flexiblefullpage - default
Currently Reading

Sustaining Innovation

Advertisement
billboard - default

Sustaining Innovation

A week or so ago I sat in the audience and listened as the CEO of a company with an undisputed No. 1 position in the marketplace explained to senior managers and customers why the organization must focus on innovation if it is to sustain market-beating...


By Heather McCune, Editor in Chief February 28, 2003
This article first appeared in the PB March 2003 issue of Pro Builder.

 

Heather McCune, Editor in Chief

 

A week or so ago I sat in the audience and listened as the CEO of a company with an undisputed No. 1 position in the marketplace explained to senior managers and customers why the organization must focus on innovation if it is to sustain market-beating levels of performance. As I watched those around me, most sat in stunned silence. This clearly wasn't the message they had expected from the CEO of a company that has experienced year-over-year double-digit increases in sales and significant growth in market share.

There was among the audience members a bit of confusion. They had expected - they wanted - the CEO to deliver a speech celebrating the company’s successes. Everybody had worked hard, made the extra call, delivered step-beyond service and now was in a mood to celebrate. While all watched intently and listened politely, their body language said, "Why is this guy standing at the podium telling us about change?"

I didn’t envy this man and the message he had to deliver that day. Had he been talking to managers in the battered manufacturing or electronic sector, the message of innovation, of change, at least would have been expected. However, among companies in all segments of the residential construction industry, it's hard to imagine a need for change when we're in the midst of a decade-long expansion. Mortgage rates remain at record lows, new home prices continue to rise, and yet the value equation for buyers appreciates even faster. Real estate is the investment of choice for more and more Americans.

What's more, economists, statisticians and most every think tank say no end to the good times is in sight.

Demographics support growth in the new home market for at least another decade. Aging baby boomers will dominate the new home market for years to come as the number of 53-year-olds increases by 22% during the next eight years.

Balancing this continuing market force is an ethnically diverse group of entry-level and first-time home buyers.

With all this optimism on the horizon, why all the talk of change? Growth, after all, doesn't have to be the result of change. As one attendee whispered to another in colorful terms that are cleaned up here for the retelling: "We're not selling what we have well enough to all the people who need it or we'd have even more customers. Why not concentrate on that rather than on new stuff?"

There is no easy answer to that question, but for guidance we have no choice but to look at the value equation every business offers its customers. This CEO knew his company delivered its buyers a superior product today and yet tomorrow the definition of a superior product could be very different. Planning the products and/or services to meet that new definition can't wait until tomorrow. If it did, someone else already would have the answer and be in the process of replacing today's No. 1 company.

It's the same reason builders and architects forever seek new ways to use space within a home; to deliver that storage solution, networking niche or private space that shoppers didn't even know they wanted until they saw it. It's the impetus for land planners and developers to learn new and better techniques for creating communities that foster a connection among residents, between the new and the old, the commercial and residential. It's the reason columnists such as Scott Sedam never stop needling builders, suppliers and trades to find a better way to work together to build businesses and not just houses.

It is also the reason that CEO stood in front of a less-than-receptive audience and talked about innovation, about change. It's not about becoming a market leader. The work is about sustaining it.

Advertisement
leaderboard2 - default

Tags

Related Stories

Hamlet Homes' Mike Brodsky on Finding Successors and Letting Go

A transition that involved a national executive search, an employee buyout, and Builder 20 group mentorship to save the deal

Time-Machine Lessons

We ask custom builders: If you could redo your first house or revisit the first years of running your business, what would you do differently?

Back Story: Green Gables Opens Up Every Aspect of its Design/Build Process to Clients

"You never want to get to the next phase and realize somebody's not happy."

 

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category

Delaware-based Schell Brothers, our 2023 Builder of the Year, brings a refreshing approach to delivering homes and measuring success with an overriding mission of happiness

NAHB Chairman's Message: In a challenging business environment for home builders, and with higher housing costs for families, the National Association of Home Builders is working to help home builders better meet the nation's housing needs

Sure there are challenges, but overall, Pro Builder's annual Housing Forecast Survey finds home builders are optimistic about the coming year

Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.