HOLED UP IN APRIL OF THIS YEAR at The Stonegate, a Chicago-area conference center, the top lieutenants of Kimball Hill Homes fixated on powering—or power pointing—through a hefty list of agenda items. They call them charrettes these days—off-site meetings where key people lock themselves away from their daily responsibilities and open the sluice gates of idea-by-committee. One to three days later, they emerge, often transformed by the gravity and ambition of their collective strategies, each participant motivated to spark change in the way he or she does business.

Operating as Kimball Hill does on a September 30 fiscal cycle, the timing of its off site strategic gut check dovetailed with its perennial mid-year financial and division management review. And providing accelerated training in a classroom setting for 23 recently anointed, up-and-coming managers was a perfect way to kick off a freshly minted “Master's” program.

But, for namesake founder and CEO David Hill, this first-of-its-kind executive retreat set the stage for much more: April's strategy session was literally a defining moment for Kimball Hill, for it focused on how the company's brain trust would evolve and upon the development of a plan that might well ensure the Kimball Hill Homes name a future in a rapidly consolidating pantheon of residential construction players over the next five to 10 years.


A key element of that plan could likely involve swapping out Kimball Hill's painstakingly achieved ranking as one of the country's most important national private builders for a stature of an entirely different nature: that of one of the nation's least expansive, most modestly scaled, publicly traded home building enterprises.

Today, as one of the nation's largest private builders, Rolling Meadows, Ill.-based Kimball Hill Homes finds itself sitting on the threshold of change—perched on the cusp between “what is” and “what will be,” thinking about “what if.” At the helm is Hill, who at 63, exudes an air of regal power and still mandates a traditional suit-and-tie dress code in the company's corporate offices. Hill is leading the development of a five-year strategic plan as he searches for answers to the most complicated challenge of his illustrious career: How do you keep a company grounded in its core values while finding a way to provide for continued growth?

In the stratosphere of top 25 home builders in the United States, flirting with a billion-dollar year in revenues fetches, even from the kindest of industry observers, mere honorable mention among the couple of dozen behemoths printing cash about as fast as the presses at Fort Knox. Closing on 3,500-plus homes barely noses your company in among them, a 10th of their size in volume. And, an amorphous footprint that vaguely resembles, a Nike “swoosh” of operations—Detroit, down through Chicago, south to San Antone, and back across to Sacramento via Phoenix—hardly helps to clarify one's points of difference among residential construction's elite.

TRUE TO YOUR ROOTS For Hill, that distinction rests in the company's soul, its culture, and its identity—a differentiator he's determined to preserve. Amid the crush of cookie-cutter metrics and yardsticks that analysts and investors use to measure the pulse and performance of industry sector peers, both public and private, it's tough these days to find and hold onto a benchmark or two in one's organization that sets oneself apart from the fray of competitors, voracious suitors of all stripes, and potential partners. Not standing among the bigs must be particularly irksome for a second-generation private who in four decades never hesitated to hew to its own entrepreneurial master plan to get to its next level of magnitude and purpose, not giving much of a whit as to who else did what in the fast-shrinking world of builders.

Alas, as the Doors' Jim Morrison intones in “Light My Fire,” the “time to hesitate is through.” While all eyes seem to focus on the mythic 200-company land rush for control of the nation's dwindling supply of properties for clues as to which builders will be around and which ones will be absorbed, smart observers are attuned to another parallel dynamic that will sift away the present crowd of builders into a few handfuls of future dynasts. It's about access to money. Demographics may be expanding the universe of home buyers, but business is limiting, if not shrinking, the pool of financial channels by which a builder ensures future access to the capital it will take to do the biggest real estate deals.

So who will be the next king of the Hill? There in the rooms at the Stonegate Conference Center, strong hints—if not clear answers—emerged. The strongest hints are that, in terms of his company's future, he's leaning toward siding with public investors versus selling out to a single monolithic home builder. One might ask why.

TAPPING TALENT At least part of the answer to Hill's conundrum might lie in the fact that long-time Kimball Hill auditing consultant Ken Love joined the company June 1, as vice chairman. Love was a senior-level partner at Deloitte & Touche. His public company and management experience profile may strongly suggest which way the hill slopes.

Learn more about markets featured in this article: Chicago, IL.