One of home building's over-achievers during the past few years, John Laing Homes CEO Larry Webb likes to say, “Our company doesn't build units, we put families in homes.” On paper, the statement might come across with a slight ring of triteness, and certainly cynicism, since he says it at least partly to differentiate his firm from the “big bad publics.” Still, coming as it does from a guy who leads an enterprise, where each of the 1,000 people who worked there, accounted for $1.65 million in 2005 revenues, and where each “associate” had a hand in putting 2.9 families in homes during 2005, the assertion proves to be anything but trite. It's eating, sleeping, breathing belief in a mission, and communicating it forcefully.
Marketing is what it is, and its tools and techniques are as important to production home building's organizations as hammers, nails, and lots. For many home builders, marketing is hardly a dimension to latch onto and adopt, so much as it is an essential part of a company's nature. You can't have a new home building business unless you have new home buying customers. The more times you want to iterate the business model, the more demand you need to create for new homes.
Good homes and good home buying experiences are, quite logically, the basics of a business that has grown into the $250 billion big builder sector, representing about two out of every five new homes sold in the country. The basics are what many companies feel they need to turn to and focus on to ride out tough market economies. One of the challenges that sets home building enterprises apart from many other industries that experience irregular but steep cycles is generational.
For builders and building executives over the age of 50, “the basics” almost unavoidably means something quite different in home building economics, operations, and strategies than the term means to their counterparts who are in their late 20s or early 30s. Focusing on the basics may mean the difference between thriving in today's tougher environment, or oblivion tomorrow.
But imagine how hard it must be for organizations that were assembled to achieve velocity to morph suddenly into organizations that emphasize precision, prospecting, and efficiency. Imagine the communications and power struggles that must be going on now, as older executives try to play the “déjà vu card” to their advantage in a darkening climate, as younger ones flex their “times have changed” muscle.
So, Larry Webb's claim about “putting families in homes” is perhaps less important as an external marketing message about his company, and more telling as a credo for each of those 1,000 John Laing Homes employees who helped generate $1.65 million apiece last year.
Likewise, the marketing phenomenon of Generations X and Y, which together represent more than 125 million people who will create the biggest potential demand for new homes for 25 or more years to come, may at this moment be actually less relevant to home builders than their own internal demographic challenges: age and gender.
The age gap is one that could inflict a lot of pain on home building companies as they attempt to confront choices about everything from headcount, to compensation, to resource allocation, to product development, to operations during a protracted downturn.
If 50-year-old guys are the ones in the positions to decide how an organization “rightsizes” for a drought (as they've been through it all before), how many of the prized young turks that helped those companies reach new heights will remain in the mix?
The gender gap—the fact that so many home building companies are still so essentially male in their make up—may be more costly. Young women have eclipsed young men in educational achievement for almost a decade now. Educational attainment is the single most important pre-indicator of earning power. Earning power translates into decision making about big ticket items, such as new homes.