Archive for July, 2009

A Real Fish Story

Posted July 25, 2009 By Fletcher Groves

As a consultant, you become accustomed to common themes: same industry vertical; same problems; if you are particularly unimaginative or lazy, the same solutions. Occasionally, though, you get an opportunity to work on something different. Such was the case with an engagement with which we have been involved over the past 10 months. In it, is something homebuilders might want to consider.

Gro-Grouper, Inc. is a marine aquaculture business formed for the purpose of providing a fresh, high-quality marine finfish (Black Grouper) to upscale restaurants, fresh markets, and on-line retail customers, located anywhere within the United States. It aims to become the largest provider of this species in North America, and it will have the only production facility in the world that provides a renewable source of Black Grouper, raised in an environmentally-sound, ecologically-sustainable manner – fish that are spawned, raised, and processed in its own recirculating marine aquaculture tank facility, and packaged and distributed through a dependable, on-demand, next-day replenishment system. It has a better product delivered through a vastly superior supply chain.

We helped to develop the business case and the resulting business plan. Just emerging from the planning stage, Gro-Grouper is now seeking its second round of capital to fund its pilot.

It is compelling; it is sustainable; it is green; by every indication, it will be enormously profitable; it is breathtaking in its innovation and approach; it is good for everything and everybody concerned; it exploits only the problem – the crisis – that created the opportunity.

In a single word, it is . . . cool.

The thought occurred to me. What would this type of project look like in the homebuilding industry?

Sadly, it would never happen. We would never see an idea this sweeping, this ambitious, emanating from homebuilding. We would be told to nibble around the edges, told to engineer incremental improvements that did not change anything about the underlying business model. We would be told that the goal is industry best practices, that being no-worse-but-no-better than everyone else will somehow create sustainable competitive separation.

The excuse would have been that homebuilding is different; the presumption would have been that nothing fundamental needs to change.

Well, homebuilding is different. It has its own requirements and parameters, and it cannot simply copy, for example, the Lean Production practices of the Toyota Production System. That, however, does not preclude change or tenure business-as-usual. And, as for change, I can only imagine how secure the French felt behind the Maginot Line.

I was talking with a homebuilding executive the other day. We were discussing new approaches to long-standing ways of doing business. He wondered whether it was worth the effort to fight for change. I told him that his company was not worth working for if it did not change, that the homebuilding industry was not worth working in if it did not change, and that he should at least ask himself why he was struggling for 10% Net Income Margins in the best of times, when he could be making 40% Net Income Margins growing fish.