Hovnanian Enterprises' Successor Candidate Profile

MANAGING PEOPLE Evaluated by six direct reports

1. My manager consults me on decisions that affect my work.
2. My manager demonstrates good leadership.
3. My manager encourages me to speak up and express my ideas.
4. My manager keeps me informed about changes in the company.
5. My manager will do something positive with the survey results.
6. My manager treats me fairly.
7. My manager is good at the business/technical side of management.
8. My manager is good at the people side of management.
9. My manager provides clear, understandable goals and assignments.
10. My manager provides recognition when I do a good job.
11. My manager helps me succeed by providing timely feedback, coaching and support.

MANAGING SELF Evaluated by six direct reports

1. My manager remains calm when confronted with work-related stress or opposition from others and does not overreact.
2. My manager exhibits a presence that conveys confidence, commands respect and instills confidence in others.
3. My manager keeps commitments around meeting times and other agreed upon actions.

OPERATIONS SKILLS Evaluated by manager Running the Business

Achieves area profitability projections and goals while focusing on quality, customer satisfaction, mortgage and title capture, safety, etc.

Makes sound and timely decisions in a fast-paced environment

Motivates team of associates to achieve targets and business results

Gathers and digests appropriate data regarding competition in the market area in order to make intelligent decisions regarding new community feasibility (absorption rates, prices, home specification and features, product design, approval issues, financial data and cost)

Broad understanding of land deals, structures and financial risks associated with them in terms of purchases

Consistently demonstrates the ability to execute on business plans

Broad product knowledge (includes company product and current designs being used in the marketplace) Land Acquisition

Broad understanding of land acquisition practices and K. Hovnanian Land Acquisition Policy and Procedures

Broad understanding of his/her current land mix, current locations and development trends and patterns

Broad understanding of alternative acquisition structures that can improve the results of each acquisition

Broad understanding of the best markets, land availability and brokers

Broad understanding of how pro forma works, including capital and ROI

Broad understanding of how to assess the feasibility of a property (feasibility pro forma)

Broad understanding of how to identify points of data that are critical to the decision-making process; can effectively communicate the critical data points and thought process to decision-makers Marketing

Broad understanding of the elements of a marketing plan for opening and marketing a new community (i.e., community and product offering, target market, competition, sales office setup/environment, grand opening strategy, models and merchandising, pricing, premiums, advertising, promotions, and special events

Broad understanding of customer's needs through research and decision-making based on facts and analysis

Understanding of how to create a plan to turn around slow-selling communities

Understanding of how to assess key strengths and weaknesses of his/her communities/products as compared with the competition (shopping the competition), and how to conduct a market analysis study

Understanding of how to develop a marketing and sales overhead budget and prepaid budget Sales

Broad understanding of the mortgage process, including strategies to increase buyer's willingness to purchase a K. Hovnanian Mortgage

Broad understanding of the role outside brokers play in enhancing or maintaining the sales pace

Broad understanding of Home Design Gallery policies and processes that affect community performance Financial/Profitability

Strong financial/analytical skills (including price versus absorption, profit and loss, inventory turnover, etc.)

Strong understanding of contract, start and delivery (CSD) budget cycle

Strong understanding of direct margin as it relates to CSD and community/area profitability

Strong understanding of community operating statement (COS), including explaining any variance of 5% either positive or negative

Strong understanding of community operating statements and income statements (revenue, expenses and net income)

Strong understanding of inventory projection process, impact of ROI and changes in inventory spending

Strong understanding of bond management, which includes determining bond type, completion dates

People Management

Demonstrates the ability to organize and lead diverse associates and teams for sustained results

Demonstrates the ability to create an open and candid environment that promotes the active sharing of information and ideas

Demonstrates the ability to plan and implement actions designed to train, develop and evaluate associates

Demonstrates a leadership style to fit the business situation, global context and people

Intervenes and resolves associate conflicts, and initiates performance improvement plans

Able to understand the strengths and weaknesses of candidates for community builder, area controller, land acquisition managers and other positions directly reporting to area president

Attracts, interviews, develops and maximizes the talent of people within his/her organization

This questionnaire also includes evaluations of leadership and land acquisition skills as well as operational results versus targets.