Session Description. 1)Year over year Sales Changes 1/21/2016. The Woodland, O Brien & Scott Annual Homebuilding Executive Survey Looks At:
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1 Builder Top 5 Concerns & Solutions for 2016 JANUARY 20, :00 4:00 PM Presenter(s): Keith O Brien Woodland, O Brien & Scott, Charlie Scott Woodland, O Brien & Scott Will Holder Trendmaker, Houston, TX Laurence Wisdom HHHunt Homes, Richmond, VA Session Description This session will: Present the findings from the annual Woodland, O Brien & Scott Homebuilder Executive Survey. Have Builder panelists share their company profiles then discuss how they plan to address some of the survey s concerns in The Woodland, O Brien & Scott Annual Homebuilding Executive Survey Looks At: 1)Year over year Sales Changes 2) Year over year Sales Backlog Changes 3) Areas of 2015 Performance Slippage 4) Builder Top 2016 Concerns 1
2 The Good News as NAHB sees it (% shown as the % of peak) The Home Building Executive Study 30 Builders in 55 Markets Study Considerations: 1) Primarily Private Home Builders 2) As Woodland, O Brien & Scott clients the study is skewed toward Customer Centric Companies 2
3 The Home Building Executive Study 30 Builders Representing 55 Markets 87% improved by An average of +26.4% The Good News as the ES Study Indicated 2 25% Growth for Customer Centric Builders 250 Homes sold: NAHB Average vs. Customer Centric Builder 225 Customer Centric Builder 225% %
4 The Woodland, O Brien & Scott Annual Homebuilding Executive Survey Looks At: 1) Year over year Closings Changes 2) Year over year Sales Backlog Changes 3) Areas of 2015 Performance Slippage 4) Builder Top 2016 Concerns Sales Backlog: Sales Backlog: %* How could 20 Sales be up 225%, but backlog up 0 300%?
5 The Woodland, O Brien & Scott Annual Homebuilding Executive Survey Looks At: 1) Year over year Closings Changes 2) Year over year Sales Backlog Changes 3) Areas of 2015 Performance Slippage 4) Builder Top 2016 Concerns 2015 Areas of Performance Slippage Percentage of Respondents 1) Cycle Time 48% Cycle/Trade time: 5% or 9 days to 180! 2) Profit 3) Land 44% Hard costs, variances, cycle time & systems stress. 39% Affordable, supply, & slow new communities. 4) Staff 36% Turn over = 22%, capacity, hiring & training 5) Customer Sat. 32% Ratings declined another 3-5 points The Woodland, O Brien & Scott Annual Homebuilding Executive Survey Looks At: 1) Year over year Closings Changes 2) Year over year Sales Backlog Changes 3) Areas of Performance Slippage 4)Builder Top 2016 Concerns 5
6 Sales Debt! Structural Failures Oil Prices! Employee Satisfaction 2016 Areas of Top Concern Percentage of Respondents 1) Trades 65% H/C, Cycle Times, Shortages, Quality & Cost 2) Land/Lots 58% Short runway, Pricing, Lead Times 3) Employee/Staffing 4) Non-Controllable = Retention & Capacity Oil, Election & Economy 31% 31% 5) Customer Sat. 27% Weaker: Cycle times, PQ & Warranty 6
7 2016 Areas of Top Concern 1) Trades 65% 2) Land/Lots Larry Will 58% 3) Employee/Staffing 4) Non-Controllable 31% = Therapist or Charlie 31% 5) Customer Sat. Will 27% 1991 Looking back 25 years the 24 hour news cycle was born with the Iraq war. Since that time, potential buyers have been inundated with nearly constant messages of fear Spring has never been the same.. www OIL 7
8 In 1984 we struggled to buy our first investment into our futures 30 years of wonderful homeownership and enjoying the American Dream.. Unfortunately, today due to the negative news 24/7 that American Dream must be sold. January 2016 It is up the US Home Builder to combat the endless cycle of media fear and reignite the American Dream. 8
9 How do we sell it? 1)Reject Fear Mongering and the 24/7 cycle. 2)Replace customer fears with ownership benefits. 3)Sell The American Dream as a solution. 4)Have ENTHUSIAMabout America and the American Dream! 5)Start Now- by listening to these great speakers. Will Holder Trendmaker Homes Will.Holder@Trendmakerhomes.com b Customer Satisfaction 9
10 Established in 1971 Located in Houston & soon Austin Division Operations include: -Merchant Homebuilding -Merchant Land Development -Average 26 Communities #16 Houston builder by closings #8 Houston builder by revenues 150+ Employees 10
11 Customer Satisfaction =? Customer Satisfaction = Employee Pride and Satisfaction Customer Satisfaction = Fewer Issue Distractions Customer Satisfaction = Fewer Legal Expenses Customer Satisfaction = Best Marketing Ever! Happy Customers are your down market safety net! 2008 through 2011 Recession Trendmaker Sales Source: Direct Referral 30.6% Builder Reputation 24.9% Sales From Word of Mouth 59.5% Key Elements to Measure Measuring Process Performance: Organization of the Buying Process Overall Teamwork Home Delivered When Promised Accuracy of the Sales Presentation 11
12 Measuring People Performance: Communications & follow through by Sales Would you refer your sales person Communications & follow through by construction Would you refer your construction supervisor Building Company s concern for Satisfaction Measuring Quality : Quality Vs. Expectations Condition at Pre Move-in Inspection Condition of the home at move-in Cleanliness of the home Condition of Interior Painting and Wall Finish Any other item you re worried about, i.e. landscaping How to use the data: Communicate the results broadly and often! Make high scores a requisite to employment. Financially incentivize the desired results. Target items until fixed, then move on to new ones. Focus on eliminating Bad & Very Bad scores. 12
