Leading a home building business is a lot like running a sports team. Think about the logistics of practicing, analyzing the opponent, making strategic player trades: All are decisions that drive the team towards the ultimate prize of winning a championship, or, in business, profitability. You see this in every facet of a professional sports team or when a business is working in step with the perfect vision and mission from leadership. Their forces become unbeatable.
The boom market for home builders over the last several years has been like life on easy street. Build it and they will come—customers standing in line, reservations, and unlimited investor money. It was like nothing we have ever seen, and it was fun while it lasted.
The boom market no longer exists. The current market—which we'll have to endure through 2007 and into 2008—will drive poorly run building companies out of business. As many will soon find out, great markets cover up a lot of inefficiencies, and to be competitive, these builders will need to change the way they run their business and focus on a new vision, ?mission, and strategy.
Last November at the BIG BUILDER '06 conference in Las Vegas, I said “50 percent of builders in business will not be here at the end of 2008.” Only companies that have a good plan, strong management, and all employees focused on achieving the game plan will win the future championship of “profitability.” Today's market is a formidable opponent.
A winning builder in 2007 will need to be focused on its organization and market. The winning organization begins with a clear vision, mission, and strategy that, when executed, differentiates it and gives it a competitive advantage.
The vision must inspire. It illustrates what the organization will look like in the future. The mission statement supports the vision by describing behavior that all employees can perform as well as the principles to guide their daily decisions. The strategy tells how employees will make the mission and vision a reality.
All must be communicated and reinforced through the ranks so that all team members understand their roles. Staffers need to know that what they do matters. They make the difference between success and failure. This promotes pride and ownership in their work and as a result, increased customer satisfaction. The key is consistent execution. Customer satisfaction hinges on the customer's last experience.
Positioning for Success
Ask yourself: Are my vision, mission, and strategy for my company going to work? Are they a stretch, yet achievable? Are they flexible enough to change when market conditions change? Have I clearly and consistently communicated them to everyone in my company? Are my behaviors consistent with the vision and mission? Is my leadership team in alignment and committed to making the vision a reality? Are they executing behaviors consistent with the vision and mission? Do all employees know how their actions affect the organization's results? Are all employees getting rewarded for the right behaviors? Answering yes to every single one of these questions positions your organization for success in 2007.
Clear and well-communicated vision, mission, and strategy will result in sales, excellent customer service, and profitability, if they are consistently implemented. One win today does not guarantee you'll win the championship. The future brings the challenges of higher costs, lower margins, and fewer sales.
Anticipate these changing market conditions and look for ways to achieve and maintain your competitive advantage. Revisit your strategy to see if it is the best way to meet your vision for the future. The game is underway, the season is long, the opponent is formidable, and the stakes are high … are you positioned to win?
–Richard Hawkes, former CEO Holiday Builders, currently heads his own consultancy. Email: firstname.lastname@example.org.