Archive for December, 2015

Final Vision

Posted December 31, 2015 By Fletcher Groves

In recent years, Oswald Chambers’ words have become the final post of the year on Escape from Averageness®, the encouragement and assurance we wish to share with our clients, colleagues, and friends, for the year ahead.

 

December 31, 2015

The Final Vision of the Exalted Lord

Matthew 28: 16-20

By His Ascension, our Lord raises Himself to glory, He becomes omnipotent, omniscient, and omnipresent.

All the splendid power, so circumscribed in His earthly life, becomes omnipotence;  all the wisdom and insight, so precious but so limited during His life on earth, becomes omniscience;  all the unspeakable comfort of the presence of Jesus, so confined to a few in His earthly life, becomes omnipresence, He is with us all the days.

What kind of Lord Jesus have we?  Is He the All-powerful God in our present circumstances, in our present setting?  Is he the All-wise God of our thinking and our planning?  Is He the Ever-present God, “closer than breathing, nearer than hands or feet”?

If He is, we know what it means to “abide under the shadow of the Almighty”.

 

Still Higher for His Highest, Oswald Chambers (compiled by D.W. Lambert, 1970)

 

Pipeline Workshops™: Come. Participate. Learn.

Posted December 28, 2015 By Fletcher Groves

In the weeks leading up to a Pipeline workshop™, we explain to builders what is about to happen, we describe the tools that they will have to learn to use, the facts of the business case they will confront, the knowledge they will take away from it, what they should expect to see.

We describe the challenging, disruptive, competitive nature of the learning – the degree of interaction, the level of intensity – they will experience.

 

EFA - HBB or BHB (capture)

 

At a Pipeline workshop™, it is learn-by-doing, applying production principles and disciplines to production simulation, and measuring the resulting operating performance and economic return.  We communicate our expectation that builders come prepared to learn that way, that there is no place to hide.  Nevertheless, attendees frequently tell us afterward they should have studied more, should have prepared harder, in advance of the workshop.

Brandon Hart, Clark Ellis, and I make no apologies for the extraordinarily demanding nature of a Pipeline workshop™.  It is intended to not just inform you, but also to reform you – to challenge and change your thinking – and test your understanding of how production systems work and how daily operating decisions drive business outcomes.  As we like to remind builders, there is a difference between being in the home building business, and being in the business of building homes.

So – you have to come to a Pipeline workshop™ prepared for what is going to be thrown at you.

In particular, exploiting the Lessons from the Pipeline© business case study used at every Pipeline workshop™ requires that you have a working knowledge of the following tools:

  • Variable Costing; Contribution Income Statement;  Cost-Volume-Profit (CVP) Analysis
  • Breakeven, on both a price and unit basis
  • DuPont identity for Return on Assets
  • Little’s Law* (for calculating cycle time, work-in-process, and throughput, both periodic and rate)
  • Cost of Variation
  • Theory of Constraints
  • Lean Production
  • Six Sigma

You can read the book.  The Pipeline: A Picture of Homebuilding Production© is usually carried, in stock, on all of the main bookseller websites;  it is also available directly from the publisher (www.virtualbookworm.com).  Or, you can do your own research.  Everything else, we can teach you from scratch.

If you want it all handed to you, don’t bother to attend.  If all you want is binder material you can underline and highlight, and put on your bookshelf, don’t come.  If you aren’t willing to own what you take away from it, a Pipeline workshop™ is not for you.  If you believe improving the margin side of Return on Assets is the only game in town, a Pipeline workshop™ is about a different game.

But, if you are determined to create sustainable competitive separation, by thriving on the velocity side of Return on Assets®, by excelling at a discipline other builders find too difficult, too rigorous, too daunting, then a Pipeline workshop™ is precisely the right place for you to be.

 

Come.  Participate.  Learn.

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on March 16-17, 2016.  Cost is $850.00.  Early registration, open through December 31, 2015, is $725.00.

Sponsored by BUILDER and BuilderMT.

For more details:  www.builderevelocity.com

*We will help you out a bit on Little’s Law.  Consider this scenario:  C/T=120 days;  WIP=80;  Closings=240.  Little’s Law says:  CT = (WIP ÷ C) x 360;  WIP = (CT x C) ÷ 360;  C = (WIP ÷ CT) x 360.  Therefore:  CT = (80 ÷ 240) x 360 = 120 days;  WIP = (120 x 240) ÷ 360 = 80 units;  C = (80 ÷ 120) x 360 = 240 closings.

