Worldwide investors seem to like what Federal Reserve chair Janet Yellen had to say yesterday about the course of U.S. interest rates. So, too, most home builders might be breathing a sigh of relief at this re-, re-, reaffirmation of monetary policy caution.
There's not enough to gain and way too much risk in raising the cost of borrowing money, especially at at time dark, inertial global forces are playing with worldwide demand for resources, goods, and services.
Out there in Fed land, Yellen notes that the United States economy, by itself, has been "remarkably resilient." That's all good. But, if any part of the the term "remarkably" infers "inexplicably" or "tenuously," there may be reason to worry, particularly in context. Wall Street Journal staffers David Harrison and Michael S. Derby write:
“Given the risks to the outlook, I consider it appropriate for the committee to proceed cautiously in adjusting policy,” Ms. Yellen said Tuesday before the Economic Club of New York. She didn’t give details about the timing of the next rate increase. Fed policy makers are set to meet next April 26-27.
So, at least on some level, the pressure's off for Spring Selling time, from an "externals" standpoint.
Which leads to this. Given that interest rates as a variable that impacts your business may likely be neutral, what do you expect of your business's performance in the near term? Sales, profitability, access to needed capital, labor, and lot resources?
How strong or weak are your company's practices? If operational excellence breaks down to a series of business areas and work streams that matter most to your ability to create value for the stakeholders in your organization (you), what would you name as those business areas and work streams that you can seize on an opportunity for improvement?
We're hearing observers in the market talk about how one or more companies in the same geographical market arena are creating a gap between themselves and others on pretax net profit.
The question becomes, what operating expertise or excellence sets one company apart from another in the same relative geography with similar land position strategies? Is it more about SG&A efficiency, or more about an efficient building process, lower hard costs, more simple plans, or what? Where do "best practices" builders focus in this area and what changes have they made?
Importantly, too, when you've got a "best practice," can it become a sacred cow, or do you have to keep diving into your practices, remove the "best" qualification from them, and look constantly for improvement to each and every one of them? Best practices enable us to meet our goals and obligations in business today, but could they be impeding us from meeting them tomorrow?
These are some of the areas we'll be focusing on at our upcoming Housing Leadership Summit, May 16-18, at the Ritz Carlton, Laguna Niguel, in Dana Point, Calif.
Among the key topics for focus:
- Now to 2020 … where will new land value lie, and why?
- Succession … a young leader’s view of volume home building’s big challenges
- Information asymmetry … how to evaluate and value labor and productivity
- Data … how to re-engineer workflows, actions, and outcomes—including identifying, acquiring, and retaining customers--by using data
- Personalization … mapping decisions and outcomes to be both nimble and scalable
- Future-proofing … how organizations use both good times and adversity to grow stronger at sustaining access to smart, committed people, valuable land, data, and money.
Our two-and-a-half day event will be equal-parts high-level conversation, hands-on demonstration, and all-out fun. We've got Ivy Zelman, construction trends guru Barry LePatner, leadership sage Tom Flick, and Millennial culture expert Sarah Milby headlining a bill that most importantly includes your peers, friends, colleagues and potential business partners. What’s more, our Metrostudy team, will once again join with us in every aspect of the program plan and experience to ensure we elevate the conversation in every topic area.
I'd love to see you there.