Could some of the most in-demand housing markets be cooling off?
Do Recruit Talent Every Day
When is a home builder like a college football coach?
When is a home builder like a college football coach? Today, and every day for the foreseeable future, because both must do one thing very well to be successful -- recruit, recruit, recruit.
Like a college football coach, there are many other things a builder must do to succeed, but if you don't have good people, you're swimming against a stream that will eventually engulf you. Coaching legend Woody Hayes wrote a book on the subject: You Win With People. Perhaps it should have carried a subtitle: Without the right people in the right positions, you lose.
Most builders are well aware of the shortages of skilled workers in the construction trades. All they have to do is look at how long it takes them to build a house today, compared to a year ago. What may not be quite so obvious is that skilled trades are just the tip of the iceberg. Management talent, especially at the entry (construction superintendent) level, is also razor thin. To thrive in such an economy, all business owners, not just builders, have to recruit talent every day.
In his column last month, people management guru Martin Freedland wrote about the many steps established firms can take to ward off "snipers" trying to recruit their best people. He also advised that every member of the management team should constantly network and make lists of potential candidates to recruit into his/her department. Certainly good advice. But what about the new start-up firm we profile in this series?
A new builder has to recruit the people needed for a fledgling company before ever pulling the trigger on his/her start-up. But if the plan is, as we project, to grow this new firm rapidly toward a market-leading position, this new builder must be the ultimate sniper -- recruiting good people from existing competitors, while at the same time protecting his first hires from retaliatory sniping. At the same time, the owner must deal with an economy that does not appreciate home building as an industry of expansive opportunity.
"We're in a full-employment economy," says Michigan-based management consultant Michael Anleitner, who works in both the home building and auto industries.
"Rising interest rates may slow home building in the second half of this year, and that could create a false sense of relief, that shortages of labor and management talent will not be as acute. But don't fool yourself. The underlying demographics have not changed."
The plain fact is that the demographic group this industry depends on most -- young males aged 25 to 34 -- is dropping like a rock, and will continue in decline until at least 2005. Think about the work young men under 35 perform in this industry and it clearly includes construction supers (entry-level managers) as well as skilled trades.
Where does all this lead? To me, it seems the football-coaching model still holds some valuable insights. When young coaches move into new jobs, with ambitions to garner a New Year's Day bowl bid, one of the first moves they make is to broaden the sweep of the old coach's recruiting net -- trying to draw from a larger talent pool.
For the young, but experienced, start-up builder we profile here, that would probably mean spending more time searching for talent in other industries. Texas builder David Weekley, who grew his firm from a Houston small fry to a national Giant over the last 20 years, followed that course -- pulling management talent from other industries, but especially retailing. Weekley also believes project manager organization plays a role in recruiting future managers.
"Project management organization, where the local manager has full P&L responsibility -- and manages both sales and construction people -- is important, because we are trying to grow future leaders. Moving young managers from smaller to progressively larger profit centers is the best way to bring them along," says Weekley. "But we never recruit directly into the project manager position. We always put a person into either sales or construction, or both, first. We also test them thoroughly to identify management potential."
Football coaches would blanch at the idea, but I'd suggest another expansion of the recruiting net: women. As some builders already have discovered, women make marvelous construction superintendents. Since that position has always been the entry point for management training in home building, doesn't it follow that women might be a rich, untapped vein of managers?
Weekley often searches retail for potential management talent. It's fertile ground since pay scales for retail managers traditionally are lower than in home building. Retailing also abounds with women in management positions.