As reported last week, employee productivity was the key to many builders’ success last year. The hardest-working firms’ employees had as many as 17 closings per person while still keeping overhead low. The vitality of this group is driving the industry as it sets the pace for the American economy.
Here, BUILDER talks with Don Dykstra, president of Bloomfield Homes, whose employees each brought in more than $4 million in revenue last year, making it the most productive builder of the Builder 100.
Your company ranks as one of the highest for per-employee productivity. To what do you attribute that?
High productivity is the result of an experienced team in the field who run their own neighborhoods with very little need for supervision or support from a corporate office. Our typical Project Manager (our term for builder) has built hundreds of homes and can comfortably deliver a high quality house per week. The Community Managers (our term for onsite sales) are also very experienced with at least five former Sales VPs now selling onsite for us.
Is this something you already knew?
We believe the typical public builder averages about five closings per employee. At 15 closings per employee we can pay twice as much and still be 50% more efficient.
In what other ways do you build and sell homes efficiently?
We only hold one company meeting per year instead of weekly or monthly sales / production meetings. This eliminates time away from the neighborhoods. Our sales and construction folks both office in the model home which improves communication and reduces overhead.
We like to say we parallel process in each neighborhood rather than create the potential bottlenecks of starts departments, design centers and waiting for PO’s to be available.
What are the top three reasons that you have done well over the past few years?
--Great people
--A huge land position
--Simple processes
How do you find and keep such high-performing employees?
During the downturn Bloomfield became a refuge for laid off managers (DP’s, VP’s, Directors) who truly loved home building and were rejuvenated by returning to the early days of their career in the field building and selling homes. Because our compensation system is based on the profitability of the homes in their neighborhood they can make more money in our system than as a corporate manager.
What challenges do you face?
This industry is always challenging and we are always competing with talented competitors for employees, contractors and customers. Dallas / Fort Worth has no barriers to entry and there are numerous high quality building operations.
How does the size of your company impact your efficiency?
We have always questioned the scalability of our business model, particularly if we tried to go outside the Dallas areas. As we approach 100 employees and 1,500 houses per year we continue to be more overhead efficient, but it is increasingly difficult to keep our entrepreneurial culture. Sourcing exceptional talent and adding 300 houses worth of contractors a year is an ongoing focus.
What type of customer do you build for?
Our three product lines (Elements, Classic and Artisan) are designed to meet the needs of a broad range of buyers including first time, move up, move down and multi-generational. Our homes range in price from the $200’s to $600’s with an average price of about $300,000. We build in approximately 40 locations throughout the Dallas / Fort Worth metroplex.
