I asked a friend from residential construction's trenches to say what goes on mostly in the minds of home builders.
He didn't hesitate with his response. It should be said that, by character, he's an analytical type. The question, for him, surfaced two distinct skills. These two proficiencies preoccupy builders, or rather, builders obsess about being especially competent in two areas.
Risk managers, he said first. Home builders must carefully and constantly look at costs--in money, time, talent, political will, etc.--in balance with the potential payback or revenue streams. Every project--were money no object--could go better than it does. But money is precisely the object.
From the far-upfront investments to the pre-development carrying costs through the construction cycle, and right through the ownership cycle of the home, risks are part of the DNA of every home in every community their entire timeline. In this continuum, a builder--whether or not he or she wants to--faces having to match means with ends in a way that both creates economic value for the builders and offers values of varying kinds to home buyers. The difficulty of achieving consistent success at that match-up is as varied as the very ground under each and every home.
So, it's understandable that managing risks well would constantly be on the mind of builders--whether they're contractors, supervisors, or corporate-level business executives.
The second skill my friend says is always on the minds of builders is marketing.
If risk management is about working through cost challenges, marketing skills are about creating separation from that cost base. That separation, or delta, is where a builder, a firm, or a multi-market enterprise can make a good living in the new home and community building business.
Marketing zeroes in on consumer needs and gives people help in assigning financial value to the fulfillment of those needs.
Hardly anyone speaks more clearly about marketing and how it works than Seth Godin. He writes here:
The first step is to invent a thing worth making, a story worth telling, a contribution worth talking about.
The second step is to design and build it in a way that people will actually benefit from and care about.
The third one is the one everyone gets all excited about. This is the step where you tell the story to the right people in the right way.
The last step is so often overlooked: .... [check out Seth's post to see this one].
Godin's first step is all about "worth." For many, a new home says something not only about what they want but who they are. For many, a new home is not only a consumer good, but a program of services and experiences. That "worth" makes a price tag--and preferably a gross profit margin--a rational quantity in the mind of the buyer.
Risk management maps to costs. Marketing maps to how much above costs people will pay for what they value. And both of these preoccupations, these skill-sets, can not happen without trust. Reliability and good-faith about both risk and ultimate value are go-forward necessities. Business discontinues without them.
So, here on a late-Summer of 2016 morning, we take a moment to tip our hats to those we work with, as associates, company mates, partners, investors, etc., whom we've grown to trust. That gift fulfills a human need as well, and that gift is alive and well in many places we turn to explore in home building and residential development.