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Not Standing Still; What Builders are Actually Changing to Meet the New Reality (George Casey)
This document discusses how home builders are adapting to changing market conditions. It contains perspectives from four industry leaders on how they are focusing on human capital, analytics, rethinking business models, and improving operations through a cash flow focus. The sections discuss Maracay Homes' emphasis on hiring the right people and holding them accountable. John Burns Consulting analyzes opportunities through microneighborhood research and pushes architects to prove design decisions. Cecilian Worldwide believes the entire home building business model needs rethinking. Orleans Homes, after bankruptcy, aims to operate like a consumer-focused, operationally excellent company that stewards capital efficiently.
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Not Standing Still; What Builders are Actually Changing to Meet the New Reality (George Casey)
- 1. Not Standing Still What Builders are Actually Changing to Meet the New Reality By Andy Warren, John Burns, Kathleen Cecilian, and George Casey
- 2. Not Standing Still A Focus on Human Capital Andy Warren President Maracay Homes
- 3. People Performance Formula: 1.Start with the right people – Gateway to Maracay 2. Equip them with the resources they need to be successful – Maracay Method 3. Hold them accountable for results – Visible metrics; FOSA
- 4. Not Standing Still Analysis Opens Opportunities and Identifies Risks John Burns CEO John Burns Consulting
- 5. Builders and DevelopersHave Become Very Analytical • Microneighborhood Analysis • Microeconomy – Where do they work, in addition to demographics and psychographics. • Resale- Have seen and understand every recent resale. • Pushing Hard on the Architects • Giving them a (small) budget to actually do research! • Prove it, prove it, prove it! • Pushing against their creative nature. 5 realestateconsulting.com
- 6. Builders and DevelopersHave Become Very Analytical • Consumer Research, especially Developers • Mining their email Interest Lists Hard • Visiting people in their homes to see how they live • Focus groups, especially realtors • Conjoint cost tradeoff analysis • Using technology • Google Earth with overlays • Zillow and realtor.com on ipad while in the field • AVM and RMBS tools 6 realestateconsulting.com
- 7. Builders and DevelopersHave Become Very Analytical • New Tools and Statistics • Proprietary Risk Indices • Proprietary Submarket Grading • Demand Models by Household Composition and Price Range • Centralizing Data Collection and Disseminating • Equity partners push even harder • Make me fall in love with this deal • You better know every answer when I ask the question • Protect my downside, with 3 opinions • Upgrade your salespeople and your management team 7 realestateconsulting.com
- 8. Not Standing Still The New House: Re-Thinking the Entire Business Kathleen Cecilian President Cecilian Worldwide
- 12. Not Standing Still A93 Year Old Start- up: With Cashflow George Casey CEO Orleans Homes
- 13. Orleans Homes Goal: Becomethe prototype 21st century homebuilder • Use Bankruptcy’s 2nd chance wisely Four Main Focus Points – Market Niche focused • Operate like a consumer driven company • Organize to do marketing and market research different – Operationally Excellent • Learn to be world class operators • Cycle time reduction • Benchmark against best
- 14. Orleans Homes • FourMain Focus Points (continued) – Organizationally Efficient • Use technology; what would Apple do? • Focus on productivity by being smarter • Morale is a competitive weapon – Great Stewards of Capital • Teach organization the discipline of investors • Recognize that cheap debt is gone; have to make equity returns
- 15. Not Standing Still Panel Discussion