Home builder to home builder, whether it's your job pouring slabs, or on one of the finishing trade crews, supervising a subdivision, or running the p&l on a community, one of the most meaningful words in the business is integrity.
Integrity is the term used to go along with the expression, "a man of his word." Trustworthy. Straight. Courageous in his convictions. Loyal in his values. A person of character.
In October 2009, as I was preparing a cover story for BIG BUILDER on the $1.4 billion Pulte stock acquisition of Centex, I spent time with ceo Richard Dugas. I noted that Richard grew up in a "speck of a place" in the West Baton Rouge, La. parish, called Brusly, right on the Mississippi. He put himself through Louisiana State University by working at his dad Richard Sr.'s hunting, fishing and sporting goods store.
At the time, just a few months after the Pulte Centex deal, the timing and the strategy of the combination was already taking on water. The market was unforgiving, and this deal's structure, complexity, and logic--subsuming an iconic home building name plate, Centex, taking on debt, and integrating apples and oranges cultures--needed lots and lots of forgiveness. That forgiveness never really came, but Pulte, most analysts and observers would say, became the better for it.
Richard Dugas spoke then of criticism, of pain, of his own unpopularity this way. He said, "what our team of employees and our shareholders want is to win, and that's what we're working to do. When we win, they're going to feel it, and they're going to be happy."
I spoke, then, as well, to Pulte Homes founder Bill Pulte about Richard Dugas. Here's what I wrote then, in November 2009:
What struck Bill Pulte—who started his eponymous company at age 18 in 1950—about the process re-engineering expert [Dugas] when they met in September 1994 was that the then-29-year-old Dugas was “someone with high integrity, high intelligence, and someone worth keeping an eye on.” Pulte did just that. Dugas “moved quickly through the ranks because he would win discussions by using facts, not just words, to back up his points of view.”
Integrity was Bill Pulte's word for Dugas, a man, even then, he showed no clear affection for but chose, in a home builder's vernacular, one of the highest terms of respect and admiration to describe Dugas.
But times change.
The Pulte family now questions Richard Dugas' character and his strategic leadership of the enterprise that carries their Pulte family name.
As recently as the middle of March, founder Bill Pulte called Richard Dugas and asked to come into PulteGroup's new Atlanta headquarters office for a one to one meeting to discuss the company's strategic performance and direction.
The response Bill got was that a meeting could take place, but not at PulteGroup headquarters. Instead, it was scheduled to be at a hotel.
It was at that moment, that the Pulte family's view of Richard Dugas' character became cemented, according to grandson Bill Pulte, who added that the Pulte family had seen the senseless termination of hundreds of Pulte employees with the original headquarters shutdown, but now, Richard Dugas wouldn't have the founder and largest shareholder meet with him in the corporate headquarters."
Grandson Bill said that Richard Dugas called Bill Pulte's Naples home back and said that he would prefer to meet at the hotel or somewhere else, away from the home office. Grandson Bill asks these two questions.
- "Why wouldn't the CEO be willing to invite his largest shareholder and the founder of the company into the main headquarters?"
- "Why would Richard not welcome to the main office the very guy who made him CEO of the whole company?"
A logical answer to those questions may be this. If the normal course of exchange between founder Bill Pulte and the company is highly collegial and friendly, and suddenly there is a call asking for a meeting, it might give management pause. Knowing that Bill Pulte is highly recognizable, and that he may not be entirely happy about something might cause me--if I were the ceo--to say, with all due respect, "let's take this outside," the office. I, of course, am not ceo of anything, but I would not necessarily mean anyone disrespect to recommend such a meeting be held off the premises.
The real point is this: who owns the Pulte brand name right now? Is it a corporate entity operating under the PulteGroup banner? Is it the family who gave life, viability, and a trust-mark to the business in the first place? Is it the shareholders, as Milton Friedman would have asserted? Or, perhaps, it's actually the customers who own Pulte and all that it means, and all that it's worth today and tomorrow.