Fast, Nimble, Adaptable

I want to comment on recent posts on two other web logs. One of them is at housingcrisis.com and the other is Bill Lurz’s Ear to the Ground web log on housingzone.com. In different ways, both posts speak to the dangers of averageness – and the antidote to that averageness – that “Escape from Averageness” addresses.

On the “Bottoms Fish” post (on housingcrisis.com), the point is made that “home sales volume may hit its low point this year . . . that point finally means that from a sector standpoint, some homebuilders will have reached their moment of opportunity. Access to cash and capital will have a lot to do with who is there to jump on the chance to thrive amid a wide landscape of distress – lowest direct costs per square foot will be a building company’s lever back into high volume business. Equally important . . . will be who will nail the right product for the moment . . . “

On the “Game Plan for the Future?” post (housingzone.com), Bill Lurz describes what he terms the “land-heavy, debt-light” land acquisition strategy of Pat Neal: “For a number of years, he has been buying land – when he finds a good deal – for cash, with his own money, then entitling it to the maximum density he can get. But he does not always build to that density. This strategy allows Neal to build to the market. Whatever product will sell best is what he builds.”

Although secondary, certainly unintentional, and probably unnoticed, both cases validate the need for homebuilders to deliver extraordinary levels of distinctive value to a narrowly-defined segment of the homebuying market. They also both hint at the main attribute required to drive that kind of value: a fast, nimble, adaptable business operating model.

That type of value and that attribute simply does not emerge from a focus on “industry best practices”.