Company Culture Helps Mercedes Homes Net NHQ Silver Award

When NHQ judges dug into Mercedes Homes earlier this summer, they found a clearly marked trail leading to customer satisfaction and superior business results. The source: company leaders at headquarters and in every division nurture a corporate culture that emphasizes career growth and advancement for employees. They also carry a deep commitment to corporate citizenship in the local community and focus on keeping customers satisfied with the homes the firm delivers.

Members of Mercedes Homes' Senior Management team include, from left, Stuart McDonald, Scott Buescher, Laura Siwicki and Craig Schmauss.

The NHQ judging team — led by Veridian Homes' Denis Leonard and NAHB Research Center's Frank Alexander — spent a week and a half probing into Mercedes headquarters in Melbourne, Fla., and three of the company's divisions.

"The most remarkable thing we found was the depth of the corporate culture," says Leonard. "Even in the Dallas division, far away from the influence of headquarters in Florida, every employee knew about 'Our House' and was able to tell us that the acronym in the company motto — 'Do It RITE' — stands for respect, integrity, trust and ethics. It's obvious those are not just words on the wall; they mean something to Mercedes' employees individually."

That corporate culture still emanates from founder Howard Buescher, 84. The firm has the feel of a small family business — even though it's now No. 28 in PB's Giant 400 rankings, with 12 divisions in four states closing 4,264 homes in 2006, for $1.23 billion in revenue. Five Buescher children — sons Keith, Scott and Jon, and daughters Susan Girard and Linda Swain — work in the company, which helps explain the strength of familial ties.

'Our House' is a single-page statement of values, purpose, vision, mission and focus displayed in every division and discussed regularly. Along with the 'Do It RITE' acronym, 'Our House' includes a statement of purpose: "To improve people's quality of life." The vision statement — "To create a premier, consistent and disciplined, operationally excellent company as measured by our employees, customers, trades, and shareholders" — probably comes closest to defining what this company is really all about. And the Bueschers are still the source of it, which shows the vital role of leadership in fostering such a quality-rich culture.

Of the eight categories in the NHQ judging process, Mercedes graded highest in leadership and not just at the corporate level, where Keith and Scott Buescher provide direction and corporate Director of Quality Laura Siwicki and Vice President of Operations Stuart McDonald exert their influence on quality processes. The other judging criterion where Mercedes excelled was human resources, where corporate scored a 97, and all three visited divisions exceeded that score, with the Tampa Bay division hitting a perfect 100, Space Coast 99 and Dallas 98.

All of the divisions showed exceptional depth in training programs, with some 5,555 hours of training that had already been logged this year among nearly 1,200 employees at the time of the site visits. The use of CDs to train employees and trades and introduce customers to Mercedes' approach to quality was cited as an industry best practice.

What shines through in all of this is the wisdom Howard Buescher transmitted to his kids: "The secret to growth is happy employees," COO Scott Buescher says today. "Happy employees with a clear mission, vision and values deliver quality products that keep customers happy.

"Culture is the core of it," he adds. "People want to be part of a team that accomplishes great things. Building homes for people is a noble endeavor, but every one of our divisions is also involved in a long list of charitable activities in their community. And training is also a key component. When employees are growing, bettering their own careers, it shows in the quality of their work and the way they relate to customers."

NHQ judges also cited Mercedes' mentoring and leadership development programs as industry best practices. Space Coast Division President David Barin says, "It's part of our job as division presidents to develop the future stars of the company. It's rare that you find a young executive that's good at all four areas — construction, sales, land and purchasing. We push them to advance their strengths, but to also fill in the gaps in their skill sets. We match vice presidents and division presidents with different strengths, so the division benefits today from skills that mesh, and the young execs also continue to develop."

The judges' report on Mercedes also identifies technological innovation as a key strength, which should come as no surprise since this magazine in October 2005 reported on the firm's pioneering development of homes with cast-in-place solid concrete walls that withstand hurricane winds of 200 mph.

Solid-pour homes are now 65 percent of the production in the Space Coast division. Mercedes spent eight years collaborating with University of Florida building scientists and engineers, HUD's Partnership for Advancing Technology in Housing (PATH) and the Federal Emergency Management Administration to develop the solid-pour system. It can use the forms to build every product in its portfolio.

The housing recession in Florida crimped Mercedes' plans to move this technology beyond the Space Coast and Central Florida. Solid-pour homes carry a $3,000 to $5,000 premium in price, and the market now resists any upward movement. "But the superior strength and storm resistance of this technology has appeal to customers," says Space Coast President David Barin. "And we like that it offers more control of labor costs and less waste on the job site. We will eventually go to all solid-pour product in this division."