 

“God with us.”

Posted December 20, 2015 By Fletcher Groves

(an updated version of this entry appears on Escape from Averageness® every year, at Christmas)

EFA - God With Us 1

The intrepid, results-based consultant reclined in the desk chair, put her feet on the desk, and smiled, as she watched her almost three-year old son, now almost one-year old daughter, and their even-younger cousin make shambles of her consulting firm’s global headquarters.

She raised her glass of pinot noir towards her sister and smiled, acknowledging the hopelessness of trying to maintain corporate decor.  Looking around the home office, she began to reflect on the changes from rarely being on the road anymore;  about being able to work most days in whatever she worked-out in;  about needing to engineer separation between personal and work life, where previously it had naturally existed.

Her reflections were interrupted by a call on her cell phone.  It was an old business friend.  “Calling kind of late for a work night, aren’t you?  What made you think I would still be at the office?”

“I know where your office is.  Where are you?”, he asked.

“Home.”

Home.  Just, simply, home.  The end of meaningful work for the year.  She was looking forward to a well-deserved break with her family – her now-larger family – and friends.

They talked about families, about well-being, in some cases, about becoming well again.  The discussion turned towards business.  “How was 2015?”, he finally asked.  “And – how are you doing?  More life-changes.”

“I think the ‘life changes’ will slow down a bit, at least for a while”, she laughed.  “As for my day job, 2015 saw an increase in the consulting work I do with individual clients;  it’s not back to where we were before the end of the Age of Homebuilder Entitlement®, but better.  The ninth year of six-figure declines from personal peak consulting income was still almost as much fun as the first eight.”

It was a tired joke, told too many times, for too many years.  She thought about the duration and the cost of this housing recession and the economy itself, and shook her head.  It was now almost a lost decade;  she was grateful she could still find the humor in it, although she had to count the years on the fingers of both hands to make sure the number of years was right.

The Pipeline: A Picture of Homebuilding Production© continues to resonate, resulting in a growing series of successful public, sponsored Pipeline workshops™.  We set that goal more than eight years ago;  the workshops are now in their third year, and we are exploring other channels for them.

“The decision I made years ago – to work where I live, instead of live where I work – continues to pay off, especially when you can host your workshops in a five-diamond resort two miles from your house;  except for the away conferences and speaking engagements, I do almost all of my work here now.  And – I’ve got this great little guy, and now, his adorable younger sister, that both need me.

“Professionally, that’s where I want to be;  as the housing industry returns to whatever the new-normal is, I want to turn more of the road work over to my colleagues.

“In every way that really matters, I am – we are – doing quite well.”

“That’s good to hear”, he said.  “Merry Christmas.”

“Same to you.”

The intrepid, results-based consultant ended her call, walked to the fireplace, and placed another log onto the fire.  As she did, the front door opened, and her husband and brother-in-law walked in, back from their errands.  “Daddy’s back!  They’ve missed you guys so much!”, she said.

She turned to her sister, nodded toward the door leading to the back porch, and asked,  “Care to join me?”

“Think I will.”

They walked outside, joined by her sister’s golden retriever, and reclined into two of the Adirondacks around the pool.  They talked for a while, about a number of things, until both of their wine glasses were empty.  Her sister rose, and said, “I’ll go check on dinner.  Need a refill?”

“Thanks, but I’m good.”

The intrepid, results-based consultant looked into the northeast Florida sky on a clear, moonless, star-filled night, and her mind turned completely away from work, and toward family.  She thought about the birth of their son, and, now, the birth of his little sister:  she recalled the hope and apprehension, the joy and inevitable challenges, the changes to their lives, the newness each birth brought.

Her thoughts turned to Christmas, the one almost here and each one previous.

And, she thought about the first Christmas.

She wondered what the tiny town of Bethlehem must have been like that night, so long ago.  She thought about another young mother and father, who had made their trip with few resources, facing an uncertain future.  And, she thought about their soon-to-be-born son;  to everyone else, save a few shepherds and a cohort of stargazers from distant eastern places, he was just another child, born in an insignificant city, into a world ruled under the unflinching authority of the Roman Empire.

She considered the character and attributes of the Creator of the universe, the Author of all that is good, the true Lover of her soul.  She thought about grace and mercy.  She thought about the words of the apostle Paul, buried deep in his first letter to the small group of believers in Corinth, describing Faith, Hope, and Love, the principles of the grace she now pondered.

