NOW IT'S PROBABLY BEEN years since the last time a business executive anywhere could rightfully be accused of “resting on his laurels.” Still, there are many in big builder organizations, I'm almost sure, who right about now are at a fever pitch of frustration, thinking, “Hey, just a minute! You're telling me I just put up these incredible numbers this year, and last year, and the year before that, and I'm not going to get a blessed instant to step back and be proud before I have to hunker down for leaner, meaner times ahead?”
Two ways to look at that are: a) life's not fair; or b) actually, you've got a choice. You can, and probably should, seize a moment to celebrate that you and your teams won this year. Hands down, a flat out triumph. Whatever the challenge, people have made a habit of rising to it. We all know that “price power”—as much as it has masked flaws in home building's complex—can hardly explain nor account for much of the heroism we've seen in the past 12 months, across so many parts of our businesses. They say in lots of sports, you have to be good to be lucky. It would be a huge mistake to let your folks cross the threshold from 2005 into 2006 thinking that a turning market environment could render their accomplishments forgettable.
When we ask Larry Webb, CEO of John Laing Homes, to comment on the outlook for the business, his instincts along these lines kick in. We did ask him that in our “power panel” of CEOs, opening up this year's BIG BUILDER 05 show in Las Vegas in November. Without missing a beat, when he's asked about next year, he says “Boy, what an amazing year we're having.” Larry and the other CEOs credit their organizations for stunning performance, even as they ruefully reflect that this past year “might be the best year we'll ever have.” They're just not going to let 2005's achievements go unnoticed.
Don't mistake “we'll-never-have-a-year-like-this” statements as anything other than a message of motivation. Predicting tougher times ahead is less a concession to the market than a dare to outperform it. To whom? Their own people, of course. Even the most pragmatic CEO, the one with the most dour outlook on the “end of the bonanza,” sits there believing that his organization is positioned not only to survive, but to thrive in 2006, whatever the market conditions. Multiply that belief system times 200 big builder companies or more. For their leaders, complacency's a bigger enemy than long-term rates.
Our Strategies 2006 special report—with thanks in full to Visador Holding Corp., which sponsors the issue, but leaves 100 percent of the editorial decision-making to us—is a tactical punch-list for more trying times. Momentarily, anyway, until seasonal buying cycles settle into a genuine market trend, cost out assumptions will supplant price power expectations as the way to go.