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.
The CEO of Bielinski Homes steers into an era of rapid growth and reduced cycle times for greater efficiency.
Larry Gruber, CEO of Bielinski Homes, steers into an era of rapid growth and reduced cycle times for greater efficiency.
PB: Just a year after joining Bielinski Homes, you were promoted to chief operations officer and now CEO. Bob Brownell moved over to become a co-chairman with founders Harry and Frank Bielinski, and you announced a strategic shift from land acquisition to construction. Why is now the time for all these changes?
LG: Bob's forte is land acquisition and development, and my background has primarily been in production home building with national builders. To paraphrase Bob, he's pretty much accomplished all he set out to do on a day-to-day basis. He stepped into the CEO role in 2001 and helped get the company through a massive re-organization, and he helped complete a program that was a big focus over the last six years, to position the company with land. Today we control over 11,000 acres of land. But there has to be a balance. We expect to close 650 homes this year, and we want to do about 1,000 in 2005, so we are shifting the emphasis back over to the home building process.
1,000? That's more than double your volume in 2003... What kinds of changes are entailed?
With the volumes this company was getting into, the old processes would not work anymore. Trying to get another couple hundred homes through the system was like trying to shove a bowling ball through a funnel. Basically, we had to refocus on all of our processes from point of contract through closing and move-in. In just a year's time, we've already cut about three months of cycle time from contract to closing.
Can you provide an example of a process or milestone that didn't exist beforehand?
We had very limited customer contact in the past. The company had grown; we weren't calling the customers enough, and we were keeping them out of the loop. So we initiated pre-construction meetings, pre-drywall meetings... through orientations at the tail end - something that is typical across the country. And Monday meetings out in the field. Now our salespeople and our construction staff call the customer every week and let them know where their house is schedulewise and if there are any problems, and how they are being addressed. This brought customers back into the process; it's one of the biggest things we've done.
Did you have to staff-up or create new departments to get this kind of boost?
We didn't have to go that far. One of the simplest things we did was in our production department. When I first came here, our field managers were carrying about 35 to 40 homes apiece. They were lucky to get into each home once a week. We cut their carry rate down to an average of about 15 or 18 homes per man, and now they are inside and inspecting every home, every day. We also went to a computerized scheduling system - this was done manually in the past - which helped the efficiency of the flow of information to our trade partners. We have a state-of-the-art IT department here that I never had when I was at some of the national builders.
What's the key focus for staying efficient as you grow?
We're always looking to reduce overhead and do more volume with the same number of people, and that's all about setting up the right processes. The whole point is to grow while we maintain quality and customer satisfaction. It's a simple matter of communicating, the basic blocking and tackling that we need to do every day.
Larry Gruber is CEO of Bielinski Homes, based in Waukesha, Wis.