Success Drivers for Home Builders

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What are the most important keys to success for a home builder?

January 01, 2000

What are the most important keys to success for a homebuilder? Answer this question right and you are half way there. Use it to drive your organization’s priorities, and success is assured. There are two simple, strategically important, steps that will lead your organization in the right direction.

First, identify between three and six key success drivers. Some drivers, such as customer satisfaction, are common to all builders, but the rest are as unique as your company. John Wieland Homes and Neighborhoods, a 1995 NHQ winner, convened its senior managers to define the company’s key performance drivers and related measures in light of it’s mission and core values:

  • Profit as measured by gross margin and net income.
  • Production as measured by cycle time, budget variance, and safety ratings.
  • Quality as measured by in-house inspections, percent of zero item closing punch-lists, and number of service requests.
  • Customer satisfaction as measured by a series of feedback surveys.
    During a yearly planning retreat, senior managers review key performance drivers and make changes to reflect the competitive environment and long-term thinking.
    The next step is to focus the organization on improving the performance of key success drivers. Shea Homes Arizona, this year’s NHQ winner, in its yearly planning process, sets annual and long-term stretch targets for each of its key drivers. Action plans detail how each improvement will be accomplished.

Aligning and motivating the Shea organization toward the key drivers is reinforced by a series of coordinated efforts. Management shows that they are serious about key drivers every month when they review results with all employees. Bonuses based on achieving the improvement goals get everyone’s attention. Each associate’s development plan and personal performance evaluation is guided by business driver priorities.

You can send an equally powerful message. Now is the time to harness the power of key success drivers to guide the success of your company.
Questions? Want to be on our Quality email list? Call the NAHB Research Center’s HomeBase Hotline 800/898-2842 or email homebase@nahbrc.org.

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