13 Customer Satisfaction Must Include: Complete cultural saturation Processes matching your organization & market Very organized customer communication Happy employees Willingness to have low stress, low legal bills, long term employees and better margins from sales where customers seek you out. Annual Starts vs. Deliveries, Houston 35,000 30,000 Starts Lot Deliveries 25,000 20,000 15,000 10,000 5, Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Speaker Contacts: Laurence Wisdom HHHunt Homes LPWisdom@hhhunthomes.com 13
14 Attract and Retain Top Talent CREATING A CULTURE of 1st Choice for Employees & Trades Top concern: attracting and retaining top talent It s a matter of choice Our employees have a choice Our trade partners employees have a choice How do we inspire them to choose us First Everyday How to attract & retain top talent consistently Strive to become: Employer of Choice Builder of Choice 1st Choice, Everyday Build your knowledge Create a culture of 1st Choice 14
15 Everyone knows. Do you? Do you know what your employees and trade partners know? A culture is: The values and practices shared by a group A home building company s culture therefore is: The shared values and practices of the company s team members A company s team members are: Everyone who serves together as a team to achieve the company s desired goals Culture can make or break a company An adaptive culture which is aligned with clear goals routinely out performs competitors - as much as a 200% difference To achieve results like this: What are your company s shared values and practices Decide what your shared values and practices should be Move everyone collaborativelytoward those desired values and practices Start with the foundation Clarity of Mission and Vision Mission -Purpose to exist Vision -How we see our destination Together Create a culture to achieve your mission and vision 15
16 HHHunt Homes: We improve lives by building excellence every day in our relationships and products Higher Purpose + High Performance = Higher Rewards Give them ownership Know what the company values are Know what is expected of them and why Know where they stand Know where the company is going and how their role contributes Tie performance coaching specifically to shared values and practices. How to recognize a culture of 1st Choice Team members are highly valued every day Team members highly value each other every day Team members practice Excellence every day Team members celebrate WINS every day 16
17 Invest in Your Team Members Personal and Professional Employee Development Annual Kickoff Meetings DISC Profile Internal Webinars EQ Training Development Plans Onboarding Checklists Education Assistance Monthly Newsletters Weekly President s Values Based Leadership Wellness Challenges Community Involvement Recognition Programs Succession Workshops Values and BP Behaviors - IP Competencies - IP Perf Mgt Process - IP Mgr/Leadership Dev Prog - IP Employee Centered - Brand Promise Communication Collaboration Continuous Education Invest in your Trade Partner s success TEAM: Together Everyone Accomplishes More Cooperative team approach Part of the company Just like an employee Respect the trades Everyone is contributing Sharing both good and bad Let trades participate in issues affecting them Encourage trade cooperation COMPLIMENTS OF: Invest in your Trade Partner s success Quarterly trade partner & crew breakfast Mission Statement Goals and objectives Review for last quarter Forecast of next quarter New initiatives Open questions and answers Establish a trade council Allows for trade input Mutually discuss initiatives and issues COMPLIMENTS OF: 17
18 What is the Value Score Card? Generally Results oriented SCM tool founded on principles of: Transparency Equity Value Objectivity Specifically Data driven vendor comparison, selection, and management tool Not about total cost instead about total value How does it work? Allocates Value to 6 factors of vendor performance Safety Service Quality Key-Relationship Capacity Cost Each factor (rated 1-10) is: Weighted by relative importance Fed by Key Performance indicators from other areas of the business 18
19 What are the benefits? Improved Value Creates Competitive environment While never being just about price Requires continual improvement vendors earn the business High level of transparency (Internal and External) What are the benefits? Improved Outcomes Drives Improvement in each of the 6 areas Provides a foundation for each decision and conversation Details the areas of improvement necessary to answer the trades most common Questions of: What do I need to do to earn more work Everyone Matters Invest in yourself accelerate professional growth Invest yourself in your team accelerate professional growth You don t build great companies, You build great people, People build great companies. -Zig Zigler 19
20 Speaker Contacts: Charlie Scott Woodland, O Brien & Scott CharlieS@Woodlandobrien.com Will Holder Trendmaker Homes Will.Holder@Trendmakerhomes.com Laurence Wisdom HHHunt Homes Lwisdom@HHHunthomes.com Please complete the program evaluations! 20
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