Talk about prescience. Ashton Woods was a back-from-the-brink private builder that gut-checked its way from rise to fall to resurrection in the space of a couple of years during the Great Recession, concluding that a then-39-year-old Centex overachiever could leverage his public pedigree to rebuild a private powerhouse.
Roswell, Ga.-based Ashton's major shareholder Great Gulf Group of Toronto kept the capital spigot open during the company's darkest hour, in part because of a bold, zero-based "let's act like a start-up" five-year plan, and initial 12-person brain-trust assembled by said 39-year old CEO. Great Gulf ceo Jerry Patava said at the time:
"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."
That Patava was right was less a surprise than that the bold five-year plan Balogh and his lean, mean brain-trust proposed to him--that Ashton Woods could grow five times in five years, organically, and profitably, starting in 2010, was pretty damned closed to being right.
I got to spend some time recently with many of the lean, mean corporate team I'd met with five years ago, this time in the Naples, Fla., market on the eve of "the season," when this part of Florida turns into a tropical version of Long Island's Hamptons in August. CEO Ken Balogh, cfo Cory Boydston, Thad DiGiuro, senior vp, land acquisition & strategy, Ralph Farrell, vp, operations, Jay Kallos, vp of architecture, head of design Valerio Muraro, Karin Shaban, vp of human resources, John Reny, Florida president, and a couple of others of this strong team spent time, looking forward, and looking back for a moment at the distances traveled, accomplishments, and challenges ahead.
We stopped in to have a look at two of Ashton's Naples neighborhoods, the higher-end Fiddler's Creek, and the move-up level recently launched Naples Reserve Egret Landing, whose developers practically begged Ashton to come into. As well, we took in the satellite version of Ashton's brilliant high-end retail experience in the Naples Design Studio.
The headline here may be that Ashton Woods will generate $1 billion in revenue for the first time in its history, but the real story goes back to the dark days of 2009 and 2010, when its leaders took to a "blank sheet of paper," to justify its existence, pencil a model, road-map a way forward, and unify around a new mission. What we wrote back in March 2011 was this:
Equal parts business model and belief system, Ashton Woods has shaped itself into home building's version of the Bionic Man—public company pedigree on a private company budget, value system, and DIY-corporate culture.
The accomplishment to date, 4x growth in five years, stems, we think, from a holistic strategy, superficially orbiting traditional disciplines like a land-light strategy strictly guided by 24-month sell-through horizons no matter what the size of the parcel, a design and architecture-driven product differentiation program, an exceptional service-centric nimbleness that allows operating units to respond with headquarters blessing to customers' local desires and needs without disrupting manufacturing cycles and cost models, and a best-of-breed de novo organic growth discipline, which adds new market opportunities based on land acquisition and operational scoping rather than needing to acquire assets via entity purchases.
More profoundly, though, the identity and culture of Ashton Woods are together, about being an outlier. Operations, planning, execution, responsiveness, and discipline all seem to flow through three key principles:
- Trust
- Passion
- Fearlessness
Over the next week or so, we'll look more telescopically at how the company put design and architecture at the center of its five-year strategy for growth, leveraging trusted relationships, reliability, and execution to become what few companies in the space can claim to be: a high-volume, scaled, semi-custom home builder that can make a profit on every home built, and still delight its customers with bold, distinctive, ground-breaking design. Stay tuned.
