A NeuWay at Neumann Homes

There are no small visions at Neumann Homes, a two-time winner of the National Housing Quality Award. This 2003 Silver Award recipient's 2020 envisioned future states, "We will transform the company into the undisputed number one home builder in the world." Supporting this big, hairy, audacious goal are key strategic drivers essential for long-term achievement of this vision. Each is an area in which the judging panel thought the Warrenville, Ill.-based builder demonstrated a best practice from which others can learn:

• growth that aligns with vision
• operational excellence
• world-class team members
• customer satisfaction

Supporting these key strategic drivers are a series of strategic opportunities each with a dedicated, cross-functional Driven to Excellence Team responsible for moving Neumann Homes up the mountain to reach its 2020 goal.

This layering of people in support of activities, ideas and innovations is deliberate and essential, says CEO Ken Neumann. "Getting to where we want to go as a company is bigger than any one person," he explains. "I have learned that our greatest challenge and our key strategic competency is and must be leadership. We have the vision; now our opportunity is growing the leaders to fulfill it."

Growth to the Vision
Growing leaders schooled in the "NeuWay" a total business philosophy and not just a marketing promotion necessarily must come before geographic expansion. This singular understanding of what Neumann Homes stands for, how it does business and what home buyers can expect is the engine that Neumann's leadership team believes will drive controlled, profitable growth and help the company achieve its vision.

One of the first to carry the NeuWay beyond the company's established Illinois/Wisconsin trading area is Christopher Zell, division manager of Neumann Homes Denver. At the Village at Harmony Park in suburban Westminster, Colo., Neumann is building 313 homes in three distinct neighborhoods in a community that includes recreational features and offers convenient access to schools and a major interstate.

Denver is just one of many short-term, measurable milestones on Neumann's 20-year quest to transform the company. Current activities include:

• significantly improving the organization's land acquisition and entitlement capabilities.
• forming a complete, targeted, strategic five-year land acquisition strategy by geographic subregion.
• continuing to expand its trade base and enhance trade relations to support the company's growth.
• significantly expanding its relationship base in the land acquisition and entitlement area.
• fully staffing with A players the leadership of all seven divisions this year.
• expanding product lines to meet growth needs.

"To hit 2020, we know where we need to be in 2005, 2008, 2012," says Ken Neumann. "It is what we work toward every day."

To keep a growing group of team members the current count is upward of 300 aligned with the vision and informed on the day-to-day and beyond, Neumann hosts a growing series of events. The company's senior leadership team leads each event, including:

• monthly town hall meetings where Ken Neumann answers question posed by any team member.
• quarterly all-team meetings centered on living the company's vision and values.
• receptions to honor recently promoted team members.
• regular social events, including a summer picnic and holiday party.

There is also Neumann's annual "Pride in Our Past Year" celebration. This event took on special significance this year because the company finished 2001 with its highest levels of customer satisfaction, team member satisfaction as judged by the Campbell Organizational Survey, customer referrals, and growth of sales and closings. In the same year, Neumann achieved its lowest levels in employee turnover and production times. These highs and lows added up to a major company celebration with every team member and his or her significant other going on a company trip to Disney World in May of this year.

Operational Excellence
With vision and growth must be a backbone a business operating system that keeps track of the myriad bits of information that come with closing more than 1,000 homes in 20 communities.

In 1998, the last year Neumann Homes won an NHQ Award, the backbone of the company's computer setup was a wide-area network, a series of local-area networks and T-1 data transmission lines that network every employee. While those basic systems are still in place, the company has moved from a Visual Basic to a browser-based technology platform, rewritten its software twice and completely integrated everything so that all information resides in one database.

"There are 100,000 pieces of information in building a home," says Neumann. "We keep asking ourselves which of these can we automate so that people don't have to rehandle information and make mistakes."

An integrated information management system helps Neumann track and monitor other performance measures and goals, including:

• maintaining 90-day production cycle time or less in all divisions.
• increasing option and upgrade sales in Neumann's design center an average of $3,000 per house.
• increasing the entire team's focus on profitability.
• using extensive benchmarking to help team members achieve higher performance.
• starting a distribution center in the Chicago region to supply lumber, wall panels, trusses and eventually pre-manufactured foundations.
• the number and nature of items on home orientation walks.

To help reach its goal of delivering zero-defect homes, production crews have instituted a trade punch day when each trade partner does whatever it takes to reach the zero goal on its own. "Each trade corrects any concerns on their own without a generated list from us," says executive vice president Kris Zwycewicz. "This teaches them to build the home right the first time and to self-inspect each aspect of their work."

Closing the Loop
The most ambitious vision, the best operating system and rigorous performance measures add up to nothing unless a common set of expectations exists to bring them to life. At Neumann Homes, the company's core values integrity, public responsibility, a drive to excellence, customer focus and teamwork foster an environment that promotes the satisfaction of its customers, the support and growth of its team members, and the success of the NeuWay.