Business Management

NHQ 2009: K. Hovnanian’s Virginia division has cultivated trades who love them

Silver NHQ Winner K. Hovnanian Virginia has trades who are “raving fans.” The company demonstrates genuine desire to cultivate loyalty and true partnership with their subs.
Oct. 1, 2008
5 min read

Sidebars:
Keeping the M.A.G.I.C. alive
K. Hovnanian Virginia Testimonials
2009 NHQ Coverage Continued

Builders strive for raving fans — customers who can't stop singing the praises of a home builder that has gone the extra mile to make their home purchasing experience phenomenal. But you don't hear a lot about home builders making raving fans of their trades, the folks they hire to build homes that make their clients swoon.

K. Hovnanian's Virginia Division's ability to produce “raving trades” played a huge role in its being selected as an National Housing Quality Award Silver Award winner this year.

“They have the most amazing trade partner relationships I've seen in all my years of judging the NHQ awards,” says judge Dan Green, vice president of Newton Centre, Mass.-based The Green Company, a former NHQ Silver Winner. “The support, closeness and dedication of the relationship is unprecedented in my view. It would be beneficial for other builders to replicate this.”

In it together to win
During the NHQ site visit, trade representatives for K. Hovnanian Virginia told judges such things as, “I'd be more inclined to help them than the majority of other builders I work for,” “We work together with K. Hovnanian so that the homeowner doesn't have to incur the cost of the replacements,” and “I have given price concessions … because of the partnering I feel with them.”

Cultivated loyalty: Gary Chandler (left), Paul Huff and K. Hovnanian Virginia's management take care of their trades, and those subs are willing to go to the mat for them.
Photo: David Holloway/Getty Images.

Gary Chandler, president of the Virginia Division, says the company recognizes the tangible benefits of partnering with trades and of looking for ways to help each other. They have open discussions about how their subs can run a more efficient operation and build more quality into their product and processes.

“They are a highly motivated group,” says Chandler. “Our fate is tied, obviously. They really get the fact that without them sharpening their pencil as much as they can, we're not going to be able to sell houses, and that will limit the amount of business they have.”

To that end, the company encourages all of its key trade partners to become NHQ Certified.

“Working with trades who are [NHQ] certified allows us to talk the same language,” says Paul Huff, director of quality, Mid-Atlantic (Maryland and Virginia) for K. Hovnanian, in the division's written application. “Our discussions with trades are different now. They are no longer, “Do you have a quality system?” but “How can we better support your in-process inspections?”

Keeping the M.A.G.I.C. alive

Like many home builders, the Virginia Division of K. Hovnanian has had to let staff go.

But the company had a bit of M.A.G.I.C. up its sleeve to help guard against low morale. Make a Great Impression on the Customer, or M.A.G.I.C. training, is a K. Hovnanian corporate initiative that the division takes seriously. It has made associates aware of how all communication with customers — internal and external — makes a difference.

“It made everybody stop and think about how their actions affect other associates and our customers,” says Gary Chandler, division president.

A result is an ongoing program to encourage and reward “M.A.G.I.C.” behavior. Any employee that observes it in a coworker can nominate him or her. Recognitions are made weekly, and winning employees receive four-hours paid leave; a free lunch or breakfast; or a special parking space for a month. There are also quarterly and yearly winners who earn a $250 and $500 gift certificate respectively.

“There's an e-mail almost every day: 'Today we had Joe Smith who was nominated, and here's why,'” says Paul Huff, mid-Atlantic director of quailty. “Every other day you see this e-mail, and it really raises spirits and morale.”

K. Hovnanian Virginia has it right when it comes to:

What really matters “Even in the down time, even with less people, we really want to focus on getting back to the strategic plan and vision of the company, and that is to be the best. We are still going to focus on all our processes. We are still going to focus on our all procedures and policies. The goal isn't to be the biggest company or the most profitable, but the best that we can be.” — Gary Chandler, president, K. Hovnanian Virginia Division.

Peer relationships “There's a pretty small network of other builders around here. We'll get together with Centex, Beazer. We might want to go into a deal together. We might just want to get together for lunch and pry each other about the market. I sat down with one of the presidents from Centex and we talked about customer satisfaction.” — Gary Chandler, K. Hovnanian Virginia.

First-time quality
“Quality and satisfaction save money. You save a lot of money getting it right the first time. Make one trip [to the site], and you don't have to go back.” — Michael Marlovitz, vice president of finance, K. Hovnanian Virginia.

2009 NHQ Coverage Continued

  • "T.W. Lewis Earns Gold National Housing Quality Award for 2009" by Paul Deffenbaugh, Editorial Director
  • "K. Hovnanian – Northern California is all about Employee Satisfaction" by Sara Zailskas, Assistant Managing Editor

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