WHEN KB HOME EMPLOYEE Paul Anderson walks into his office in the morning and logs onto his computer, he is automatically taken to KB University. He typically glances at KB's stock quote and then takes in information on an interest rate swing, a government ruling, or a message from chairman and CEO Bruce Karatz.
Next, Anderson, a KB performance manager and coach himself, will click on “My Scorecard” to make sure he's up to date on his personalized training calendar and to see if any new educational coursework requires his attention. Each morning, his customized “roadmap to success,” as KBU senior director Wade Mayhue calls it, is staring him in the face.
The KBU roadmap has become part of the company's day-to-day experience. That's exactly what senior vice president of human resources Gary Ray had in mind when he came to KB Home from PepsiCo in 1996. Rather than build a silo of training and development, Ray's vision was to create something that would be closely intertwined with every aspect of the company: its vision, its values, its identity, and its ultimate success. In effect, Ray sought to engineer a culture. With the help of Mayhue, it appears that he's done it.
“I'm most proud of the fact that [KBU] is part of the day-to-day fabric at KB Home,” says Mayhue.
Creating a learning-driven culture isn't the easiest thing to do in business. But builders who've made continuous learning central to their organizations say it's essential if they are to keep up with the breakneck growth and constant change that has characterized their industry for the past several years. “We have an overriding assumption that the industry is always changing,” says Larry Webb, CEO of Newport Beach-based John Laing Homes. “And the more you try to be sensitive to that and the more open you are to new ideas, there is greater chance you're going to succeed.”
Like KB Home, John Laing has developed its own “institute of higher learning,” called John Laing University. The most developed components of JLU, which is also based around a university-like menu of online courses, are its sales and marketing and customer service offerings, Webb says. The company is just about finished developing its online series of construction courses as well.
Poised For Promotion For KB Home, continuous education fuels a deeper strategy. Driven by the constant need to keep its frontline and senior manager pipeline filled with capable people, KB Home has set a goal that at any given time, 15 percent of its employees need to be identified as “promotable,” and there needs to be a development plan in place to get them to the next level. This kind of preparation allows the builder to go where (and when) it wants to go. KB's Treasure Coast division in Florida, for example, recently delivered its first homes less than a year after establishing a presence there. The company executed the rapid startup by transferring in a group of “promotable” employees in which it had already invested.
The challenge, of course, is coming up with an effective continuous learning system that primes already time-strapped employees for promotion. One of the primary means that KBU has used to create its learning culture is actually quite simple: certify everything. In 2003, the company awarded more than 65,000 certifications to its 5,000 employees, averaging out to 13 certifications per employee. Each certification is bite-sized, representing three to four hours of training. Still, that translates into an employee averaging at least 40 hours of education a year—more than even the Motorolas and the General Electrics of the world, points out Mayhue.
Still, KBU is more than just an online tool, says Ray. “KBU is a portal intranet site, but it's really the concept or belief that this is a continuously evolving and learning organization,” he says. In that respect, KBU is closely intertwined with the goals within the company's performance management system as well as with each employee's designated benchmarks.
In addition to the e-learning tools, the builder's blended learning arsenal includes documents and manuals, self-directed study guides, and face-to-face seminars. Regardless of the learning medium, participants generally take online tests to earn certifications. If they don't pass, they receive additional review materials, even if the content came from an in-person seminar. “In our culture, we'll see people get a 90 percent, which is passing, and then go back and take it two more times and get 100,” says Mayhue. “We're a performance culture.”
Each time employees complete a certification, they receive a pop-up “e-certificate.” They print it out and give it to their managers to sign, creating a built-in performance dialogue. “If I want to tell my managers what a great job I'm doing, I show them my transcript,” says Mayhue.
Similar to KB, metrics and expectations are key drivers behind education efforts at Houston-based David Weekley Homes. “There are very specific training schedules, and there are validation points inside those training schedules,” says vice president of operations Mike Humphrey. For sales staff, for example, the company sets the expectation with new hires that after a 30-day training period, individuals should be capable of selling homes even though training continues after that period. “So it's the accountability side of the training that's important as well,” says Humphreys.
Cultural Immersion Companies that make learning a part of their culture tend to start by educating employees on corporate culture—its values, vision, and the way it does business. “When you get an organization using the same language, the same measures, and viewing the business in the same way, that is a huge competitive advantage,” says Ray.
Employment at David Weekley starts with a two-day seminar called Weekley 101. “A lot of what comes out of [Weekley] 101 is the philosophy of training here,” says Humphrey. “We talk communication, and we talk about teamwork.”
All of Shea Homes' divisions offer some form of program on company culture. At the company's San Diego division, all new hires receive training via an eight-hour course that emphasizes the company's vision, mission, values, history, and brand. “It's really dipping them in the culture of our company,” says Diane Rivera, the San Diego division's director of marketing and a key force behind its educational efforts.
And that's only the beginning of the division's cultural training. Because Shea employs the principles of business author Stephen Covey, new staff members at all divisions go through Covey's Seven Habits of Highly Effective People training. Certified staff members from all levels of the company teach the 24-hour course, “from the president on down to administrative-level [people],” says Cathy Huff, vice president of human resources at Shea's Southern California division. In addition, because Shea is a Six Sigma company, all staff members receive training in that discipline as well.
At the San Diego division, next comes training in the Platinum Standards, 15 standards of behavior that concern how staff should treat customers, trade partners, and fellow staff. The training consists of six four-hour sessions; however, the standards—which were developed out of the Ritz Carlton's Legendary Service training attended by Rivera and other Shea staff—are not merely an education tool, for they serve as benchmarks for the entire company. According to Rivera, home buyer satisfaction scores have never been higher.
