| Contact Scott Sedam via e-mail at scott@truen.com
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When I was a kid, my family made the 500-mile trek from our home in southern Indiana to northern Michigan most every summer. This was a significant undertaking, with six of us in a too-small car under a borrowed wooden car-top carrier. This was mostly pre-interstate travel and pre-air conditioning to boot. Twelve hot, sweaty hours.
What could be worse? Plenty! While my baby sister got the prime spot up front between Mom and Dad, I was stuck in the back, between an older brother and sister, neither of whom saw any reason for me to occupy any space on the planet, let alone take up their personal space in a Rambler Classic.
Oh, I could make you cringe with tales of how I suffered under rites of sibling torture, but I have to confess: I loved it. Well, not the torture, but I loved the trip. I loved it because I was so fixated on what was to come that I shrugged off the abuse.
We were going "up north"! The rivers, trees, fish, beach. Lake Michigan. Lake Huron. Mackinac Island. And maybe, just maybe, this year Dad would take us to the "Mystery Spot"! It lay just across the Mackinac Bridge in St. Ignace, a beacon to the tourist, right on Route 23. The billboards promised its wonders for hundreds of miles.
"See things you can't explain!" "See balls roll uphill!" "See water flow out of a rock!" "A five-legged calf!"
I wanted this experience so badly that it hurt. I literally begged. But my father, while possessed of many fine qualities, had one that didn't bode well for a visit to the "Mystery Spot." He was tight with a buck.
Regretfully, the years passed without my getting to visit the "Mystery Spot." By the time I could both drive and afford the ticket on my own - around age 40 - video-reared, computer-bred sophistication had dulled tourists' senses to the point that such roadside attractions no longer held much attraction. One by one, most of these landmarks shut down. But shed no tears for me, because I have found my very own mystery spot. I call it "Home Building's Mystery Spot."
Aiding in my discovery of this spot was Michael Dickens, a longtime friend and the president of BuildIQ, the educational startup spawned from IBACOS. He was in town awhile back and stopped by the office. There is no finer mind in the industry with which to discuss the machinations of home building. Michael is interested in everything and wants to know everything. His question on this visit was simple yet provocative: "What do we do in this industry that you just don't understand?"
Ohmigod, where do we start? But before you read on, take a minute to jot down your own list. I'd be curious to know what you find perplexing in this business. E-mail it to me.
Michael and I covered a lot of ground that day, from builders' lack of attention to systems, to their unwillingness to invest in research and development, to their habit of opening projects before they are ready, etc., etc. The area where I settled in the most was one that is both easy to identify and even easier to cost-justify a fix, although few builders attempt one. There is also inarguable evidence that this issue has more to do with determining company performance in the not-too-long run than any other factor. It's more important than financing, land position and good systems. Put quite simply:
What I don't understand is why builders don't pay more attention to building a high-performance culture.
Many senior executives simply don't understand the critical importance of culture. Many others are in denial. They imagine they have it when the evidence clearly says they do not. Although there are fine examples of strong practices for developing people and culture scattered across the industry, only a small percentage of builders have put it all together into a comprehensive, strategic approach. To have that, we'd see the following:
Finally, employees at all levels would believe they are the most valued asset in the firm - more valuable than any piece of real estate in the hottest market - because they are. In the very best companies, suppliers and trades would feel this, too.
It's not nearly enough to say, "We value our people." Show me an annual report that doesn't say that. You say, "We train our people," or "Our salary and benefits are competitive," or "We are an equal-opportunity employer." Big deal. That’s like presenting a marketing strategy to sell homes based on the fact that you have "genuine electric wiring and real indoor plumbing." Very nice, but merely table stakes - the cost of getting in the game. Building a highly productive culture requires a dedicated strategy with planned, proactive implementation. Execution is everything.
People are used to my crusading for the creation and continual improvement of productive systems and processes in this industry. I haven't backed off that one bit. Yet to achieve peak performance, a strong culture must exist on both ends of the systems. It is a strong culture that demands that productive systems and processes be created. Then it is the strong culture that implements them, tends to their maintenance and ensures that they stay productive and relevant. I have witnessed plenty of companies with impressive systems and processes, yet absent the culture to make them effective. I rarely encounter a firm, however, with a great culture but no systems.
Why is this so hard for builders? Does it seem too warm and fuzzy? Talk to someone who was the victim of a defective culture. Nothing warm or fuzzy about it in their mind. More like getting hit with a load of jack studs. Do you think Enron’s collapse was the result of illegal financial practices? It was the management culture that bred them. Do you think Kmart’s demise was because of bad marketing decisions? It was the corporate culture of greed and situational ethics that nurtured them. Most business failures can be traced to the culture.
The good news is that successes can be found in the culture as well. I was intimately acquainted with three of last year's four National Housing Quality Award winners: History Maker Homes, Pulte Minnesota and Grayson Homes. What do they have in common that differentiates them from most builders? They do a host of things well, but the standout item that defines all three is that each has one of the strongest, most well-developed, highly productive company cultures I have encountered.
I still don't understand why more builders haven't caught on. To most, culture remains an obscure item on display back in a dark corner of "Home Building's Mystery Spot." And like my dad, they are too tight with a buck to stop and see it for themselves. I suggest you do, however ... and bring the whole family.
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