She leaned further back into her chair and closed her eyes.

“Thank you for giving me a Faith that looks back into history and trusts that the claims this child would one day make about Himself are true, and that each and every moment of time and event of history either points towards, or proceeds from, that truth.  But, not just a Faith in evidence past, but one that also believes in Your willingness and ability to manage this world and my part in it.

“Thank you also for giving me a Hope that understands eternity means never-ending, not just somewhere-down-the-road;  thank you for giving me a hope that looks forward from the perspective of the eternal life I have right now, but also understands that, one day, this world – with its share of both joy and pain, and varying degrees of fulfillment – will end, and I will live, constantly and eternally, in Your presence.”

The intrepid, results-based consultant thought about a final point of gratitude, mindful of all the distractions to purposeful living that daily life could present.

“Most of all, thank you for giving me a Love that that leverages Faith and Hope to sustain me, motivate me, and give me purpose, perspective, and resolve, until You return or until You call me home.”

The intrepid, results-based consultant thought about the significance of the full-circle of events that began on that long-ago night.  There was a birth;  there would be a death, a resurrection, an ascension;  in-between, there would be an earthly life.

“We will begin, then, with the creation of the world and with God its Maker, for the first fact that you must grasp is this:  the renewal of creation has been wrought by the Self-same Word Who made it in the beginning.”  (On the Incarnation, Athanasius, Bishop of Alexandria, 350 AD).

“In Him was life, and the life was the light of men.”  (John 1:4)

“And you shall call His name Immanuel.”  (Is. 7:14)

“God with us.”

 

Pipeline Workshops™: More of What Builders Say About It

Posted December 14, 2015 By Fletcher Groves

In their own words:  comments from more builders who have attended a Pipeline workshop™:

“The Pipeline Workshop™ and associated business case study was an excellent way to help me shift my production paradigms, from growing capacity to maximizing my current capacity.”  (Chris Harrison, SVP – Construction, Robson Communities, Sun Lakes, AZ)

“The concept of production building being in a “Pipeline”, along with the simple and straight-forward concepts discussed in this seminar made this one of the most eye-opening experiences I have ever had when it comes to learning about production building.  I would definitely recommend this seminar to any building company looking to gain a competitive advantage and to learn ways to get more with less.  The hands-on learning approach and interaction with other builders from around the country was invaluable.”   (Patrick Bukszar, Director of Construction Services, Essex Homes, Lexington, SC)

“The exercises and processes opened my eyes to immediate steps I had to take to become a better builder.”  (Lusant Ordonez, CEO, Zenodro Homes, Altamonte Springs, FL)

“[In many] classes, you get a lot of great ideas, but never act on them.  The impact [of] this class resonated in many ways, and has spurred us to take two immediate actions:  (1) hiring the design center manager that we did not think we could afford;  and (2) beginning the implementation to Critical Chain Project Management.  It was very clear;  we have been penny-wise and pound-foolish in not hiring a strong manager for our design center, and the impact of Critical Chain will be huge on the way we conduct business.”  (Karl Haslinger, CEO, Essex Homes, Lexington, SC)

“The Pipeline workshop™ was an eye opening experience.  Not being an owner of the company, sometimes you don’t realize the impact day-to-day business decisions have on the true desired bottom line results of the company.  Playing the Pipeline game™ gave me that ‘ah-ha’ moment, seeing first-hand how those decisions can influence your bottom line.  I took away invaluable insight on what it takes to operate a profitable homebuilding company.”   (Daniel Hopkins, Director of Purchasing/Estimating, Jeff Benton Homes, Huntsville, AL)

“If [teammates] can utilize this information correctly and make good business decisions, owners are free to consult and finance rather than handhold.  I also thought that the interactive games really showed how everyday decisions can make-or-break your production pipeline.  If a start or a closing is delayed, the whole rhythm of the pipeline is off;  you can’t correct that disruption, since it is a function of time.  A [lost] start can never be made up.”  (Sara Flint, Controller, Homebuilder Solutions, LLC, Tampa, FL)

“I highly recommend the Pipeline Workshop™.  The concepts learned have directly affected my building process in a positive way.  Implementation [of these principles] will guarantee a ‘more-for-less’ mentality in any home building operation.”  (Sebastian Alvarez, Member, Alvarez Construction, Baton Rouge, LA)

