Congratulations to the winners that challenged themselves to meet NHQA criteria:
An example of the value and power of the NHQA is that while 50 percent of home builders went out of business between 2007-2012, over the past 25 years, more than 95 percent of NHQA recipients are still in business.
The Power of the NHQA
Winners of the NHQA continued during the recession to grow sales, expanding into new markets and achieving 100 percent customer satisfaction. They're building production and custom homes, within communities and build-on-your-lot. The homes range in price from $100K to over $1 million, and markets range from a focus on a single- state to covering 14 states. Whatever market, climate or home type your business focuses, on there are lessons to be learned here about improving your bottom-line.
NHQA builders use quality management tools and techniques to drive performance improvement to survive and thrive. In the profiles of each builder, you'll see leveraging of process mapping, DMAIC (Define, Measure, Analyze, Improve and Control) improvement teams, employee recognition, net promoter scores, balanced scorecards and kaizen lean events. Winners focus strongly on strategic planning, employee empowerment, trade relationships and of course the customer.
Evaluating your business against the Baldrige-based NHQA criteria can help you identify areas for improvement, just as winning builders have done. If you take the next step and apply for the award process itself, a team of home building and quality experts will provide you with a detailed feedback report on how to improve.
This report represents about 50 man-hours of evaluation, a value of $8,000. If you do well enough, you may receive a site visit which allows the judges to gain a more detailed insight to your business and therefore provide a more detailed feedback report. This report, including the site visit, represents 150 man hours or a value of $22,000.
A study of NHQA winners from 1993-2009 showed metrics such as gross profits of 12 to 20%, construction costs vs. budgets of +/- 1%, cycle time reductions of 15 to 50%, 98% zero defects at closing, defect reductions of 11 to 75%, 30% referral rates and trade satisfaction of 94%.
If you have questions about how the NHQA criteria works, how to write an application, prepare for a site visit, or implement the feedback report recommendations, these links will provide the answers you need.
Writing the NHQA application
Before and after the NHQA Site Visits
How to address and implement the NHQA Feedback Report opportunities for improvement
The real $$ value and impact of the NHQA Feedback Report
How to conduct self-assessment using the NHQA Criteria
The NHQA Model, explaining how the criteria functions
How green building connects with the NHQA Model
NHQA Frequently Asked Questions
Three NHQ Award judges—lead judge Serge Ogranovitch, Frank Alexander, and Denis Leonard—answered the twelve most frequently asked questions relating to the NHQ Award Program.
1. What is the NHQ Award?
The NHQ (National Housing Quality) Award was launched in 1992 and is dedicated to the advancement and recognition of organizational excellence in homebuilding. It is based on the Malcolm Baldrige Criteria for Performance Excellence that has been used nationally since 1987 and is now used by 43 State Quality Award Programs and by 60 countries.
The NHQ Award was initiated to assist those in the homebuilding industry improve every aspect of their business. It is based on a set of criteria to assess the organizational performance of builders, remodelers, trade contractors and suppliers. The criteria consist of eight sections: Leadership, Strategic Planning, Process Management, Customer Satisfaction, Human Resources, Construction Quality, Trade Relationship, and Business Results. The eight criteria provide a tool to evaluate an organization and identify strengths, as well as opportunities for improvement.
2. Who supports and funds the NHQ Award?
Professional Builder magazine sponsors the Award program. The program judges each volunteer their time and are responsible for all their personal travel and miscellaneous expenses. Most are previous NHQ Award winners and, having witnessed the impact that this program has had on their own business performance, have elected to support the NHQ Award program and give back to the industry. Others are quality and management systems experts working within the industry.
3. Why should we apply for the Award?
To quote a recent winner, “This is the best and most honest consulting an [organization] can get to improve their company. The program will help to improve the performance of your business and dramatically impact your bottom-line. The process of applying for the NHQ Award, and gaining the detailed feedback report from industry experts, can provide fast-track opportunities for improvement and help to reduce costs, defects, cycle times and improve customer, employee and trade partner satisfaction.
There are significant advantages for writing and submitting an application; yet the fees range only from $1,250 to $2,000, depending on your size and volume.
Even if you do not qualify for a site visit you will nonetheless receive a detailed feedback report written by the judges. This represents approximately 50 man-hours, or a value of about $8,000.
