CENTEXCORP. IS GOING THROUGH WHAT its CEO, Tim Eller, calls a “transition year” in 2006, in which the Dallas-based builder is moving forward with a flatter operational management structure that Eller believes will be a key element in his company's future growth and profitability.
Now that Centex has spun off or divested several ancillary businesses, including the March 6 sale of Centex Home Equity Co., says Eller, the company has evolved from a holding company into an operational one that focuses exclusively on home building. However, its 27 operating divisions had grown to the size of Fortune 1,000 businesses. Therefore, Centex saw fit to reorganize its home building operations for the first time in seven years to make them more responsive to the neighborhoods they serve.
During the first three months of 2006, Centex doubled its regions to 12 and pushed down what had been regional support services into its divisions “and closer to the point of customer contact,” says company spokesman Ken Smalling. Centex also consolidated its corporate resources—including sales, construction services, land acquisition, and purchasing—under a new operations support team led by Andy Kerner, who had been Centex Homes' CFO.
Centex now consists of two home building operations, East and West. Andrew Hannigan, who had been president and CEO of Centex Homes, is now co-president and COO for Centex Homes in the Eastern United States, based in Lake Mary, Fla.; David Barclay, who had been executive vice president of Centex's 11-division West Coast region, oversees the Western United States from his base in San Ramon, Calif.
Eller explains that the “beauty” of this new management arrangement is that it leaves Centex's divisions intact and stronger, a claim that Richard Douglas, president of Centex's San Diego division, corroborates. “The reorganization makes total sense. It's all about focused management and focused energy,” he says.
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