“The Pipeline Workshop™ really opened my eyes to how a company’s operating performance truly impacts business outcome.  These are things that I already knew, but the workshop caused me to start thinking about it in a different way.  For example, some companies’ motto, including ours, is to put out as many starts as we can, then sort it out in the field. After attending the workshop, I realized how counterproductive this way of thinking is;  releasing more starts than our ‘pipeline’ can support is actually going to cause us to perform worse.”  (Darek Burns, Purchasing and Estimating Manager, Essex Homes, Charlotte, NC)

“[Pipeline workshop™] is a concept that we, as a team, were aware of before coming to the seminar.  That said, being aware of it and being able to understand and implement are two very different things.  After going through the case study and the [simulations], our team went home better prepared to implement it in our company.  We feel that it will be a long-term building block for us going forward.”  (Justin Morrison, Vice President, Cimarron Homes, Durham, NC)

“The Pipeline workshop™ really took a different focus and approach than I was used to.  I enjoyed the group workshop forum that was very interactive.  It’s information that will long term and continually be thought about and digested in my day-to-day work.  It presented an interesting balance concerning the importance of cycle time in regards to the financial and operation spectrum.  It was challenging and thought-provoking.  The group games really brought the concepts to life.  I appreciated the “Accelerators” discussion that touched on some of the best practices and implementation.  The workshop challenged me to be a better leader in regards to velocity and its importance, as my Team and I will be looking for the best ways to apply the concepts to our business model.”  (Jeremy Tesimale, Production/Construction Manager, Essex Homes, Lexington, SC)

“The Pipeline workshop™ quickly and clearly helped me realize our company’s mismanagement of the amount of work-in-process and job starts.  I believe our new thinking on those principles, along with the techniques we learned, will reduce our cycle times substantially.”  (Bob Anderson, Construction Manager, Stylecraft Homes, College Station, TX)

“It is going to help our business refocus on what all of us already know, but lose focus of, in the haste to make money and sell as many homes as possible.  What we have learned will benefit [our] business and margins, if we become disciplined, [and] stick to the principles of the pipeline.”  (Sean Ward, Field Manager, Eagle Construction of Virginia, Richmond, VA)

“[The Pipeline Workshop™] allowed me to step outside of my department and see the industry on a wider scale.  The Pipeline Game™ was a great visual tool that emphasized the importance that velocity plays in home building.  It has allowed me to begin thinking creatively about the ways I can improve my department to ultimately improve our companies velocity overall.”  (Alexa Drees, Design Consultant, Drees Homes, Jacksonville, FL)

“The Pipeline workshop™ was a great chance for my team to learn some excellent fundamentals for a better business in a very straightforward manner.  The instructors were superb, and the overall atmosphere was one of education, fun, and comradery.”  (David Savicki, Purchasing Manager, Cimarron Homes, Durham, NC)

 

Come.  Participate.  Learn.

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on March 16-17, 2016.  Cost is $850.00.  Early registration, open through December 31, 2015, is $725.00.

Sponsored by BUILDER and BuilderMT.

For more details:  www.builderevelocity.com

 

Pipeline Workshops™: What Builders Say About It

Posted December 7, 2015 By Fletcher Groves

In their own words:  comments from builders who have attended a Pipeline workshop™:

“The [Pipeline game™ production] simulations were a brilliant way to demonstrate and drive home the significance of cycle time improvements and improving trade partner efficiencies on ROA and Net Income.”  (Keith Porterfield, COO, Goodall Homes, Gallatin, TN)

“Pipeline workshops™, through hands-on simulations and classroom instruction, provide excellent learning experiences to see WIP turns at different velocities, and the effects on Return on Assets.  The principles and disciplines, if applied in the field by you as a builder, will increase your ROA.”  (Scott Jagoe, President, Jagoe Homes, Owensboro, KY)

“All of our construction guys came back from the conference with a lot of new info.”  (Doug French, Vice President, Stylecraft Builders, Inc., College Station, TX)

“I participated in the first-ever [BuilderVelocity™] workshop, spending two days exploring the ins-and-outs of production, inventory, and scheduling.  It was quite intense, challenging, and not for the intellectually lazy.  We played repeated rounds of a building simulation game, and the students saw clearly that scheduling requires careful thought and planning.”  (Scott Sedam, President, TrueNorth Development, South Lyon, MI, excerpted from the April, 2014 issue of Professional Builder, “Taming the Chaos”)

