As we finish up this March/April print edition of BIG BUILDER, a world outside of home building concatenates profound, seemingly chain-reactive transformations—shatteringly new political, cultural, and economic forces and directions that sweep housing and its divisible industry parts into a tidal wave of moment.
On a map, North Africa and the Middle East may look like a world apart, but in life they are as intimately part of the here and the now as any feature of quotidian living that comes to us by way of our fossil-fuel economy can be.
As we write, of course, we're not privileged to know what the ultimate reset off leaderships will be for Tunisia, Egypt, Bahrain, Libya,, Morocco, and any number off other sovereignties shifting in the tides of change. We know only that in our Western way of life and climes, we'll deeply feel and immediately see what develops, for that is how geopolitical dramas unfold nowadays. We hold speed-of-sound news of revolution in the very palms of our hands.
Like it or not, history has picked this time and this place to occur. We don't get a lot of choices as to what's going to happen; all we really get to choose is the attitude with which we experience it.
Volume home builders who trudge determinedly forward into the months that in some distant fantastical past—five or six years ago—earned them the label, spring selling season, can relate. They too have felt the ground beneath them buckle. They too have awoken to the slap of reckoning that their legacy—however noble, powerful, and entrenched—is now in many ways their most lethal enemy.
Four years into and hopefully 12 or so months out of a hell that has literally lopped off 80 percent or so of the livelihood of an industry, we'd be so bold as to say this: If you can't start with a blank sheet of paper and reinvent your company today from scratch, knowing all that you know about current conditions and future head-winds, the likelihood is that your organization will fall into the category of excess capacity in the tough months ahead.
This explains, at least in part, why we're focusing on Atlanta-based Ashton Woods to run metaphoric interference for all of those organizations in home building—public and private—that are capable and willing to make a go of it for this last stretch of darkest hours before the dawn of a rebound. To succeed, it's going to take not just cash, not just patience to await an eventual rising tide, but an out-and-out skill at dealing well with what the market offers in little doses. This means “deals with lots of hair on them” that require more than throwing money at the challenges.
This is one of the reasons Ashton Woods could justify its existence starting with that blank sheet of paper in the gloomy days of late 2009, as it created its plan to multiply itself by five within five years.
Central casting for Ashton Woods had to pick its leaders with care, and has done so. With a current run rate of about 1,200 homes and just more than the $300 million mark in revenues, the masterminds at majority owners Toronto-based Great Gulf Group are fond of an Ashton Woods senior management that allows for exactly 17 corporate positions in the company's Roswell, Ga., headquarters.
That rounds out to about 70 homes and $18 million in revenue per corporate overhead position, so it helps that the CEO has more experience with leadership and responsibility than his 40 years would seem to suggest.
Jerry Patava, CEO of the Great Gulf Group, says, “When someone's handled significant responsibility without having significant years of legacy issues clouding the picture, usually that person proves to be talented beyond his years. That's what we're finding with Ken Balogh.”