Staffing The Bus Like any cultural attribute, a true culture of learning starts with the very people you hire, say builders with top programs. Scott Sedam, president of Northville, Mich.-based True North Development and the man who played a big role in transforming Pulte into a learning culture during the 1990s, agrees that, like anything else, it all starts with who you hire. “I go very much with Jim Collins in Good to Great when he talks about how the hallmark of great companies is that they get the right people on the bus and then they get them in the right seats on the bus,” he says.
And that means finding people who are excited to learn. As John Laing Homes' Webb says, “You need to hire people who are interested in change and growth.”
While companies with top-drawer education programs generally have a CEO that firmly believes in learning, Webb, a former social studies teacher, says that in some ways an education culture starts from the bottom. “I could be singing the praises of this stuff all day, but if I was singing to people who didn't know what I was talking about, it wouldn't help,” he says.
KB's Ray is of the same mindset, explaining that candidates go through extensive testing to see whether the fit is right. That testing, he says, includes items on such areas as intellectual curiosity. “We have a very programmatic approach to the way we recruit,” he says.
During the selection process, not only should companies seek out willing learners, they also need to share their learning cultures with candidates, as does David Weekley.
“We talk about it during the interview process and the selection process, it's gone over at the point of hire, and then it's reinforced strongly when they come to Houston [for the company's orientation],” says Humphrey, adding that the company's retention rate is the highest it's been since he came to the builder 16 years ago.
Echoes Sedam: “When people come to interview, what's the message you're putting out to them about who you are, what you're looking for, what your values are, and what matters?”
Likewise, from the candidate's perspective, a company that demonstrates its commitment to learning is generally perceived as a better place to work. Sedam points to the experience of his son, who now works for Pulte. “When he interviewed there, and they said, ‘You'll go through a 13-week mentoring program, and you'll have continued interaction with your mentor—programmed the first year, then informal after that—and you'll get at least three weeks of classroom training your first year,' that really excited him,” says Sedam.
An obvious indicator of a company's commitment to ongoing learning is the capital that it invests. Since education initiatives are not self-contained silos but organic initiatives that permeate the entire company, costs are not easy to quantify, executives point out. And when costs can be tallied up, most companies are reticent about making them known.
At Weekley, says Humphrey, when you add up the dollars, “it's a fair amount of money.” The annual budget for Weekley 101 alone, for example, is about $200,000. The company also has 21 full-time trainers on its payroll, from construction experts to sales pros. Shea's San Diego division has spent as much as 12 percent of total salaries on training—a hefty amount when you consider that most organizations that have fully developed training programs tend to spend closer to 4 percent to 6 percent, according to Rivera.
Another indicator of commitment is how close to the top educational champions and designers are positioned within their given companies. Humphrey reports directly to president and CEO John Johnson, while Ray reports to KB Home's CEO Bruce Karatz and also works closely with COO Jeff Mezger. Shea San Diego's Rivera, who shares education responsibilities with human resources, reports to division president Paul Barnes.
A Culture Of Change If these programs are designed to help managers adapt to change, it shouldn't be a surprise the programs themselves are also changing continuously. Ray says that KBU has already “gone through four iterations” since its inception in 1998, and that the company is constantly improving and refining it. With Shea San Diego's Platinum Standards firmly in place, the division is now in the midst of perhaps one of its most ambitious learning initiatives yet: developing a skills-based training program for all 55 positions in the division.
KB Home's Anderson, meanwhile, isn't looking at the KBU intranet with his morning cup of coffee only. Particularly as a manager and trainer, Anderson is on the portal throughout the day, tracking the coursework of sales counselors to make sure they are keeping up with their ongoing certifications, reviewing the homework assignments of new hires, and following up with any individuals who may not have mastered the content.
And, of course, Anderson is keeping up with his own certifications. “I'm checking daily, if not weekly, to make sure I'm on top of things,” he says.
Industrial psychologist Joe Thigpen, president of Thigpen Consulting, runs the program with Webb. Thigpen says he loves to watch Webb, who taught high school social studies for seven years in the 1970s, conduct sessions. “You can just see it,” says Thigpen. “His eyes light up when he gets before a group and he has the chance to teach a segment. You can see he must have been a very good teacher.”
During the program, Webb often leads discussions on books that may have no direct connection with building, such as Michael Shaara's Killer Angels, a Civil War novel rife with leadership lessons. “Larry's the champion and I'm the catalyst,” says Thigpen.
Targeted toward 10 to 15 managers below the division-president level, the year-long program consists of four installments, each lasting three days. The installments focus on:
Leading the John Laing way. Presenters immerse participants in what's special about the company, and Webb tells what he's passionate about. Participants also get a “firemen's physical” to gauge their level of fitness. “It's just a great first three days because: one, it's motivational; two, they walk home with tips they can use right away; and three, they get very quickly that [the program] is not for the faint of heart because we're going to engage them fully for a year,” says Thigpen.
Developing leadership skills. Participants attend the Center for Creative Leadership's prestigious leadership development program to hear world class presentations. They also will receive in-depth assessments on their leadership tendencies.
Building relationships. Thigpen brings in communication experts to teach participants how to work more effectively with other people.
Building teams. Replete with real-life team challenges, the final session covers how to inspire people to do more than they ever thought possible—and how to address performance challenges when people don't step up.
Learn more about markets featured in this article: San Diego, CA.