“[the] Pipeline workshop™ was by far the most engaging workshop I have attended to date.  The principles shared relate to home building companies of all shapes and sizes.  The two day program kept me engaged the entire time with a mix of lecture, open discussions and simulations of practical application.  I have already applied some of what I learned to my business and I’m looking forward to fantastic results.”  (Mark Refosco, President, Marcus Allen Homes, Arthur Rutenberg Homes franchisee, Jacksonville, FL)

“The Pipeline Workshop™ is an extremely effective insight to production, for homebuilders of all sizes.  Whether your company builds 5, 50, 500 or 5000 units annually, you will leave this event with a deeper understanding of your company’s production capacity, and where you need to focus your attention, to perform at an optimal level.”  (Adam Roller, President/COO, IH First Coast, LLC, St. Augustine, FL;  an Inland Homes® Builder)

“The simulations at [the] Pipeline workshop™ [were] a very innovative way to demonstrate the critical nature and relationship between cycle time, inventory turn, margin, and return on assets.  Both days were filled with learning, engagement, and inquiry that proved to be invaluable.”  (Vishaal Gupta, President, Park Square Homes, Orlando, FL)

“Think the same way, and you stay in the same place as everyone else;  challenge yourself with the new theories and strategies, and [you] become more effective in your company[y’s] achievement with your team.  You get to take these theories and teachings and immediately apply them in a simulation of the real world to test your skills against others, and that’s what this business is all about:  finding the right mix of everything to be the best.”  (Justin Parry, President, Parry Custom Homes, Irwin, PA)

“ROA is not discussed much in the building industry;  the focus has always been on margins per house.  Through the Pipeline workshop™, you will learn that your company ROA is just as important to know as margins per house.”  (Mark Ivey, Owner, Ivey Residential, LLC, Evans, GA)

“I think the concept of ROA or inventory turn can be THE differentiator between success and failure in a production type environment.  It requires thought one level past the “P&L”, but will allow the manager that can recognize [its] impact and implement it, a major competitive advantage.”  (Wade Jurney, Wade Jurney Homes, Greensboro, NC)

“The Pipeline workshop™ provides full insight into the application of universal principles of production.  It provides clear and convincing proof that improving velocity will yield not only faster profits but greater profits.  I look forward to attend it again with some of my key staff.”  (Carlos Alvarez, President, Alvarez Construction, Baton Rouge, LA)

“It proved to be a great opportunity to enlighten our entire management team with a ‘higher level understanding’ of how our business works.”  (Craig Morrison, CEO, Cimarron Homes, Durham, NC)

“As an owner of a home building company, intimately understanding the importance of home building production principles, as taught in the Pipeline workshop™ and book, and effectively implementing them in our building processes, will be critically important to becoming a best-of-breed builder in our competitive market.  Running our company using these home building production principles will not only allow us to weather the next downturn intact, but grow in a healthy way.”  (Josh Lysen, Principal, Merit Homes, Kirkland, WA)

“The Pipeline workshop™ conducted by SAI Consulting and Continuum Advisory Group was a straight-forward introduction to what matters most in the homebuilding industry…. Velocity!  Although many of the concepts reviewed are not new to most managers, the manner in which they were highlighted was eye-opening.  The case study, simulations, and discussion with the instructors made it crystal clear as to how to go back to my operation and implement immediate improvements.  The interaction amongst the diverse group of attendees was also invaluable.  How often do we get the opportunity to discuss best practices with others in our field?  The workshop was time and money well spent, and I’m already getting a return on my investment!”  (Mike Cancilla, General Manager, Essex Homes, SE, Lexington, SC)

“Great opportunity for any individual to uncover the potential of the pipeline and maximize their business returns.”  (Brian Small, Land Acquisition Manager, Drees Homes, Jacksonville, FL)

“The Pipeline Workshop™ reminded me that there is no substitute for moving quickly and efficiently in every aspect of our business.  The workshop agenda and material was focused and challenging.”  (Greg Stallard, Division President, Essex Homes, Charlotte, NC)

“I walked away with a new perspective on making returns in residential homebuilding that challenged the models and assumptions I have worked under.”  (Mark Carter, Operations Manager, Drees Homes, Jacksonville, FL)

 

Come.  Participate.  Learn.

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on March 16-17, 2016.  Cost is $850.00.  Early registration, open through December 31, 2015, is $725.00.

Sponsored by BUILDER and BuilderMT.

For more details:  www.builderevelocity.com