A recent New Yorker piece might remind those whose livelihoods come of developing, designing, building and selling new homes of a helpful way to look now at the next 12 months. Or any 12 months, for that matter. It’s 32 days to Super Bowl LI, so Spring Selling’s upon us, and, with so much in flux externally, we need all the helpful reminders we can get.
By staffer Elif Batuman, the article I’m referring to cites an ancient former Greek-speaking slave who lived in Turkey in the first century A.D. This fellow, Epictetus, made a name for himself as a Stoic philosopher, and the opening line of his signature guide includes the message, “some things are in our control and others not.”
Another really wise “take-away” from Epictetus is not only recognition that we’d serve ourselves to focus most on only that which we’re in control of, but that adversity and loss–when they inevitably come–don’t have to be looked at with humiliation and despair. Batuman writes:
For you, every setback is an advantage, an opportunity for learning and glory. When a difficulty comes your way, you should feel proud and excited, like “a wrestler whom God, like a trainer, has paired with a tough young buck.”
So, central to this way of thinking is that it’s not outside circumstances, or matters outside our control that make us succeed or not in our pursuits, but the way we handle them, or, even more so, the way we handle ourselves irrespective of their occurrence.
Too, when bad or difficult things happen in the course of business, as they will, we have a choice to look at those negatives as opportunities, as strengtheners, as pathways to improvement.
Among the externals out of one’s control, a home builder, architect, developer, or planner’s litany may very likely include these 10 areas:
- Global and National economics
- Rise in Terrorism
- Interest Rates
- Household and Family formation rates
- Geographical Migration Forces
- Energy Policy
- Consumer Confidence
- Partisan Politics
- Existing Home Supply and Sales
- Competitor Practices
Now, in a middle ground, at least from a perception standpoint, the housing business community may have some–but not a great deal of–say in the following, particularly if they unite and support lobbyist organizations like the National Association of Home Builders in their efforts:
- Tax Law (including MID)
- Regulation involving the environment and water
- Energy and Building Code
- Local Entitlement Fees and Development Costs
- Housing Finance Policy
However, if we can truly channel Epictetus here, we might be looking at those five areas, and the 10 above them with the pride and excitement of “a wrestler whom God, like a trainer, has paired with a tough young buck.” Challenges, yes. Obstacles, no.
Are there, instead, 10 areas every home builder, architect, developer, planner, and manufacturer can focus upon instead, that are truly within the province of each’s grasp, responsibility, and self-benefit? Let’s try them on for size, and make them a signature of housing’s resolve for 2017.
- Be Trustworthy: Trust, how it’s earned an how quickly it can be lost, never goes out of style. But now, in an era of “fake news,” empty promises, and fickle loyalties, credibility and honor may mean more now than ever. Your word, whether it’s with a customer, an associate in your own firm, or a business partner, matters, although there’s a growing myth that it may not.
- Be Customer-Caring: customer-centricity is what they talk about; customer-caring is what you do. It’s what you choose to do because, fact is, it’s why you’re in this business, and you choose to do it, not tomorrow, now. You may make great homes, but it’s your customer–one at a time–who makes your business.
- Be Nimble: Good years or bad years are made of what happens during a day, a week, and a month. It’s about absorption rates, per community, per week, and your ability to course-correct on tactical resources where opportunities surface that you may not have predicted, and where impediments arise that you couldn’t and wouldn’t have seen. Nimbleness, increasingly, applies to processes and platforms. Debate will continue as to whether modularity and componentization make economic sense in home building land today, but that’s sheerly an engineering challenge. Home building needs both to be nimble enough from a customer segmentation standpoint, from a geographical market standpoint, and from a product pricing and profit-model standpoint. Site builders are “this close” to cracking the component-library code that would enable them to personalize products at lower costs. 2017 will see some breakthroughs here.
- Be Fast: No one’s more eloquent and helpful in mapping the role of velocity–which is, roughly, financially profitable production cycle speed than our friend Fletcher L. Groves, III. Want to know what percentage of profitability your current starts-to-completions process is leaving on the table? Ask Fletcher, or attend one of his Pipeline Workshops as a first step.
- Be Resilient: For most home builders, resilience is in your ranks. It’s cultural. That’s why your people, your partners, your team and its ability to tap into new talent, new energy, and new approaches, particularly as either the challenges become generalized or the opportunities seem there for the taking … are what matters. Thing is, resilience is not a reaction to conditions changing; it’s anticipation of conditions that will change.
- Be Data-and-Evidence Driven: Data and evidence serve a dual mission. One is to illuminate a path of execution based on one’s current business model. The second, equally important, is to illuminate challenges to that current business model by exposing fringe opportunity, burgeoning markets, off-the-radar risks and rewards. Smart companies in 2017 will use data so fluently that they will know how to apply it toward both goals, current profitability and future viability.
- Be Innovative: Stop talking about it. Do it. Invest in it now. Otherwise, it will be like that 6 or 8 pounds you want to lose. You know you can do it anytime, and you will. Tomorrow. Instead, innovate today. Figure it out. What does it mean practically? How does it work every day, each day in your business? Is it what you make, or how you make it, or who you engage in the process, or how you find your customers and delight them? Innovation has gotten to mean rhetoric. But it’s actually corporate nutrition. It’s preventative healthcare for companies. If you don’t know what it is, and do it; you will die an untimely death.
- Be Collaborative: Most of the smartest, best, and most-practical and impactful new solutions in home building and housing at large will come of integrations, of wiring pieces and parts into ecosystems that serve homeowners, renters, and local neighborhoods as they never have before. We’ve naturally feared collaboration because it means giving away “trade secrets” that once upon a time were the sole, exclusive foundation of one’s business. Today, secret sauces are integrative, and super-charged versions of old-school value-builders. If you’re trustworthy (see No. 1) and you partner with others who can be trusted, it’s the way you can evolve your business from competences at purchasing land, materials, and labor today into companies who will profitability make America’s neighborhoods tomorrow. Collaboration opportunity areas for 2017 include: working closer with trades and manufacturers on their business models and profitability.
- Sharpen Your Cycle-Vision: Fundamental demand is either just that or, when times get tough and economic conditions worsen for whatever reason, fundamental demand reverts into a bucket many housing observers call “pent-up” demand. Pent-up demand, we’ve learned, is one of the least understood concepts in housing, and is more mirage than oasis. Housing leaders’ tendency–because they’re outliers and don’t think of themselves as a collective force–is to forget or deny housing’s cycles. Housing’s cycles often start with cheapened land, low rates, and accommodative policy, and they often finish with bloated land prices, rising rates, and accommodative policy. Whether or not you date housing’s recovery as having started in 2010 or 2011, this one’s now either five or six years in, and mid- to late-cycle strategy and tactics are in order, pent-up demand or not.
- Be Inspirational: Dude, you make homes for people. You make communities. You hire people and buy goods and engage services that are about developing America’s new and next towns, the places where America’s great narratives will take place. You’re part of what makes America great, a big part of it. Never forget that. Let your pride and passion for that show in everything you do.
If a check-list like this one is not part of your day-to-day operations, there’s nothing like the change of one calendar year to a new one to start clocking in on putting your focus more fully on what it is you can control, which is to be more of who and what you are. Happily and profitably so. Happy 2017 to all! May it bring success, joy, and purpose in what you do control. And for what you don’t, let’s look at those matters as the “throes of opportunity” to improve.
