Warhorse Bill vs. young son-uv-a-gun Sean. Wiley, ageless wonder Tom vs. "who-is-this-guy?" phenom Jared. Gronk's hands vs. Gurley's legs. The firm of Mason, Thuney, and Andrews vs. the take-no-prisoner super-defenders Donald and Suh.
You're a Monday morning quarterback, like me, eh? Literally, thinking of nothing so much as SWOT on another Super Sunday pre-selling season extravaganza.
Magical match-ups like yesterday's--of six-peats vs. no-peats, of dynastic powers vs. insurgent disruptors, of east vs. west, of canny old masters vs. whippersnappers who're still discovering their own brilliance--are a rare occurrence.
It's only a game, but then if it's only a game, how can it have taken on such mythic proportions in the minds of so many? Heuristically, at least in the minds and hearts of those of us who've been around longer than Super Bowls themselves, the tendency is to conflate the game with The Game.
So, let's go with that a little bit, at the risk of marginalizing a good percentage of the BUILDER audience that has little to no interest in pro sports, the NFL, or even the one-day blast of entertainment pageantry and pomp of the Super Bowl.
This game, and its epic promise--if not its historically low score--owed a great deal to legendary San Francisco 49ers head coach Bill Walsh for its ever-soaring pitch of excitement in anticipation. The changes that coach Walsh, his remapping of the brain chemistry of his football team,the West Coast Offense, and the ninja skills of Joe Montana and Jerry Rice each brought to the field, not only brought "the flats" into play, but electrified the game to where Super Bowl LIII's battle between the Patriots and the Rams is a turbocharged case-study in turning SWOT inside out.
A word about SWOT.
One of business strategic planning's more enduring tools, it's an acronym--strengths, weaknesses, opportunities, threats--whose origin is sketchy and subject to debate. Wikipedia credits Stanford University academic Albert Humphrey with at least having elevated the organizational self-analysis technique. Suffice to say, few would argue the mnemonic's power to stay relevant and helpful. SWOT's shortcomings as a strategic tool are also well-known and well-taken, especially for a business like home building and residential development, where illusion and self-deception are common fatal flaws among key stakeholders.
"One of the main criticisms [of SWOT analysis] is that, in the end, such an analysis invariably relies on subjective judgments. Objective measures of all the ingredients in the balance simply do not exist. Some say that this does not matter, because the process of doing the analysis is more important and revealing than the results of the analysis themselves. The journey is more important than the destination."
For head coaches Bill Belichick and Sean McVay, the raw materials of SWOT could only go so far to mentally and emotionally prepare their teams for the game at Atlanta's Mercedes-Benz Stadium. After that, especially when the inevitable un-predicted [which is not to say unpredictable] event or force or ref's call or injury or any other of a million variables arose, it came down to grit, and grinding, and discipline, and leadership.
It's the same for builders, their teams of associates and partners, and their leaders. This stretch will be a grind.
With all the data available, and all the benchmarks, the KPIs, the granular submarket trends, the scoring cards, and the math models in the world to filter, sort, make sense of, and act on, builders, developers, building products manufacturers, distributors, and the lenders and investors with stakes in all of them can add them all up and learn a lot from them, but not everything they need to know.
In the immediate weeks, the months, and the years ahead, to repeat the above, for emphasis, "the process of doing the analysis is more important and revealing than the results of the analyses themselves. The journey is more important than the destination."
While you're at it though, try to think about opportunities and threats differently.
In other words, instead of paying strict attention to the inning and the cycle, try to learn, understand, and adjust to more structural, cross-cyclical issues that could impact your business, not just in the long term but in the near- and mid-term circumstances of a cyclical slow-down.
The big opportunity--especially with the kinds of data available and the relative ease and low-expense of capturing that data--is to, er, change everything. Almost like Bill Walsh did with the San Francisco 49ers. What his team was failing, miserably and seemingly perpetually, to do from the standpoint of goal-line to goal-line, marching in bruising fashion with a running game up the middle, he realized was an opportunity. He spread players out, from sideline to sideline, and made up in speed, visual decoy, and variability what he could never have done with sheer strength.
Home builders can, similarly, turn weakness into opportunity. Can turn a threat into a strength. Even smaller builders.
Weakness might in this case be reflected in capital constraint--the expense, level of effort necessary, and personal liability of accessing more money to buy and perhaps, develop, land.
Threats include macro economic forces--increasing pressure on interest rates, and the triple-threat of lots-labor-and-lending expense increases, squeezing margins. And they include competitive stress--from other builders lowering price, from resales, and from rentals.
What if, like Bill Walsh, builders begin to look not only for downfield gains, but start looking from sideline to sideline, to change the rules of engagement by expanding the breadth and width of the field of play?
Instead of looking at single-family-for-rent as an interruption in a home buyer's path to purchasing a new home, you might look at it--as they do, increasingly--as an opportunity to create a relationship with a household who could be a life-long customer.
You don't need to wait until an individual or a couple is consciously pursuing a new home in a new-home community to start what it takes to become valuable to that prospective customer. What if it's somebody searching for resources in a community to fix something that broke at home, or connections to a local parent support group, or insight on where to find entertainment, or any other local experience? Who's to say you can't crop up and offer value to them at that time, when they're decidedly not--or may not think they are--in the market for a new home?
Fact is, single-family-for-rent, and its fast emerging sub-segment of new single-family-for-rent communities, is a way for single-family builders to begin to recognize an opportunity within a potential threat.
Same goes for builders who may begin to look at the subdivisions and neighborhoods and master plans they helped build within the past 20 years or so as a strength, not a threat.
Many of those homes in those neighborhoods and subdivisions and projects need remodeling and renovation, to accommodate aging households, the need for flexible use and revenue units, healthier and higher-performing buildings, etc.
Then, instead of seeing Airbnb as a potential competitive threat, it could be that a builder could gain a deeply-capitalized partner in providing ongoing remodeling and renovation services for homes nobody knows better than the original builder.
It's all about how you first secure and then potentially retain a valued relationship with customers as only you can--connecting them with well-being, prosperity, and happiness in all of their varied living formats.
Forget what inning we're in. We're entering a moment where the cycle and structural practices in home building are either about to collide or converge to form new strategic and operational models.
Don't fixate on the cycle to the exclusion of what needs to evolve and transform fundamentally in your business, including who you are and what you do. Your customers will always need housing. True. But we can not pretend to know what forms, formats, ownership models, community models, and other frameworks will shape what that means as artificial intelligence, aging, and other natural changes occur in the next 10 years or less.
Consider SWOT as a journey. And try to involve perspectives from outside your belief system to way in on each of the four areas, so that you'll get more than a subjective view of each.