Business Management: 25 New Year's Resolutions for Home Builders

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Scott Sedam compiles suggestions for the New Year from industry consultants.

January 21, 2015

New Year’s resolutions are perhaps the most followed and abused of all holiday traditions short of eating too much at Thanksgiving and drinking too much on New Year’s Eve. The vast majority of us have made these pledges for improvement and seen them slip by the wayside as the year soldiers on and business as usual triumphs. Despite that history, it is human nature to not just hope to do better but to try, try, and try again. Even if our foot-long list of resolutions only yields an inch of progress, well, that’s an inch farther than we were before. 
 
Knowing that many of you have recently considered your New Year’s list of things you would like to change, it seems a good time to offer some suggestions. I polled nine consultants who work with three different firms involved in our TrueNorth Lean Process implementations with builders all across the U.S., Canada, and points overseas, and posed a question based on their years of experience. “If you could make just one resolution for builders in 2015, what would that be? What could a builder resolve to do that, if implemented, would make a genuine difference?”
 
Of course, most could not stop at just one, so the list grew from the initial goal of 12 to 25, and I could not resist adding just one of my own. Our group of 10 includes architects, engineers, and experienced building industry consultants. With as many as 45 years of experience individually and a combined total of nearly 300 years of working in the industry, these folks help builders, suppliers, and trades all day, every day. That’s perspective.
 
The resolutions run the gamut from high-level operating philosophy to daily construction and design practices. I did not ask the participants to sugarcoat anything, and I know PB’s readers would not either. So if you find some of these suggestions a bit harsh, remember that they are all based on what their authors have seen work, what has failed, and what gets in the way of builder success. Their exhortations on your behalf are there to show you the way to improved operations, greater customer satisfaction, solutions to the trade and personnel shortages, and in the end, more profit. 

  1.  I will shut up and, for once, truly listen to what my trades and suppliers have been trying to tell me for years. I will banish arrogance from my firm. It’s the biggest obstacle to progress.  
    — Eric Timmis, TrueNorth
  2. I resolve to find a good coach, because it’s virtually impossible to change paradigms without an outside influence to challenge my thinking. I need to think differently about my business model from design to schedule to marketing to supply chain.  
    — Tom Noonan, TrueNorth
  3. I resolve to “Cap the Red Sharpie” by getting so good at up-front collaboration, providing the best plans, lot-specific construction drawings and details, and walking the new homes, until redlines are no longer necessary.
    — Todd Hallett, TK Design
  4. I resolve to create a trade/supplier advisory group that will be empowered to help us build the paradigms that will allow mutual profitability. 
    — Tom Noonan, TrueNorth
  5. I will choose a plan development process and timeline and stick to it. Changing priorities does nothing but ensure longer and less accurate plan development across the board. I will identify the required review process to get the plan around the horn and gain the required feedback at the proper time. Once the plan is done, I will maintain it.  
    — Mike Kozlowski, Apex Technology
  6. I resolve to work on my business, not for my business. I will hire the right people, train them, and learn to delegate, not get caught up micro-managing day-to-day building issues.  
    — Eric Tiffin, TK Design
  7. I will require and maintain training at all levels. We have one-third old hands from the previous culture, one-third hired from other builders, and one-third new to the industry. We don’t communicate well and we don’t understand why. This year we will pull this culture together.  
    — Kent Hogan, TrueNorth
  8. I resolve to update post-recession plans. Designs that worked in 2006 will not work in today’s market.
    — Todd Hallett, TK Design
  9. This year I will try to understand my costs, then attack them. There’s waste everywhere: floor plan concepts, communication, trades, inspections, best practice jurisdictional precedents, etc. Reduce that waste and profit goes up.  
    — Jeff Arneson, Apex Technology
  10. I will stop nickel and diming the trades to death. I will strive to eliminate back charges and wasted trips. 
    — Hal Peller, TrueNorth
  11. I will dedicate myself to creating a culture of no fear in every area of my company, including our trades, our customers, and our own employees. I will encourage the sharing of brutal truth and be bold enough to respond appropriately. 
    — Eric Timmis, TrueNorth
  12. I will refuse to join the never-ending war of unsustainable bigger and bigger houses. If we are ever to truly reduce our environmental footprint we need to live well in smaller homes with higher densities. 
    — Kent Hogan, TrueNorth
  13. I will process flow our entire building process to identify and understand inefficiencies more clearly and seek opportunities to componentize. 
    — Jeff Arneson, Apex Technology
  14. I will spend the required time on scope development for consultants and get our money’s worth. I won’t ask, “How much for engineering?” without specifying exactly what I mean—code compliance, value optimization, program development? 
    — Mike Kozlowski, Apex Technology
  15. I resolve to never again hire an architect or engineer who cannot provide a clearly demonstrated understanding of the concepts of lean design and building. 
    — Scott Sedam, TrueNorth
  16. Whenever I am dissatisfied with my company’s performance, profit, or culture, I will recall Deming’s teaching that nearly 100 percent of a company’s problems can be traced back to management. We are responsible for creating systems, processes, and environments where employees succeed or fail. 
    — Tim Garrison, The Builder’s Engineer
  17. I will calculate the loads and the shear requirements in our houses. I will do this in a diligent, rational manner using a lean engineer and save many thousands on the cost of lumber, engineered wood, and concrete. 
    — Eric Timmis, TrueNorth
  18. I resolve to spend the time up front to create beautiful and livable yet highly efficient plans. Every dime spent upstream ensuring accuracy, details, and efficiency of plans and specifications is worth a dollar on the back end. Building without full, detailed construction drawings is simply throwing money away. 
    — Todd Hallett, TK Design
  19. I will ask our suppliers and trades, “What can I, the builder, specifically do that will help make you more profitable (beyond paying a higher bid price)?” 
    — Hal Peller, TrueNorth
  20. I resolve to collaborate fully with key suppliers and trades, getting them involved during the design and development stage. Their participation is critical to the goal of offering the best product and the lowest cost.
    — Todd Hallett, TK Design
  21. I will create and maintain a predictable schedule that suppliers and trades can count on. As the schedule goes, so goes the company. Our lives may not depend on it, but our sanity and profit does.
    — Hal Peller, TrueNorth
  22. I resolve to validate all construction drawings with on-site supplier/trade walks after the first model or prototype is built, then adjust plans. 
    — Todd Hallett, TK Design
  23. I will create a system to pay trades quickly and fairly for work performed outside the original scope and bid at our behest—then work to eliminate those occurrences.
    — Hal Peller, TrueNorth
  24. I resolve to read, share, and study with my team one of Scott Sedam’s articles every month and require each team member to generate at least one improvement opportunity based on what they learned. 
    — Tom Noonan, TrueNorth
  25.  I will flush the notion that because we have been doing it this way for 30 years, it must be the best way. There are other, smarter, leaner ways and people I can learn from, so I’d better start listening.  
    — Tim Garrison, The Builder’s Engineer

