Florida Home Builder Nabs Second NHQ Silver Award

For the second time, Pringle Development of Eustis, Fla., has earned a Silver National Housing Quality Award. The employee-owned home building company reports its revenues are higher and its market position stronger than ever due to strong leadership, improved construction quality and solid customer relationships.

By By Susan Bady, Senior Editor, Design | September 30, 2007

Research has shown that employee-owned companies are more productive, and Pringle Development is a classic example. The Eustis, Fla.-based company has posted some impressive numbers lately, including a 22 percent market share among the top eight active-adult home builders in central Florida. That's no small feat considering the intense competition for active-adult buyers in the region and the presence of large national builders like Del Webb and Lennar.

Pringle Development's President and CEO, Alan Parrow, says the company's drive to put the customer first is one reason for its healthy share of an intensely competitive market.

Pringle Development was founded in 1981 and so far has developed eight communities for the 55-and-over market. The company closed 569 homes in the fiscal year ending May 2007, for an average price of $246,055, excluding lot. In 2004, Pringle converted to an employee stock ownership plan (ESOP). Since then, the company's revenues have doubled, says President and CEO Alan Parrow.

"Every employee who works with customers does so as an owner," Parrow says. "This results in a totally different dynamic that not only helps us generate more referral business, but also goes a long way toward enabling us to deliver superior customer service."

NHQ judges named leadership, human resources and construction quality as Pringle's greatest strengths.

"We have a very strong culture driven by the company's founders and organized around a central unifying principle of 'Always do the right thing,'" he says. "We provide greater value than our competitors in three major ways: more choices in design and materials; superior quality of the final product; and outstanding, straightforward communications from the time buyers first visit our communities."

In addition to selling off-the-shelf plans, Pringle can create a set of plans from a buyer's rough sketches. Another unique selling proposition is its two-year deferral program. Parrow says many of the company's customers are moving from the Northeast and Midwest and need to sell an existing home and get their lives in order up north. Pringle allows them to defer construction on their new house for two years and limits their exposure to a 4 percent variance on the sale price.

Cycle Times Drop; Trades Rewarded

Parrow says Pringle's most visible achievements since winning the NHQ Silver Award in 2005 fall in the areas of construction and quality-control processes. In fiscal year 2007, the builder reduced cycle times by 42 percent while simultaneously improving quality, as measured by the number of items unfinished at closing and customer satisfaction scores measured by a third-party source.

"We did these things while delivering more homes than ever before during that period — actually 22 percent more than the previous year," he says.

Joe Ziler, executive director of operations, says that since the end of its fiscal year, Pringle has reduced cycle times by an additional 15 percent: "We've become a very disciplined, even-flow production company." Average cycle time is now 117 days compared with 125 days in fiscal year 2007 and 217 days in fiscal year 2006.

Pringle's field superintendents (referred to internally as "builders") use a 330-point checklist to evaluate construction processes, beginning with pre-slab prep and continuing through closing.

The company's quality assurance team examines the checklists for recurring problems. "This allows us to continuously improve processes and quality controls," Ziler says.

"It's also about getting the performance that you measure," adds Parrow. "We started posting the trade contractors' relative performance and letting them all look at it to see where they stood. It seemed to really spur them on to greater things."

These performance measurements come in the form of a monthly Builder Assessment Report (BAR). Trade partners with the best BAR scores for warranty service, inspections and work-crew attendance receive quarterly recognition.

Pringle is working on a way to tie the trade partners' contracts to a monetary incentive "so that there's a base price for a service or a product installation," says Parrow. "But that price can vary depending upon their performance in four key areas: job-site readiness, cleanliness, on-time performance and zero defects."

Ziler points out that the rate of failed inspections is down to less than 2 percent — no mean achievement in the state of Florida, where home inspections are particularly rigorous.

No Micromanaging

Pringle's corporate culture, says Ziler, is open and relaxed with a high level of accountability, but employees are not micromanaged. Each employee has access to internal software training and external training classes, including quality and safety system training, construction task training and customer satisfaction training.

Senior managers continuously reinforce Pringle's vision, mission and values with such tools as PringleNet, the company intranet. The company is transitioning to Microsoft SharePoint, which will provide a central repository for all documents. Employees can access key measurements, which are posted monthly. Suggestion boxes are always bulging with ideas, and every suggestion gets a response via e-mail.

Pringle Development Team

Like other builders, Pringle is facing significant challenges, including a housing backlog and demand that's drying up. "It went from a fire hydrant to a drip," says Ziler. But they're staying on track by keeping the right employees, managing costs while improving profitability and maintaining good land positions. And geographic expansion is on the horizon; the company is actively looking for sites in Georgia.

"Our strategic plan will guide the way to our future success," Parrow says. 

Pringle Development - 2006 NHQ Silver Award Winner 

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