Every Jobsite a Stage

Getting the subs on board is a bit tougher. Of course, subs will be more willing to make changes for a builder that gives them a lot of work—but even then, convincing them that it's in their best interest is always an uphill battle. “It's one of those things you have to carefully negotiate face to face,” says Ellis, adding that the process happens incrementally and always takes time.

One thing Ellis has going for him is that the attention to detail he is advocating is not new; it has already proved its worth among the commercial builders he has worked with. “On commercial projects, general contractors tend to be more involved in the details of the build, and that has resulted in a better understanding of costs, in my opinion,” he says. His goal is to help residential builders gain the same level of understanding and reap the same rewards.

In fact, he believes that home builders stand to gain even more from this work. In a commercial operation, each project is different, so it's difficult to duplicate cost savings from project to project. Home builders, on the other hand, tend to build the same basic designs again and again.

“[Residential] builders have tended to be a little less formal in their operations, but the potential is there to get a lot more economies of scale than you can in commercial construction,” Ellis says. Getting those economies of scale will require that a builder create management processes to introduce new ways of working to its various divisions. Once builders do this, they're ready for the real work.

Ultimately, one of the most important ways a builder can protect its margins is by making customers happy. In customers' minds, one big builder's home looks pretty much like another's, so whether or not they come back to that builder for their next home, or refer their friends, will depend a lot on what kind of service they get, and at what cost. The goal should be to have as much control over the customer experience as a stage crew has over what the audience sees.

Builders who can forge closer ties with their business partners will find themselves in a much better position to gain such control. Ellis says that for most builders, getting there will take years. But that gives consultants such as him plenty to do.

Charles Wardell is a freelance writer based in Vineyard Haven, Mass.

CLARK ELLIS

Principal of Management Consulting, FMI

Raleigh, N.C. cellis@fminet.com