HomeBuilding Case Study 1

Homebuilding Case Study 1

Posted on 05/04/2015 in HomeBuilding - 189

CHALLENGE: Strategic Planning for Profitable Growth

A 500-unit homebuilding operation wanted to develop its strategic plan to profitably grow the company to 1500 units by 2018 and position it for a value realization event. The company president sought the help of Continuum Advisory Group’s Residential Team. In order to support the growth strategy, our team had to analyze, evaluate and improve the builder’s business processes, internal communication and overall organizational design. At this time, the engagement is still in the early stages but we have already identified and implemented multiple process improvements that are delivering improved results.

SOLUTION: Strategic Planning and Internal Process Improvement

Our team began by conducting internal interviews with employees in every department in order to identify the breakdowns and weaknesses throughout the organization. We identified a number of process improvement initiatives based on these interviews, as well as the results of our proprietary Homebuilder Health Check. We then prioritized these initiatives and identified those that needed to be addressed immediately in order to improve short-term performance. One of the first process improvement initiatives was a reduction in the amount of days it took for the Drafting Department to redline and approve new plans. We uncovered an opportunity to remove up to 5 days from the redlining process by creating a “joint mark-up” meeting where the appropriate people identified all plan errors on the front end, as opposed to the plan exchanging hands multiple times between departments. In addition to establishing the joint meeting, we documented the complete process in order to illustrate the role of each function that is responsible for the timely release of a new plan to the Estimating and Sales Departments. We are also in the process of implementing a major process re-design in the Estimating function that, when completed, will increase productivity by 2.5-4 times. Finally, we have created and implemented an internal communications structure with two cross-functional teams that meet weekly to monitor business results, identify issues that are inhibiting performance and to develop solutions for these issues. These two cross-functional teams are in addition to the Executive Committee, led by the President of the company, which was established to identify long-term strategic initiatives that support the growth of the company.

RESULTS: New Team Structure ► Improved Communication ► Best Annual Performance

The Drafting Department was able to push all new, fully revised plans through the channel quicker and with more efficiency, ultimately resulting in an increase in the number of starts that are released to the field. The cross-functional team structure has facilitated the implementation of the process improvements listed above and has helped to develop and implement additional business process, practice, policy and procedure changes. Internal communication has improved dramatically since this structure was created. The client is on pace to deliver its best ever year of performance in units, revenue and profit.