WHEN KB HOME ANNOUNCED A COUPLE of years ago that it would no longer work with contractors who were not participating in the NAHB Research Center's National Housing Quality (NHQ) program, it surprised the industry. But now that the policy is solidly in place, the numbers are in, and the decision looks smarter than ever. Fewer callbacks, streamlined inspections, happier consumers, and (gasp!) even lower insurance premiums have resulted from the focus on quality.

That is because the company has tapped into something highly unusual: rapid growth concurrent with rising customer satisfaction.

Doug Eddie, quality manager for KB's Las Vegas division, notes that the company built more than 3,500 homes last year, moving from third to first place in number of units built in its market. At the same time, its J.D. Power satisfaction ranking climbed from ninth to third place, hovering around 95.3 percent.

“I think what the [NHQ] program did was introduce a language of quality that helped both the builder and trade partner get the dialogue going,” says Eddie. “Now, they're both moving toward a common goal, not an adversarial position.”

Payback But the rewards of a quality program have proven far more tangible than just good feelings among the crew. For example, Eddie says several of his trade contractors have just reported in with good news.

  • One plumber reports that he has reduced site visits by pickup crews (to correct errors or missed items on the jobsite) by 50 percent. What's behind this improvement? New inspection standards for plumbers.
  • “They're doing complete inspections,” notes Eddie, “one at underground, one at rough finish, another at final finish.”

    That process, according to Eddie, has made plumbers far more attentive to any potential underground breaks in fittings or pipes, damaged finishes, and improper rough-ins. And some potential “hot spots” such as the bathtub overflow get special treatment (see “Cooling the Hot Spots,” page 95).

  • Another plumbing company, which also installs HVAC equipment, says the NHQ program has allowed it to grow by 40 percent in the past three years, at the same time reducing warranty callbacks by 24 percent.
  • Some of KB Home's drywall installers have worked with builders to solve a problem with bulging that has haunted homes in the Las Vegas desert climate for years. Result: a huge reduction in callbacks, saving on cycle time.
  • But for many subcontractors, the biggest advantage to getting NHQ certified (at KB's urging) has been their ability to get liability insurance.

    “I believe a lot of our trades would not be in business were it not for their involvement in this program,” Eddie says. “They simply couldn't get liability insurance.” He explains that because KB only works with certified subcontractors, the company has been able to create an insurance “wrap” that any of their trade partners can buy into.

    Little Things Sometimes, Eddie points out, major improvements in quality require only a minor adjustment in behavior. For example, another “hot spot” pointed out by his subcontractors was flat tires on the jobsite. The reason: Framers often spill a box of nails and just leave them where they fall, preferring to open a new box instead of picking up the spilled nails. By identifying the problem, subs have greatly reduced time lost changing tires.

    Learn more about markets featured in this article: Las Vegas, NV.