There is a veritable geyser of data tracking housing today. From existing-home sales, to house prices, to new-home permits, to starts—housing metrics abound.
Builders Take Note: Make Time for Process Mapping!
Senior editor Bill Lurz says that a lack of focus on total quality management could be a fatal flaw.
I had a conversation recently with housing industry management consultant Fletcher Groves, who sees the current housing downturn having a devastating impact on the total quality management movement, which gained a toehold in the housing industry in the early 1990s, fueled — at least in part — by the National Housing Quality award program sponsored by Professional Builder magazine and the NAHB Research Center.
Groves, principal of Vedra Beach, Fla.-based SAI Consulting, has been working with builders for more than a decade to get their process flow charts down on paper and then refine them to improve efficiency. Just recently, Fletch surveyed all his past clients, to learn (1) how many of them still had the process maps, (2) how many were still amending the maps, and (3) how many were still working on their processes to realize the small, incremental improvements that are at the core of TQM. Groves sent me the 11-page report on his findings, which are disappointing, but not surprising.
"What we found is that 64 percent of our past clients said the documented processes were of value, and 54 percent said the processes had been maintained," Groves reports. "However, we found that the majority of the process models were no longer being maintained in the process flow-charting/modeling applications in which they were initially documented. And only about 36 percent said they were still using the process models and flowcharts."
Some 55 percent of SAI's clients said, given another opportunity, they would not have changed anything about the way the project was structured and run. But of the 45 percent who said they would change something, more than half now say they should not have done process-mapping at all. It's a discouraging picture for Fletch — and for anyone concerned about the level of management professionalism in this industry.
However, as I mentioned to Fletch on the phone, we should not be surprised. The housing industry has been devastated by the crash that is still deepening. In many of those client companies, I'm sure many of the managers who were involved in the process mapping are not even employed in the company anymore. Many home builders are in survival mode today, and process maps created by a past management team are probably stuffed in a closet somewhere, if not shredded. Realistically, that's just the way it is.
Fletcher Groves' response to that statement: "This is an industry of deal-making entrepreneurs who have a tendency to move from one management theory to the next, always searching for the magic bullet that will make running a housing company easy. TQM is not about making things easy. It's working in the manufacturing sector because they work at mastering their processes every day, for years. People come and go, but the processes stay. Builders don't have that kind of patience," he said.
It's tough to have patience when a cycle like this one turns everything upside down. Houses are not manufactured in a plant. Maybe, to some degree at least, they should be.
Read Bill's blog, Ear to the Ground, to hear what he has to say about bullish reactions to the downturn and the effect oil prices have had on building materials.