Beyond demand for what home building businesses do, toward need for what they could do. There’s new opportunity there.

Peter Arkle

For a home builder in 2019, the questions, “who are you?” and “who do you want to be?” are relevant and compelling. Now. In three hours. Tomorrow morning when you awaken. Constantly. Perpetually.

Before you dismiss the two questions as needless, or the answers obvious, bear with me. After an eye-roll, a home builder’s response may be, “I [or we] build houses and sell them.” To which we’d say, “good luck with that.”

Yes, people–of all ages, household types, income brackets, geographies, and occupations–need houses, and they need them now, and they always will, so “building houses and selling them” may look like a boundless opportunity to convert need into a sustainably profitable enterprise.

And yes, society–in all its facets and jurisdictions: neighborhood, community, rural, metropolitan urban, regional, and national–needs the multiple benefits and values housing investment, development, and construction contributes to its economies in the form of both homes and jobs producing them and consumption behavior related to each.

Yet, in this day and age, these needs and this demand–albeit growing, constant, and perpetual–don’t guarantee viability as a home building going concern because too many other conditions–many of them adverse–play too important a role.

We talk and write about those conditions often. The difficulty and expense and risk of financing a home site. The political indifference, or worse, opposition, to developing new housing stock. The unpredictability and cost pressure around securing and orchestrating 25 or so skilled trade partners to do their part. The wide, erratic price variability of materials and products–due either to seasonal ebb-and-flow dynamics of supply, capacity-constraint, and demand, or, of late, to global trade dislocation, uncertainty.

And then, two conditions that are shifting even faster and more existentially. Consumers, and what they need, want, demand, and act on is one. Second, and co-equal in importance, your next generation of talented, human leaders-to-be.

Think of them for a moment. Picture some of their faces and names and early-career lives in your mind. You’ve gotten to know them. They sound, in many ways, like your children, like our children, and that’s because they are. What does he or she need, want, demand, and act on that will make her or him or them a valued and invaluable leader-to-be in your organization?

Isn’t that one of the more pressing challenges for any home builder in 2019, along with this moving-target consumer, whose demographic genome seems today to be solving for a brave new road-map of housing preferences, attitudes, wherewithal, and choice?

The most pressing challenges have to do with the fact that we think we know what the challenges are. We think they’re about capacity and supply constraint–lots, labor, and lending–and their impact on building and selling houses.

What if they’re not the biggest challenges? You can only begin to know that if you ask–and answer–the questions “who are you?” and “who do you want to be?”

Think of these huge, roiling, issues, capable of altering not just housing cycles, but entire macro economic force fields, business sectors, even cultures: 

  • Privacy and security
  • Well-being
  • Superbugs
  • 100-year-life-spans

Like it or not, if you’re in new home construction, development, investment, materials supply, etc. you’re in business to address and solve for these issues, sooner than later. Apropos of the two questions, here’s a thought from real-life, real-world home building we think may add to the conversation.

“We started a new company,” says Pat Hamill, president and CEO of Denver-based Oakwood Homes, one of eight home building companies owned and operated by Berkshire Hathaway division Clayton Homes. “It’s called Shazam! By the end of April all of our new homes in the Denver division will be included in the Shazam roll-out.”

Shazam–a start-up operation of a quintessential home builder developer–is neither about building or selling homes.

“We took a look at the customer care data we typically spend $6 million a year to acquire and make meaningful to our new home buyers. Our 11th month customer surveys, frankly, [insert expletive here],” says Hamill. “Our Shazam program is like a home services network of local providers, a handyman service on steroids that we now give to new home customers for one year. That takes care of warranty issues, normal maintenance, seasonal adjustments, etc., and we’re going to try to build lifetime customers among our buyers. Even hanging a picture or installing blinds or a ceiling fan is now wrapped in.”

Service and experience–extending now to well-before a customer engages in the home-buying journey and well-after the moment he, she, they take the keys to the door–are the emerging new heights of the bar of baseline expectations for home buying customers.

The answer–paraphrased of course–to question number one for Pat Hamill and his Oakwood Homes team, and the whole network of 16,000 Clayton Homes team members, is “we are about giving our American customers a world-class experience of homeownership.” And taking a page out of Japanese business management, which makes a verb of kaizen, meaning, to continuously improve, the answer to the second question, “who do we want to be?” would be “the very best in the business at giving customers a world-class experience of homeownership.”

At Clayton, it’s a mantra, “try a lot of things, keep what works.” Shazam looks like a keeper.