Last month, I attended NAHB’s midyear meeting in Miami and had the pleasure of sitting in on a presentation by Daniel Swift, president and CEO of Des Moines-based architecture group BSB Design.
2010 NHQ Awards: Simonini Builders' Unified Front
2010 National Housing Quality Awards Gold winner Simonini Builders shows what solid communication and company culture can do for a home builder in a downturn.
|A golden win. Simonini Builders leadership lead the company to NHQ gold. Pictured left to right: President
and CFO Bill Saint; Co-Owner and Chief Creative Officer
Alan Simonini; and Co-Owner and CEO Ray Killian Jr.
When times are tough — and no one has been immune to our economy's downfall — it's easy to forgo routines and strategy critical to business success. But the Gold Award winner of the 2010 National Housing Quality Awards, Simonini Builders, maintained its business rhythm and devotion to employees as the challenges mounted.
Simonini Builders excelled in nearly all eight NHQ categories. The company's solid communication among managers and employees coupled with business transparency demonstrate a standard of home-building excellence the industry should note.
Simonini's leadership team operates transparently; everything from finances to sales is discussed openly. They've established a meeting rhythm of daily, weekly and monthly meetings to update each other while addressing priorities and how they align with goals. It is the daily huddles, though, that allow the company to achieve progress on its goals. The meeting strategy allows them to react quickly to changing business conditions, says President and CFO Bill Saint.
"It's much better to have multiple heads looking for solutions and to get fresh ideas," says Saint. "Through open communication in strategic channels, we're able to keep everyone informed much more fluently and react."
Simonini Builders is a semi-custom, custom and neighborhood builder with a renovations division. You can find Simonini Builders' long-term strategic plan in a thick, three-ring binder that's revised every year. But you don't have to crack it open to know the vision or the company's short-term goals. Co-owners Alan Simonini and Ray Killian Jr. and Saint want it that way. Meetings help with communication, but executing that strategy mainly takes place through a personal goal-setting system adapted from Verne Harnish's book "Mastering the Rockefeller Habits."
Each quarter, the trio picks 4-5 goals called "Rocks" tied to Simonini Builders' success and becomes individually responsible for them. That list of goals is shared with all employees, and everyone right on down to the secretary establishes personal Rocks that directly contribute to those of the company's leadership. The result is an uber-focused support system tailored to priorities. You can have an employee who might want to redesign a spreadsheet, for example, but if the task saves time but doesn't contribute to what needs to be done now, it can't be a Rock.
"When you have a group of individuals that is self-motivated, self-managed and entrepreneurial, as our employees are, it's critically important to focus and communicate the strategic plan," Killian says. "That way we all have a direction and we're focused on moving forward."
And every decision ties back to Rocks.
"It's all about focusing people in on solutions," Killian says. "We've found that when we have a group of people listening to a challenge, you're not alone in those challenges. And it's an opportunity to communicate top-down what's going on in the company.
"We have thousands of things to do," Killian adds, "but if you don't isolate your priorities, then you don't get anything accomplished."
Of course, underneath all Rocks is the goal to be financially successful. Rather than assume employees understand the numbers, the company trains them, starting with the book "The Great Game of Business" by Jack Stack. One employee spoke to the judges about the pride in knowing how to read a financial report.
Says Saint: "Financial literacy makes communication much easier if everyone is up to speed and on the same page."
Talk to Ray Killian Jr. about his company's successes and he'll inevitably credit his employees.
"When Alan and I went into business together," says Killian, "we knew the only way to succeed would be to hire the brightest and most creative people and give them an environment to excel in."
|A regular meeting rhythm focuses the team on strategic goals, which keeps company priorities straight, says Ceo and Co-owner Ray Killian Jr.|
But his enthusiasm goes beyond an appreciation for their hard work. He earnestly describes the Simonini hiring process that has allowed them to hand-pick their staff. A formulated system helps them evaluate, underwrite and hire candidates whose interests, skills and desires align with the job position and company culture.
The process is serious business: it usually spans 4-5 hours, and there's a component that tests spatial skills because, the three explain, if you can't grasp basic home-building concepts such as floor plans, you're not going to do well.
The company culture for success extends to its trade contractors as well. Many are second- or third-generation partners, and the trades the NHQ judges spoke to talked of pride in wearing Simonini shirts because of the company's regional reputation and standards. It's a high standard to meet, but one with payoffs. One trade partner said, "If I have a new guy, I'll put him on a Simonini job. If he can't handle it, then I know he won't work out."
About a year ago, Simonini Builders established a trade council, and as the trades get settle into their own rhythm, they testify it's already helped everyone's bottom line.
You wouldn't walk into the Ritz-Carlton and not find soap at the sink or garbage bags in the bins, so why wouldn't you in a Simonini Home that just became yours?
Alan Simonini is obsessed with details. His employees will tell you that as he walks through his homes (each Simonini home has Alan's approval) he checks all screws in the wall plates (Are the grooves pointed up?) and touches the walls to check the paint (Is it as smooth as paper?). He watches to make sure each shutter closes properly because everything must function. Simonini homes, he says, should be nothing less in quality than you'd expect from Mercedes-Benz, Montblanc or any other luxury brand.
"I hate to see things not 100 percent," Simonini says. "Home builders have to have the last product in America that is not being delivered defect-free. No warranty (callbacks) is the goal of every (Simonini) home."
The key here isn't just the obsession with quality but also understanding buyers. Simonini clients represent the top 4 percent of the market — business owners, doctors, lawyers, Nascar professionals and the like. They're used to luxury.
The company also discovered its buyers are willing to give up a million-dollar home for a $600,000 home, and they're wanting it to be smaller, too. Data and observations pushed the builder to redesign floor-plans and begin offering product starting in the upper $400,000s (Simonini's average home is around $1 million).
Whether the home is $500,000 or over $3 million, the home-buying process and construction quality is the same. The same transparency and communication takes place with clients, who seem to be responding well: 29 percent of buyers were referred by an owner of a Simonini home, and Simonini's independent customer satisfaction score for NHQ comes in at 96 percent.
The Simonini team are students of other industries, beginning with Alan. He's embraced the Ritz-Carlton approach, even handing out wallet cards with the Simonini mission, vision and values to employees. It's an approach Killian and Saint match to stay on top of the industry.
"I think it's about having an open mind and constantly wanting to learn," says Saint. "It's listening to a lot of people and having a world view, then connecting the dots to the market, and then to the [industry] and then to the company."
2010 NHQ Awards: Wayne Homes' Happy Employees Keep Happy Clients
: Simonini Builders
Founded 1973; Alan Simoni and Ray Killian took ownership in 1994. Semi-custom, custom and neighborhood builder
2008 closings: 56
2009 closing goal: 40
Watch video interviews with Alan Simonini, Ray Killian Jr. and Bill Saint about the philosophy behind Simonini's processes, and then listen to judges' impressions.
Take our online NHQ assessment tool at www.HousingZone.com/nhq.