For Florida-centric Holiday Builders, the difference in the marketplace today versus two years ago sheds light on essentially who the company is and what it does. "We got to be convinced we were a transactions business, but we're not," says CEO Kim Shelpman. "We're a relationships business." That changes the equation everywhere in the business – with home buyers, with subcontractors and materials suppliers, and among employed associates – from a simple exchange of goods for currency, to creating trust and value over a sustained period of time. Change is what Meritage Homes' chairman and CEO Steve Hilton is talking about throughout his top 15-ranked multi-regional home building organization as well. "To have hope is my message, but at the same time that means digging down deeper, especially competitively," says Hilton. "That means doing what it takes to find the market. I can't manufacture demand, but I can compete and get my share of the market, and that's what I'm emphasizing with my folks – they have to compete to win," Hilton says.
Transformation has been on KB Home CEO Jeff Mezger's mind as well. At the operational level of the Top 5-ranked Los Angeles-based home building company, inspired leadership needs to find "a new scorecard" to measure performance and set the bar of ambition at a high-enough, but reachable level, according to Mezger. "At the divisional level, performance a couple of years ago was all about profits, with growth driving the bottom line," says Mezger. "Now we have to find ways to reward talent based on their ability to manage the balance sheet, watch expenses, and capture cash flow opportunity where we can."
Among the most important measures for both middle management and senior strategists at home building companies will be customer satisfaction scores. Although the industry is known to hold J.D. Power scores in somewhat of a contentious regard, the ratings serve as the industry's standard currency as a measurable reflection of customer care practices. When customer satisfaction impacts not only warranty liabilities among current new homeowners, but represents an important part of keeping prospective buyers from cancelling their orders, stakeholders will be keeping a close watch on management's performance in this area of operations.
The three company CEOs, representing more than $11 billion in annual home building revenues among 20 states, will address ways they've changed their respective enterprises to navigate the worst housing downturn in recent memory in the kickoff "power panel" session from 5 p.m. to 6 p.m. on Tuesday, November 27, at the Mandalay Bay Resort and Casino, Las Vegas. Their respective strategies and tactics to generate cash, shore up their balance sheets, and position their companies for an advantage as recovery emerges on the horizon, will be the focus of a round-table conversation, officially opening the fifth annual Big Builder conference, whose audience for the first time will include attendees of the J.P. Morgan Homebuilding/Building Products conference and investor forum co-located with Big Builder's event.
Moderated by award-winning business journalist Dan Akst, the CEO panel will touch on the industry's current challenges and dynamics, and look ahead to the 2008 landscape at market conditions, operational tactics, and recovery strategies.