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.
Between Can't And Won't
I can't claim authorship of the headline on this page. That right belongs to Monte Hewett, president of the Atlanta-based home building company that bears his name. In describing his company, and its success in the highly competitive Atlanta market, Hewett offered this comment: "We fit into the niche between the big builders who won't do that, and the small builders who can't.
I can't claim authorship of the headline on this page. That right belongs to Monte Hewett, president of the Atlanta-based home building company that bears his name. In describing his company, and its success in the highly competitive Atlanta market, Hewett offered this comment:
"We fit into the niche between the big builders who won't do that, and the small builders who can't."
At Monte Hewett Homes, "that" translates into designing site-specific homes that enhance infill locations near interstates, malls and office buildings. "That" also means delivering value on the interior — lifestyle features, finishes and the way the floor plan works — usually in less square footage than similarly priced homes further out.
Defining its niche and adhering strictly to its strategy helped Hewett hit 178 closings in 2004 for $80 million in revenue.
So what's the big deal, you wonder? What makes this builder different from the hundreds of thousands of others across the country doing exactly the same thing? A lot of things, starting with the company's steadfast focus on delivering customer-defined value and doing so in a way that doesn't break the building budget. Neat innovations — the keeping room with a fireplace off the kitchen at the Wyndham model — can morph into real buyer wow factors with the right eye reviewing the space. Above the kitchen keeping room on the second floor is the master suite. The same space becomes a sitting area with a fireplace for not a lot of extra dollars because of the shared flue. Says sales agent Nancy Aroneck, "That combination is where this house really delivers value."
This defines Seth Godin's idea of a "purple cow" strategy — building the innovation into your product rather than investing a lot of money to market something someone else already is selling. It is best definition of a niche, and the most sustainable one as well.
How did Monte Hewett Homes get to this place where design starts with the consumer, marries the site and meshes with construction math to create value? A better question is why don't more builders strive for the same thing? The answer may be in the headline: They won't or they can't. Read the profile of Hewett's Oak Hills project in Smyrna, Ga., and I think you will arrive at the same answer I did.
A lot of builders won't start "over" on every project. They won't approach each new plot of ground with an eye toward creating the perfect product for the place. They avoid the task of constantly reassessing the spec level and the performance of each building product. They won't risk leading the market with a material or product buyers aren't asking for — yet — and other builders aren't using.
Others in the industry simply can't get to a place to conceive a purple cow. They can't access the information it takes to deliver what Monte Hewett Homes provides buyers at a price point that keeps the company profitable. They can't identify their own numbers — the cost of each item — and then apply the ingenuity to translate that amount into buyer value. They can't create lines of communication among sales, construction and purchasing to recognize where product voids exist in the marketplace and how to capitalize on them.
Can't and won't are two words that a builder like Monte Hewett leaves out of his business vocabulary when evaluating opportunities, but not in the day to day management of his business. Example:
- He won't develop land; instead he's forged relationships with a network of smaller developers that bring his company attractive lot deals with good profit potential.
- He won't build in master-planned communities where the company would have to compete with big national builders. Instead, he looks for infill locations where value is inherent to the place and can be compounded when mixed with the right product.
- He won't compromise on behind-the-walls building technology even though buyers care most about what they can see and touch. Instead, Hewett builds to the rigorous EarthCraft House green building standard.
- He won't compromise on the price/value equation for every product, material and finish selection in the home. Instead, says director of operations Aaron Sibly, "It all has to fit together and ideally, we'd like everything in there to contribute more in perceived value than it actually costs us to build."
Oh, and Monte Hewett can't imagine building homes or running his business any other way.