By putting their employees first, on-your-lot builder Wayne Homes has created a culture of treating both internal and external customers right.
As the executive team of Wayne Homes received feedback from examiners on its National Housing Quality Silver Award, all they wanted to know was what they could do to get better. Finally, NHQ lead examiner Kevin Estes had to stop and remind them that they do a lot of things incredibly well.
“You guys rock,” Estes told the team during a recent NHQ Awards feedback call. “The people and the culture you have there are amazing.”
“We really want to rock some more,” CEO David Logsdon said.
Based in Uniontown, Ohio, Wayne Homes is an on-your-lot builder operating in more than 100 counties in Ohio, Pennsylvania, Michigan, Indiana, and West Virginia. Annually, the company builds about 400 houses a year, a number that has remained steady in markets where permits have been down 30 percent, Logsdon says.
Started in 1973, Wayne Homes merged with Centex in 1998. It went private again at the end of 2007, when Logsdon and Bill Post, both company veterans, repurchased its assets. They say their time with Centex sharpened the company’s strategic planning processes, enhanced its market research capabilities, and improved its supply chain management.
NHQ Silver Award
Markets: 100-plus counties in Ohio, Pennsylvania, Michigan, Indiana, and West Virginia
2011 revenue: $77 million
2011 closings: 375
Quality Best Practices
• Rigorous hiring process — For instance, the company will interview an applicant’s spouse or significant other to get to know the person as a whole.
• Personal development — The builder recently launched Wayne Homes University (WHU), an in-house continuing education resource with training programs in sales, production, and back-office functions. WHU also encourages employees to become mentors/teachers to staff members.
• OFI (opportunity for improvement) system — Employees, trades, and even customers can submit suggestions for improving any part of the business or product. Submissions are evaluated weekly by an OFI committee.
• Construction quality — For example, the builder utilizes unannounced jobsite inspections to ensure that homes are delivered on time, complete, and up to specifications.
The examiners saw all that and more in their site visit. “Wayne Homes is on the cusp of rising to the highest levels of quality management,” they said in their feedback report.
Their highest praise was for Wayne Homes’ personnel management. The company excels at employee selection and development, as well as staff performance management, wellbeing, motivation, satisfaction, and compensation. The examiners identified several HR best practices.
• Leadership meetings that include assistance with personal goals. Managers are tasked to sit down with their employees twice a month to discuss not only the employees’ career and educational plans, but anything else that the company can help them with. “There has to be a certain amount of trust built into it for it to be a genuine conversation and be beneficial to the employees,” Estes said. “Employees said it’s really neat that the company does this.”
• Two days a year of paid leave for charitable work of the employee’s choice. “That’s a pretty big investment,” Estes said. “It puts the decision process in the employees’ hands to choose what they want to do.”
• A rigorous hiring process that includes an interview with the applicant’s spouse or significant other. “They really see the employee as a whole person,” Estes said. “Their culture values that and pulls that out.”
Estes also praised the company’s concept of an internal customer and a culture of service. "They had a comment in their application that the customer is second,” he said. “The first thing we have to do is treat each other properly to provide great service. They’re executing that well.”
Another best practice the examiners identified was Wayne Homes’ process of recording sales calls and using them for training. Maurie Jones, the builder’s VP of marketing, says the idea came from a system they used to gauge the effectiveness of various media, whereby each type of media had a different phone number and all the calls were recorded.
“We figured that if we were recording them, we might as well listen,” says Jones. “The information we get is phenomenal.”
Jones reviews the calls and passes along to sales managers both calls that are outstanding and ones that identify challenges for training purposes. For instance, they found out from listening to the calls that sales associates needed training on explaining how to get to some of their model home centers. The calls are also used as a training tool at Wayne Homes University, the company’s in-house continuing education program.
“We’ve come a long way,” says Jones. “Most builders have no idea what their salespeople are telling customers.”
The examiners noted that, unlike many builders, Wayne Homes doesn’t tie customer satisfaction to compensation. Company president George Murphy says that by hiring the right people, it’s not needed.
“That’s just the job for everybody,” says Murphy. “It’s the way you have to live your life.”
“Pay is not always the highest motivator,” Logsdon adds. “We have regular recognition of our heroes. We do that on a daily, weekly, monthly, quarterly, and annual basis.”
The examiners picked up on that, noting that Wayne Homes has programs for both its employees and trade partners that focus on “catching people doing things right.”
Building on success
The examiners noted that the company is still in the early stages of implementing several recommendations from its 2010 NHQ review (the builder won Silver that year, as well), particularly as it relates to trade contractors. Many of those steps, including the creation of a trade council and involving trades in the company’s charitable efforts, will play a larger role in helping to take the company to the next level.
One thing that is holding Wayne Homes back from reaching NHQ Gold, Estes said, is the fact that it doesn’t use a third party to survey its customers.
According to its application, Wayne Homes gauges its success via a modified version of the Net Promoter Index (trademarked by Bain & Co. and customer loyalty guru Fred Reichheld). It combines “willingness to recommend” and “overall experience” scores to be its index for continuous improvement because “customers who score us a 9 or 10 on both questions refer us at four times the rate of those customers who score us a 9 or 10 on ‘willingness’ alone,” says Logsdon. For transparency and teammate self-motivation, all survey scores, including customer comments, are available daily with rankings provided weekly.
Logsdon says that when faced with the choice of adding third-party surveying or keeping an employee and using the information the company gets internally, they went with keeping a person. The builder has had a third party validate their internal information and Logsdon feels confident that their survey method is providing an accurate picture of their customers’ satisfaction.
For the coming year, the Wayne Homes executives say they’ll continue to work on their trade partner relationships. They’re considering providing their trade contractors with scorecards to give them meaningful feedback on improvement. The examiners also recommended giving them more specific information on the quality tolerances for scopes of work.
They’ll also work on increasing the benefit of their “opportunity for improvement,” or OFI, process, a method of allowing anyone, including customers, to submit suggestions on ways to improve quality and customer satisfaction. The examiners identified it as a best practice, but noted that the next level would be to quantify the improvements’ impact.
“This is one way to get even better,” says Murphy. “That’s what we want to do — get better every day.”