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.
Home Building's Purple Cow
How have we reached this state of affairs in which the vast majority of builders believe they stand out from the crowd far and above what the facts support?
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I go through a little routine in some of my presentations, assured to provoke the audience and maybe even aggravate it. Aggravated audiences can be fun. I ask a simple question. "Regardless of price range, how many of you build great houses - the best, something truly exceptional? Raise your hands." Those of you reading along at home or in the office, ask yourself this question now. I know that mentally your hands are up because 99% of my presentation participants raise their hands in response to the question. While it's good to believe in your product, and it's encouraging to see how great you all have become, we have to ask, "What's wrong with this picture?"
Let's get real for a moment. Will you agree that everyone can't build the best? That's not a radical statement. That's simple math. We can debate what percentage of builders we might classify as building the best, but let's be generous and say 5%. This allows for hedging because of the problem of comparing an entry-level townhome builder with a builder of luxury single-family homes. Still, this presents a problem with 95% - 19 out of 20 - of the builders who still claim to build the best but do not. That means most of you, I'm afraid, although I'd like to think the readers of PB and this column might beat the averages at least somewhat. Remember, this isn't my opinion; these are statistical facts. We can't just play "make believe" and rewrite the laws of mathematics.
How have we reached this state of affairs in which the vast majority of builders believe they stand out from the crowd far and above what the facts support? I can think of three possibilities:
- You are dishonest.
- You know you don't build the best, you've seen the evidence, but you declare you are on top anyway.
- You won't let the facts stand in the way of a good PR campaign or an ad in the Sunday paper.
- You are presumptuous.
- You make a big assumption about your superiority without empirical evidence or data of any kind.
- You really have no clue, but that doesn't stop you from saying you do.You are delusional.
- You truly believe you build the best when the facts and numbers show otherwise.
- You aren't really lying; you just don't get it.
- You chose to ignore what doesn't fit your personal paradigm about your company.
Great choices, eh? What'll it be? Dishonest, presumptuous or delusional? I'd love to conduct an Internet poll and publish the results in next month's column, but I don't think I'd get many responses. But wouldn't that make a great International Builders' Show workshop? "Dishonest, Presumptuous or Delusional? - Builders Rate Themselves."
OK, I had fun with that, but now I'll tell you what I think is the real reason. For the past 10 years, business has been just too good and too easy. Tremendous demand, insanely low mortgage rates, plenty of willing investors, few material shortages and sufficient labor. The past year was the eighth consecutive year the experts have insisted the slowdown would begin, and it looks like another record breaker. How could you not sell houses? But as a result, there is a lot of complacency. Everyone keeps telling himself, "You're the best! You're the king!" (All right, I stole that line - and a free, genuine TrueNorth coffee mug for the first e-mail I receive with the source. Hint: It's one of Dean Horowitz's favorite movies, soon to be remade.) But 95% of you aren't building the best. And the result is that few builders in this industry are pushing the envelope. Read the Sunday ads, do some competitive shopping, fly to a city far away and look at what's built there. What do you find? Considering the size and vitality of the industry, very little that is new, different, exciting - almost nothing that a fair judge would call "truly remarkable."
In Jim Collins' most recent book, Good to Great, he cites as an absolute key attribute of the best companies the ability to "confront the brutal facts." They look reality straight in the face, accept it, deal with it and then commit to a plan to change and grow to a new level.
I suggest you look at both what you are building and how you are operating and challenge yourself. Are you really doing anything exceptional? And here's the catch: Whereas it used to be truly exceptional to build a fantastic, near-zero-defect home and provide great customer service, these are no longer major factors in differentiation. We aren't yet to the level of the auto industry, for example, where compared with what we were buying 20 years ago, it's becoming hard to buy a bad car (although service still could improve.) But high quality and customer service are now "table stakes" in home building. It's getting to be like indoor plumbing. You need it just to be in the game.
Many of you won't believe this is a big deal. You say, "Hey, we're building a good product, taking care of customers, selling plenty of homes and making money. Those are my brutal facts, and I like them just fine!"
To shake you up on that notion a bit, I refer you to Seth Godin of Fast Company magazine fame and his latest book, Purple Cow: Transform Your Business by Being Remarkable. It's a simple, straightforward message that clearly articulates something hard to do. It's a primer on how to become a truly remarkable organization, which means creating truly remarkable products and services. You might think you are remarkable now, but read this book, and you likely will change your mind.
If you are too skeptical to drop 10 bucks on this surprisingly short and readable book, follow this Web link to a free overview that you can print to your heart's content: www.fastcompany.com/online/67/purplecow.html. Then distribute it to all of your employees, not just the senior staff. Challenge them to read it and answer two questions. First, are we being remarkable, and if so, in what way? Tell them they have to support their contention with evidence. Then ask them how your company might become remarkable. Tell them to get specific. Take a chance. Push the boundaries. Call a Purple Cow Conference - or at least a Purple Calf Meeting. Really push yourselves.
After that, send the article to your key suppliers and trades, and maybe even some customers you know. Ask them the same basic questions. Are you remarkable? And how could you be?
Is this so important? According to Godin, this is not just a cute concept - this is survival. Should we believe it? I spend most of my waking hours traveling the country and working with builders of all types and sizes. In the process, I check out things everywhere I go. When I arrive in a city, I often go product shopping, just to get a feel for the market and what's going on. And most of what I see isn't remarkable. In fact, it's pretty boring. Competent - but boring.
Now here is something really bizarre. At the very moment I completed that last sentence, my 22-year-old son, Conor, stopped by the office to say hi. His first words were, "Hey, don't you know some people over at XYZ Homes? I just drove by their new development off Buckley Road, and tell them they need to get some new product already. They've been building the same boring stuff for 10 years."
I'm not making this up! Should they care what Conor thinks? He just graduated from a top-rated business school famous for its student-led marketing projects, funded every year by private and public companies looking for help from "bright, untainted young minds." What do you think?
I'll let Godin take it from here. But ever since I finished his new book, I have found myself asking the same questions about TrueNorth, my company. What is our purple cow? Does anything make us remarkable? And how will we become remarkable two, three or five years down the road? These questions are changing the way we think about our organization. If you read the book, I bet they'll have the same effect on you.
But you could just keep on doing what you're doing. You can keep telling yourself you are the best.
After all, as Dr. W. Edwards Deming was fond of saying, "Change is not necessary. Survival is not mandatory."