If you qualify to receive a site visit your feedback report will have been built upon approximately 150 man hours representing a value of over $22,000.00
4. What impacts have previous winners seen?
Based on articles featured in Professional Builder Magazine from 1993 through 2009 the following impacts were cited as direct results from the feedback to the NHQ Award application:
Profits (Gross Margins): 12-20%
Revenue: 15-100% increases per year
Construction Costs vs Budget: +/- 1%
Customer Satisfaction: 93-97%
Referral Rates: 29%
Cycle Time Reductions: 15-50%
Zero Defects at Closing: 98%
Defect Reductions: 11-75%
Employee Satisfaction: 94%
Trade Satisfaction: 95%
Customer Endorsements/Thank You Letters: 73%
Warranty Requests: 1 per every 15.5 homes
5. Who applies for the Award?
Home builders, and they apply for various reasons. Some apply for bragging rights; others to benchmark themselves against the best in the industry; but most apply with a strong desire to improve their company. Organizations of all sizes apply. Previous recipients have had as few as 15 employees, or up to several thousand. They've built 15 homes per year, or as many as 20,000. Many have been involved with entry level homes under $150,000, while others deal in homes in excess of $1 million. Regardless of how small or how large, production homes or custom, the NHQ Award is relevant to all builders and has provided measurable improvement for all builders that have taken the steps to apply. More than 60 companies have earned an NHQ Award; many have achieved recognition at one level and then reapplied to move to a higher level. Some have even returned years later to ensure that they continue to meet changing industry benchmarks and challenge themselves and earn the Gold again!
6. Business has been down, shouldn’t we wait?
With everyone attempting to discover new ways to compete, the NHQ Award provides an inner look at all your strengths and weaknesses. The feedback report will provide a detailed roadmap to guide you in the areas for improvement. Many applicants utilize the report as a strategic planning guide and have applied several years in a row—improving each year, and eventually working their way to a Gold Award.
A key lesson from previous applicants and winners is, just write the application and submit it. So, don’t wait, just get started. Receive your evaluation and feedback report as quickly as possible so you know where to focus, and in what way. Winners testify that that they found many ways to improve their business simply through the process of writing the application.
7. How hard is it to be the winner?
Every company that applies is a winner. First, for taking the first step to improving their business; and second, for benchmarking their company against the NHQ Award criteria. Many who are considering the NHQ Award program believe that they have to submit an application that is a work of art, with colorful graphics and detailed layouts. Not true. What the judges seek are accurate responses to the criteria questions posed in the application; a basic Word Document is all that is needed. NHQ Gold, Silver or Bronze Awards are available to every applicant every year. Your company is not in competition with the other applicants; you're evaluated solely on how well your organization measures up to the program criteria. During any award year there may be multiple awards presented at any or every level, or no award at all. How well each applicant scores against the criteria determine the results.
8. We’ve downsized and not all areas may be up to par. Shouldn’t we improve the weak areas first, and then apply?
If you've been thinking that you've been hit hard and won't look good on the application, remember that the entire homebuilding industry has been hit hard. Everyone’s performance is down. The judges are a part of the industry and fully understand this. If you apply now, you'll receive a valuable feedback report that will guide you in capitalizing on your existing strengths while providing expert assistance in overcoming those challenges. This can make the difference between survival and business excellence. Don’t wait.
9. What happens after we apply?
A team of judges, all experts in the homebuilding industry, quality management or both, will first review the application against the program criteria. Those that meet the base-line requirements, through an objective scoring procedure, will be scheduled to receive a site visit by the judges where the eight criteria areas will be explored in greater depth, first-hand at your place of business. Regardless of whether a site visit is warranted, the applicant will receive a detailed, actionable feedback report in support of continued improvement for its business.
10. What promotional opportunities are there?
Companies that receive an NHQ Award are featured in Professional Builder magazine; during presentations at the annual International Builder Show; and are licensed to utilize the NHQ Award logo in their marketing.
11. What about the application document we submit?
All information and materials provided by applicants are viewed only by the assigned panel of judges and are kept strictly confidential. A Non-Disclosure Agreement legally binds all judges.
You can incorporate the application into the daily facets of your business. For example, include it as part of your strategic planning and business plan, then share it with employees to provide deeper insight into the company and its objectives.
12. How do I get started?
After reviewing the NHQA application document, just begin answering each of the questions in all eight criteria areas as best you can. Provide as much detail as possible while complying with the total page-count requirement. That’s all it takes—and you're on your way to NHQ excellence.