Community Development

We live in a time of massive divisiveness. Red State, Blue State. Liberal, Conservative. Just turn to this month's letters pages to see how readers have responded to our articles in August about illegal immigration for an immediate example.

In the home building industry, there is a common ground that is basic to the operation of our businesses. Regardless of our political stripes, we should all be able to agree that the goal of any home building company is to be an essential part of the community.

At first blush that might sound as if I believe owners should plow their well-earned profits back into the community in the form of charity, good works or even — heaven forbid — taxes. I'm not. In fact, I think too much direct community involvement may be detrimental to a business. I've seen plenty of companies with soaring charitable profiles who have crashed and burned because the management team took its eye off the important business of running the company.

What I mean is simple: Businesses are essential parts of communities. They have a role as valued and important as schools and churches. Find a neighborhood with strong schools, active churches and vibrant businesses and you will find a community that is thriving.

Because housing is one of three basic needs in life (food and clothing are the other two), home building and remodeling businesses are especially important to the commonwealth.

What does it take for a business to be an essential part of the community? Here's my list:

Hire talented people. Nobody in business can succeed with deadbeats and knuckleheads running the operation. The most talented bring the most return.

Turn a profit. Profit is a measurement of the risk a business owner takes. Not earning a profit endangers your company, which, in turn puts your employees, their families, your suppliers and the community at greater risk.

Share in the profits. You want your talented people focused on what's most important. To achieve that, they have to get a piece of the pie. Building a great company can benefit everyone, not just one owner.

Be driven by customer demand. Home building companies are generally good at a few aspects. They do the market research, they react to changes and they deliver product at appropriate price points. Recently, the increased focus on customer satisfaction has forced them to identify other, less tangible customer demands. Builders who understand all the aspects of customer satisfaction will excel compared to others who only focus on the product.

Be driven by quality. Few businesses are as focused on quality as they should be. Fewer still have processes in place to deliver it consistently. Check out Estes Builders (page 56) to see how one company has made delivering quality a passion.

Be growth-oriented. If you are not growing, you're dying. Growth brings purpose and strategic intent. Without it, companies become filled with malaise and find it harder to attract talented people and dedicated suppliers.

Be ethical. The breakdown in ethics for home builders seldom comes at the ownership level. They fail to communicate a clear vision of the company's value that all employees know, understand and embrace.

Take a moment and match your list against mine. Drop me a note and let me know what you would change and why. Or, better yet, come to our Benchmark Conference Sept. 26-29 and tell me in person.

Paul Deffenbaugh, Editorial Director, 630.288.8190, paul.deffenbaugh@reedbusiness.com