Smart entrepreneurs are always on the lookout for ways to improve their businesses, and there’s plenty of grist for the mill out there. The business press, popular management books, and seminars by management gurus are constantly touting companies whose practices they deem exemplary. So when we asked custom builders what firms outside the construction industry they draw lessons from, we expected to hear some familiar names. And we did: FedEx, Disney, Nordstrom, Ritz-Carlton. What we did not expect was the subtlety and diversity of lessons they bring home from these heavy hitters, or the variety of other businesses—large and small, successful and otherwise—that have custom builders taking notes.
“The one that we feel is the most inspirational is Walt Disney,” says Alan Banks, a custom builder in Charlotte, N.C. Banks marvels at “the whole Disney World experience. When you get off a ride at Disney World, it’s no coincidence that there’s a Coke stand waiting for you. And if storm clouds appear, magically they have the umbrella vendor appear.” Handled less expertly, such a controlled environment might seem crassly commercial and manipulative, but Disney avoids giving that impression. “It’s so well thought out,” Banks says. “They charge a lot for everything, and you’re happy to pay it.” Back at work, Banks and his partner, Chris Folk, try to emulate Disney’s thoroughness and foresight. “We deliver the house, but how are we going to deliver the experience around the house?” Banks asks. The question has become something of a mantra at the company: “Is that a Disney-like experience? Because all of us have been there and been wowed by what they think of.”
But while a Disney-like experience is the goal, Banks and Folk are more than happy to fill in the details with ideas gleaned from other sources, some of them surprisingly humble. “The best idea we had came from a retail environment,” Banks says. When conducting homeowner orientations on newly finished houses, Banks had the sense that his clients were not absorbing all of the information he was giving them. He found a solution hanging on a clothing store rack. “This coat had about a half a dozen labels on it,” says Banks, who now carries a pocketful of cardboard labels with him on orientation tours. He fills one out for any maintenance item he thinks the client might need help remembering, “Everything regarding the safety of the house, like a gas shutoff, or something that the clients wouldn’t recognize. We actually have the homeowner put the labels on. It makes the homeowner orientation a more interactive experience.”
Solana Beach, Calif., custom builder Terry Wardell also draws lessons from the retail sector and trades them with his employees, but not every store makes the grade. “The only company we have ever referred to a lot is Nordstrom,” Wardell says. Not only is the company a favorite with business consultants—“You hear the name Nordstrom in three out of four management seminars,” Wardell says—but it is also available for direct scrutiny. “That was a place you could send a superintendent to buy a gift for his wife,” and count on the company’s staff to offer the appropriate kind of help, he says, often by pointing out “a need that they didn’t even know that they had.” Shopping at Nordstrom also gives Wardell and his people insight into their clients’ expectations, because that is where they shop, too. “Bottom line, that’s what our clientele would consider the basic level of service. Nordstrom isn’t going to tell you something is too expensive or not expensive enough; they’re going to tell you what it costs. They’re not going to prejudge you based on the way you look.” That is the right approach in high-end custom building too, Wardell says. Every client arrives with his or her own priorities, “And if you’re going to work in high-end residential you can’t pretend to know” what those are in advance. Like Nordstrom clerks, “We’re trying to understand the client’s value system.”
