The Quality Process

Seven years ago, when the National Housing Quality Awards were introduced, most builders struggled to figure out how quality management could help their companies. An award program based on the renowned Malcolm Baldrige criteria seemed beyond reach for even the best builders. The concepts of customer-focused business processes and structured improvement methods were foreign to many and understood by few.

This year’s applicants demonstrate just how far we have come. The achievements of the winning builders are a testimony not only to them, but also to how far we have come as an industry.

Earning the National Housing Quality Award is not easy. The application forces companies to examine their management, operations, constructed product and business results in depth.

The judges met May 31 to consider applications for the 2001 NHQ Award. The judging panel consists of Tom Gillespie, Kennedy Community Development; Heather McCune, Professional Builder magazine; Bruce Mohagen, Simpson Strong-tie; Ken Neumann, Neumann Homes; Diane Rivera, Shea Homes San Diego; and Jack Willenbrock, JHW: CM Consultants.

Evaluation Criteria

Each entrant is reviewed and rated in eight categories:

• Leadership: Alignment of everyone in the organization with a customer-focused purpose and values.
• Strategic Planning: Creating a future vision for the organization and a plan to get there.
• Customer Satisfaction: Offering products and services that meet customer needs and then performing well from the buyer’s point of view.
• Performance Management: Operational excellence resulting from well-designed work processes that are tightly managed and improved with the customer in mind.
• Human Resources: Developing the full potential of employees and encouraging activities that support the corporate performance and development objectives.
• Construction Quality: Systematic quality assurance approaches that ensure high-performing, trouble-free products and services.
• Supplier Partnerships: Fostering high-performance relationships with trade contractors and product manufacturers.
• Business Results: How customer-focused quality management practices translate into measurable results.

Judges evaluated each applicant to determine to what extent it embraced a customer focus and systematically embedded it within its business practices. Those that passed the initial selection were scheduled for a site visit.

On the site visits, each finalist spent at least a day with a team of judges. The finalists explained the practices cited in their applications. Details and supporting information were reviewed. Judges also interviewed employees and trade contractors, and examined homes under construction.

Changing Focus to Customer Needs

This year’s NHQ applicants demonstrate a real commitment to and understanding of customer needs. Mohagen says, "It was remarkable to see the strong customer focus in the two Gold winners, who serve drastically different markets: high-end custom homes and manufactured housing, which tends to be thought of as a lower-price housing market."

Mohagen also was impressed with the partnerships these builders created with their subcontractors. They went beyond just supplying specs to their subs and instead involved them more in the process of building houses. These partnerships have a lot to do with producing a better-quality product, Mohagen says.

Rivera echoes Mohagen’s comments regarding trade partner relations and also notes that this year’s entrants emphasized employee development. "It is the best I have seen in six years," she says, attributing this development to the criteria for the National Housing Quality Awards. "Builders have to be a bit more focused in the way they identify critical factors for success in their business."

Gillespie agrees that there was a trend toward improvement in human resource development as builders are doing a better job of tapping into the knowledge base of their employees. On the downside, Gillespie notes a lack of understanding by some NHQ applicants for the basic drivers of customer satisfaction:

1. Deliver a complete house.

2. Deliver a house on time.

3. Be responsive to the customer.

To rectify this problem, Gillespie suggests builders look at the home buying process from a customer’s perspective and not from their own. "If builders deploy the voice of the customer throughout their entire organization, a better business will result."

The examination process -- both internal and external -- required by the National Housing Quality Award application is the most important process to improve a business, Gillespie says. Applying for NHQ forces a builder to think through every aspect of the company.

The NHQ Award is more than recognition for quality achievement. It is an important step in the quality journey for home builders that apply. It sets a benchmark to strive for and a model for improvement.