders

2011 2012 2013 2014 2015

250

225

200

150

125

100

Homes sold:

NAHB Average NAHB Average NAHB Average NAHB Average vs.vs.vs.vs.

Customer Centric BuilderCustomer Centric BuilderCustomer Centric BuilderCustomer Centric Builder

68%

225%

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1) Year over year Closings Changes

2)Year over year Sales Backlog Changes



2011 2012 2013 2014 2015

100

80

60

40

20

0

Sales Backlog:Sales Backlog:Sales Backlog:Sales Backlog:

33

53

72

92

99

2011 2012 2013 2014 2015

100

80

60

40

20

0

Sales Backlog:Sales Backlog:Sales Backlog:Sales Backlog:

33

53

72

92

99

+300%*

How could

Sales be up

225%, but

backlog up

300%?

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2015 Areas of Performance Slippage2015 Areas of Performance Slippage2015 Areas of Performance Slippage2015 Areas of Performance Slippage

1) Cycle Time 48%

Percentage of Respondents

2) Profit

3) Land

4) Staff

5) Customer Sat.

39%

36%

32%

Cycle/Trade time: 5% or 9 days to 180!

Hard costs, variances, cycle time & systems stress.

Affordable, supply, & slow new communities.

Turn over = 22%, capacity, hiring & training

Ratings declined another 3-5 points

44%





3) Areas of Performance Slippage

4)Builder Top 2016 Concerns

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Debt!Sales

Oil

Prices!Employee

Satisfaction

Structural

Failures

2016 Areas of Top Concern2016 Areas of Top Concern2016 Areas of Top Concern2016 Areas of Top Concern

1) Trades 65%

2) Land/Lots

3) Employee/Staffing

4) Non-Controllable

5) Customer Sat.

58%

31%

31%

27%

“Short runway,” Pricing, Lead Times

H/C, Cycle Times, Shortages, Quality & Cost

Retention & Capacity

Oil, Election & Economy

Weaker: Cycle times, PQ & Warranty

=

Percentage of Respondents

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2016 Areas of Top Concern2016 Areas of Top Concern2016 Areas of Top Concern2016 Areas of Top Concern

1) Trades 65%

2) Land/Lots

3) Employee/Staffing

4) Non-Controllable

5) Customer Sat.

58%

31%

31%

27%

=

Larry

Will

Will

Therapist or CharlieTherapist or CharlieTherapist or CharlieTherapist or Charlie

1991

Looking back 25 years the 24 hour

news cycle was “born” with the Iraq

war. Since that time, potential

buyers have been inundated with

nearly constant messages of fear…

Spring has never been the same…..

OIL

www

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In 1984 we struggled to buy our first investment into our

futures – 30 years of wonderful homeownership and

enjoying the American Dream……..

Unfortunately, today due to the negative news 24/7 that

American Dream must be sold.

January 2016

It is up the US Home Builder to combat the endless cycle of

media fear and reignite the American Dream.

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How do we sell it?

1)Reject Fear Mongering and the 24/7 cycle.

2)Replace customer fears with ownership benefits.

3)Sell “The American Dream” as a solution.

4)Have ENTHUSIAM about America and

the American Dream!

5)Start Now- by listening to these great speakers….

Will HolderTrendmaker Homes

[email protected]

b

Customer Satisfaction

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#16 Houston builder by closings

#8 Houston builder by revenues

150+ Employees

Established in 1971

Located in Houston & soon Austin

Division Operations include:

-Merchant Homebuilding

-Merchant Land Development

-Average 26 Communities

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Customer Satisfaction = Employee Pride and Satisfaction

Customer Satisfaction = Fewer “Issue” Distractions

Customer Satisfaction = Fewer Legal Expenses

Customer Satisfaction = Best Marketing Ever!

Customer Satisfaction = ?

2008 through 2011 Recession

Trendmaker Sales Source:

Happy Customers are your down market safety net!

Direct Referral 30.6%

Builder Reputation 24.9%

Sales From “Word of Mouth” 59.5%

Key Elements to Measure

Measuring Process Performance:

• Organization of the Buying Process

• Home Delivered When Promised

• Accuracy of the Sales Presentation

• Overall Teamwork

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Measuring People Performance:

• Communications & follow through by Sales

• Would you refer your sales person

• Communications & follow through by construction

• Would you refer your construction supervisor

• Building Company’s concern for Satisfaction

Measuring “Quality”:

• Quality Vs. Expectations

• Condition at Pre Move-in Inspection

• Condition of the home at move-in

• Cleanliness of the home

• Condition of Interior Painting and Wall Finish

• Any other item you’re worried about, i.e. landscaping

How to use the data:

� Communicate the results broadly and often!

� Make high scores a requisite to employment.

� Financially incentivize the desired results.

� Target items until fixed, then move on to new ones.

� Focus on eliminating “Bad & Very Bad” scores.

