Barratt American: Change of Attitude

It should tell you a lot about Barratt American that it builds in two of the toughest markets in the country — San Diego and the Inland Empire — but has not had to lay off a single employee. That can only be accomplished through a combination of tight cost control and empathy. It also reveals a lot about the kind of company Barratt American is.

Starting at the top with CEO and Principal Michael D. "Mick" Pattinson there is an attitude that suffuses the mentality of every employee at Barratt American. It is a sense of ability to accomplish tasks in an environment with strong support for both company and individual goals.

Such a transcending attitude did not arrive overnight. It was part of a defined quality improvement process. It is this devotion to both excellence and the pursuit of excellence that has garnered the Carlsbad, Calif.-based company the National Housing Quality Silver Award. The achievement recognizes the entire corporation, not just an individual division, which in itself is a significant accomplishment.

As many home builders know, getting multiple divisions to work together on the same page can be a tiresome task. Barratt American's clear goals and its encouragement, development and recognition of quality employees has allowed it to create a company culture that extends beyond the corporate halls to each of the divisions.

Begun as a division of one of the largest home building companies in England, Barratt American formed in 1980. In 2004, it underwent a management buyout and is now completely controlled by the American management group. The company operates three divisions: San Diego, Inland Empire and an Urban Division.

Human Resources

Lots of business people point to their employees and say, "They're the reason for our success." At Barratt American, it is more than just lip service. In fact, the NHQ judges recognized Barratt American's human resources processes as among the finest in the country. In particular, they identified a strong devotion to career development that includes regular workshops, classes and seminars.

During meetings with employees, the judges heard one story after another of employees who had been trying to work at Barratt for years, and once finally in the door, threw themselves into their jobs, taking advantage of opportunities for personal and career development.

The cultural goals, which are written and distributed to all employees, reflect many of the attributes that attract such highly motivated people.

• "We operate as an entrepreneurial organization"
• "We treat everyone with respect"
• "We act with integrity"
• "We will always be a benefit to our community"

It is no wonder why such an environment would foster people willing to make hard decisions to protect the health of the company. And that is why no one has been laid off. Quality and Maintenance Manager Jim Moss says the company has pushed employees to find ways to cut and control costs and advocated new ideas for improving efficiencies. There has been attrition, of course, with those positions not replaced, but there have been no reductions in force, which very few home builders nationally — and even fewer in the tough Southern California market — have been able to achieve.

One example of a reward that provides clear benefit to the company was the establishment of the President's Club in 2004. This is an incentive program that rewards employees who exceed customer satisfaction expectations. In 2005, members of the President's Club received a trip to Las Vegas, and in 2006, employees received a trip to Maui. Such a result not only rewards superior service and continuous improvement, it provides clear goals for the organization.

Leadership

What is remarkable about such an employee-focused company is how strong and present the senior leadership is in day-to-day operations.

Pattinson and the other officers are actively involved in both the company and the builder community. Pattinson has served as president of the California Building Industry Association and took a very personal and lead role in the fight to pass Senate Bill 800, which provided a way for homeowners and builders to resolve construction disputes.

That kind of leadership has brought the devotion of trade contractors, who often were the group most readily punished by out-of-control construction defect litigation.

Even more than those high-profile roles, though, the board of directors at Barratt American has done a surpassing job of establishing clear goals for continuous improvement and providing the means and methods to measuring the progress. The goal, of course, is to deliver the highest quality home to a satisfied customer.

Construction quality does not just happen, even among companies with great employees. Every job has a completion checklist managed by the site managers. Handoffs from trade to trade are done formally. Job sites at Barratt American are clean and uncluttered where materials move in and out smoothly and on time.

One method Barratt employs that ensures quality construction is to use third-party inspectors in addition to municipally required inspections. The added benefit of such a best practice is there is less litigation caused by lower quality construction.

All of this works because the employees have access to clear communication systems, defined processes, and established metrics. All of that placed in a structure of succinct goals. In a quality-based company, such as Barratt American, the business benefits from greater profitability, consistent performance and improved employee retention.