The year 2016 was an eventful one for home building.
T here are times when thinking about the future can lead to great things. For homebuilders, this is one of those times.
|By Edward Caldeira, Director of Quality Services, NAHB Research Center
There are times when thinking about the future can lead to great things. For homebuilders, this is one of those times. Web-based buying consortiums, even flow production, mergers, internet home auctions, national builders sharing computer services: you don’t have to look far to see changes to the traditional home building business model.
These changes affect how your organization must perform to remain competitive in the future. What will your future be and what do you need to do to get there? Answer these questions by leading your senior management team to create a future vision for your company. Here are some suggestions for getting started.
It is essential that your team recognize that industry changes are destined to transform today’s builders into entirely new companies. While you may be unable to control change, you can evaluate how it affects your business. Brainstorm business and marketplace developments and their potential to threaten the company’s continued success. Examine possible breakthrough developments that could lead to extraordinary success, particularly if other builders are slow to react.
Prepare a series of contingency plans for a range of potential trends and breakthrough changes. Be prepared by planning at least three scenarios:
Sustained Evolution: assumes present trends will continue on their current trajectory or cycle.
Back to the Past: upset in the business environment that changes the current business model.
Breakthrough Change: one or more developments take place that dramatically improves marketplace opportunities, operating efficiency, costs, or the homebuilder business model.
Do not wait until a threat or a breakthrough event occurs or a trend matures before you start planning your future vision. There will not be enough time to think through the proper course of action; it will be too late.
Nobody knows exactly what the new homebuilding business model will be or when the inflection points will occur. Success depends on your company’s flexibility to respond to whatever scenario occurs. Stay abreast of industry developments so you can recognize when it is time to act. Be prepared to act, not only by having a plan, but also the capabilities to carry it out. This often means having people on staff with the knowledge and skills that can lead your transformation when the time is right.
For a free copy of the Research Center’s "Future Visions White Paper" with thought-provoking excerpts from leading business thinkers, email TooBase@nahbrc.org or call the ToolBase Hotline at 800/898-2842.