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Customer Satisfaction Must Include:

• Complete cultural saturation

• Processes matching your organization & market

• Very organized customer communication

• Happy employees

• Willingness to have low stress, low legal bills, long term employees

and better margins from sales where customers seek you out.

Annual Starts vs. Deliveries, Houston

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Starts

Lot

Deliveries

Speaker Contacts:

Laurence WisdomHHHunt [email protected]

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Attract and Retain Top Talent

CREATING A CULTURE of 1st Choice

for Employees & Trades

Top concern: attracting and retaining top talent

It’s a matter of choice…

Our employees have a choice…

Our trade partners’ employees have a choice…

How do we inspire them to choose us First…

Everyday

How to attract & retain top talent consistently

Strive to become:

• Employer of Choice

• Builder of Choice

• 1st Choice, Everyday

Build your knowledge

Create a culture of 1st Choice

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Everyone knows. Do you?

Do you know what your employees and

trade partners know?

A culture is: The values and practices shared by a group

A home building company’s culture therefore is: The shared

values and practices of the company’s team members

A company’s team members are: Everyone who serves

together as a team to achieve the company’s desired goals

Culture can make or break a company

An adaptive culture which is aligned with clear goals routinely

out performs competitors - as much as a 200% difference

To achieve results like this:

� What are your company’s shared values and practices

� Decide what your shared values and practices should be

� Move everyone collaboratively toward those desired

values and practices

Start with the foundation

Clarity of Mission and Vision

�Mission - Purpose to exist

�Vision - How we see our destination

�Together – Create a culture to achieve your

mission and vision

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HHHunt Homes:

We improve lives by

building excellence every day

in our relationships and products

Higher Purpose

+ High Performance

= Higher Rewards

Give them ownership

• Know what the company values are

• Know what is expected of them and why

• Know where they stand

• Know where the company is going and how their

role contributes

Tie performance coaching specifically to shared values and

practices.

How to recognize a culture of 1st Choice

Team members are highly valued every day

Team members highly value each other every day

Team members practice Excellence every day

Team members celebrate WINS every day

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Employee Centered - Brand Promise

Annual Kickoff

Meetings

Development

Plans

DISC Profile

Onboarding

Checklists

Internal Webinars

Education

Assistance

EQ Training

Monthly

Newsletters

Values Based

Leadership

Wellness

Challenges

Weekly President

Emails

Community

Involvement

Personal and Professional Employee Development

Values and BP

Behaviors - IP

Competencies - IP Perf Mgt Process -

IP

Mgr/Leadership

Dev Prog - IP

Recognition

Programs

Succession

Workshops

• Communication • Collaboration • Continuous Education

Invest in Your Team Members

Invest in your Trade Partner’s success

TEAM: Together Everyone Accomplishes More

� Cooperative team approach

Part of the company

� Just like an employee

Respect the trades

� Everyone is contributing

Sharing both good and bad

Let trades participate in issues affecting them

Encourage trade cooperation COMPLIMENTS OF:

Invest in your Trade Partner’s success

Quarterly trade partner & crew breakfast

� Mission Statement

� Goals and objectives

� Review for last quarter

� Forecast of next quarter

� New initiatives

� Open questions and answers

Establish a trade council

� Allows for trade input

� Mutually discuss initiatives and issues COMPLIMENTS OF:

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What is the Value Score Card?

Generally

Results oriented SCM tool founded on principles of:

● Transparency ● Value

● Equity ● Objectivity

Specifically

Data driven vendor comparison, selection, and management tool

Not about total cost – instead about total value

How does it work?

Allocates Value to 6 factors of vendor performance

● Safety ● Service

● Quality ● Key-Relationship

● Capacity ● Cost

Each factor (rated 1-10) is:

Weighted by relative importance

Fed by Key Performance indicators from other areas

of the business

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What are the benefits?

Improved Value

• Creates Competitive environment – While never being

“just about price”

• Requires continual improvement – vendors “earn

the business”

• High level of transparency (Internal and External)

What are the benefits?

Improved Outcomes

• Drives Improvement in each of the 6 areas

• Provides a foundation for each decision and

conversation

• Details the areas of improvement necessary to answer

the trades most common Questions of:

“What do I need to do to earn more work”

Everyone Matters

Invest in yourself – accelerate professional growth

Invest yourself in your team – accelerate professional growth

“You don’t build great companies,

You build great people,

People build great companies.”

-Zig Zigler

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Charlie ScottWoodland, O’Brien & [email protected]

Speaker Contacts:

Will HolderTrendmaker [email protected]

Laurence WisdomHHHunt [email protected]

Please

complete the

program

evaluations!

Documents

Builder Top 5 Concerns & Solutions for 2016 · Invest in Your Team Members Invest in your Trade Partner’s success TEAM: Together Everyone Accomplishes More Cooperative team approach