 
This is quite a list, but committing to all 25 this year would ensure failure. These resolutions are virtually all management, operations, and design, but similar lists can be generated for disciplines such as finance, land development, and sales and marketing. For example, “I resolve never again to have one option in my models that is not priced accurately and clearly.” 
 
I did not ask Tom Noonan to set me up with No. 24, above, and my first reaction was, “Nice, but too self-serving” so I left it out. I then recalled, however, how many people randomly stop me at shows or send emails and tell me how sharing one of my columns over the past two decades or so helped them personally or helped their team. The exchanges that really excite me relate how they used the column to specifically stimulate their team to attack an unresolved issue and solve it. They required team members to not just read the article for discussion, but come up with specific learning points and action items that can be applied directly to their local situation.
 
So here is my final resolution for you: “I resolve to not just peruse the magazine and maybe read an article quickly, but actually use it, learn from it, apply it, and improve something.” Each month you see articles from industry lights such as Charlie Scott on customer satisfaction, Bob Schultz on sales and marketing, and Todd Hallett on design, among others. Don’t simply read them and pass them around. Make them required reading and ask your people to come up with specific learning points. Even if they disagree with the advice that is offered, what a stimulating discussion you will have. It is no different than going to a builders’ show such as NAHB’s IBS, where many of you are reading this from the free copy of Professional Builder magazine that was offered around the hall. 
 
Most IBS visitors conduct what amounts to “industrial tourism” and wander about looking at product displays, catch a seminar or two, and perhaps arrange a couple of meetings. Smart people who attend engage their team in a specific, aggressive strategy and plan for learning. What if you treated the articles in this or any other industry publication similarly? How much more would your team learn and grow? How much happier would your customers be? How much more money would you make? I’ll make you this bet, it will be more than you think. 
 
So let me offer some help and a tool to get you started. Go to our website (www.truen.com), and you will find on the right hand side an offer for a PDF called, “Builder New Year’s Resolutions Checklist” and a PDF of the article itself. Download those and distribute them to the team. Set a date no more than a week or 10 days out and ask them to come prepared with the checklist completed. It will ask them to rate both how accomplished they feel the company is on each item and how important each is to your success in 2015. Then they get to pick the ones they feel personally strong about. Importantly, they will also find space for them to add the ones we missed, and we expect you to find many of those.
 
Work together for a morning or afternoon on this and don’t be surprised if you need more time. The goal is to create eight to 10 of the most critical resolutions for your own company in 2015, and maybe a few personal ones for yourself. Ask your people to do this as well and share both. Do all of this, and you have my personal guarantee of success. Write me. Tell me what you came up with and what your plans are. PB

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