Category Archives: Commercial Construction

Corporate vs. Local

How Finding Balance is Crucial to Home Builder Success


For the local branches of corporate regional and national builders, a large part of their success relies on finding the right balance of control and autonomy. But there is a distinguishable line between having needed autonomy, and going “rogue” and losing ties to the corporate strength. The importance and true value of both the corporate influence and the local influence are undeniable, but the balance between the two is the most crucial component: it’s what most builders struggle with. Actively trying to achieve the perfect balance will make your business more competitive, and it will gear you in the right direction for long-term success both for your corporate entity and your local one.

The corporate/local relationship is not unlike a parent/child relationship – similar to how parents provide rules, structure, and guidance for their children, corporate provides structure and a set of systems that have been tried and true for their success as a whole: standards, training, rules and guidelines, and expertise that only comes with many years of industry experience. Corporate must identify the people, processes, and technology for its little local branch. They’ve already created the mission statement, the branding and logos — they’ve built the foundation on which the local builder must build upon (pun intended). Without the standards and systems, local branches would be orphans, starting from scratch and having to do a trial-and-error for everything until finally getting it right – ultimately wasting precious time and resources.

But what about the other side of the coin? Should corporate be synonymous with “cookie cutter”? Or have a “my way or the highway” attitude? I would suggest not. Too many structures and constricting systems can be so anti-productive that they end up suffocating the voices and ambitions of those at the individual level who actually know what they are doing and want to make a change for the better, fulfilling corporate’s original intent using local knowledge and resources.

Product is simply not the same in each state, let alone city. History, climate, style, market, and economy all have huge implications in the marketplace, and especially in homebuilding. Being able to choose land based on local knowledge and market trends is an invaluable resource that corporate often discredits. But the national corporate builder is not omnipresent enough to actually know everything about each individual local market. That’s the beauty of having a local branch where you can really “have feet on the street” and get the scoop that the locals only know – the local expertise based on a national model – when done right it has the ability to create a lot of local success and corporate a lot more money. Local vendors and local expertise that are aligned with corporate brand standards, values, and policies will always yield the best results.

There is a tension between the overarching corporate objectives and the local autonomy of a branch. But instead of feeding the tension and making a situation (that is here to stay) MORE unproductive, proactively creating systems to maintain a balance instead of a strain will yield the best results for the local and for the corporate. We’ve seen the two extremes: the rogues that can’t color within the lines, and the dependents that can’t seem to the leave the nest. And although each Corporate vs. Local situation is unique, the bottom line is that being aware of this need for balance and of a good relationship between corporate and local is, at the very least, a first step in the right direction.

 

Homebuilder Event Season is Here!

Things have been pretty busy for us at Contrado lately, gearing up the past few months for some of our favorite annual events. Here’s a quick summary of what’s been happening, who was involved, and what we learned from these fun industry happenings.

Southwest Builders Show

Each year we look forward to SWBS as a great event to reconnect with local industry folk in a fun, social, and supportive environment. It’s a great place for local vendors to showcase their new products, technologies, and businesses themselves. Social in nature, but an opportunity to networking with local partners, we have been the recipients and the givers of support from local vendors and builders alike from around the Valley.

We had a booth in a prime spot next to the putting green, showcasing our Interactive Floor Plans, our interactive Customer Discovery Centers, as well as Aterra’s Design Tool.This year’s Southwest Builders Show itself had 20% more vendors than last year’s – new vendors being one of many good indications that the local homebuilding industry in Phoenix and Arizona is improving. The Forecast Luncheon was informative and positive – most of the industry experts outlining the signs of a market rebound for our industry. A strong comeback and a bright forecast definitely set the mood for a great day in Downtown Phoenix.

Builder MT

Held by our Alliance Partners Sales Simplicity (CRM) and BuilderMT (operational system), this year’s event in Denver gained momentum and doubled its participants – from 50 last year to over 110 this year. It continues to be a great place where builders nationwide can come to learn about and test the latest software updates from these companies. Among the events were showcases, trainings, future development demonstrations, and a suggestions portion from their current client base. Very technology-based, so we felt right at home!

We showcased our Interactive Floor Plans, our interactive Customer Discovery Centers, our Design Tool & Aterra Designs Kiosk, as well as our Interactive Model with Toll Brothers.

Hyphen Solutions

A new event for Contrado, this was a quick trip to Vegas for an opportunity for our company to provide a special presentation to an exclusive crowd in the homebuilding industry. Top builders and their information technology representatives came to learn about the different cutting edge technologies available to home builders today – and we were honored and excited to be a part of this powerful technology conference sponsored by Hyphen Solutions. The event centered around the technology supply chain management in our industry – highlighting interactive technology as the epicenter of it all. This change in our industry – interactive technology & integration becoming a mainstream standard – is what we have been looking forward to for years.
Our special presentation featured a step-by-step process of our enhanced home-buyer experience that showcases our Interactive Floor Plans, our interactive Customer Discovery Centers, our Aterra Designs Kiosk & Design Tool, as well as our Interactive Model with Toll Brothers.

 

Declare Independence from Tradition!

Embracing 21st Century Technology in our 20th Century Industry
(Or, why we do things differently at Contrado)

Thomas Jefferson once said that he liked “the dreams of the future better than the history of the past.” He knew what they needed: independence from traditional political, economic, and religious oppression. By writing the Declaration of Independence and the US Constitution, he was expressing the convictions that were in the hearts of the American people – the need for change.

1.  Understand that People Are Afraid of Change. When was the last time you changed the course that you were on? “Change” is a broad word that we can apply to many different things… a birth, a loss, a move, a new opinion, a new job. But ultimately it is a departure from tradition – which leads to a new way of doing things. For example, the change our nation went through during the 1700’s, despite being fought by many, led to a whole new world of possibilities and fresh starts. Regardless, change usually freaks us out. Whether it’s Good Change or Bad Change, we as humans are naturally afraid of the unknown. We fear failure. We feel doubtful about the possible outcomes. But we have to remember we always have options, and we can always CHANGE the outcomes. You don’t have to settle. “Open your arms to change, but don’t let go of your values.” – Dalai Lama

2.  Understand the Technology. If we think of change as a software upgrade, what software are you in need of, right now? Do you need better online engagement with prospects, for example? Do you need to build more homes with limited resources? Do you need better software to help you meet your customer’s exact needs? If you don’t know, evaluate what isn’t working. Then inform yourself!  You can start by asking the question, what are the best tools out there for what I need right now? If you go beyond word-of-mouth and previous methods into the world of uncovering the new, you will find services, systems, software, companies, and tools that you have never even heard of (like Contrado’s new HTML5 Interactive Floor Plan system!). What are today’s game-changers? Incorporating iPad technology into their homes? Making it easier for you to do your job? Building homes in half the time? You will be surprised at how much newness is flooding the industry.

3.  Understand that nothing will change unless you Try Something New. Times they are a-changin’! We are living in an exciting time where technology seems to be accelerating at the speed of light, and we will be left in the dark if we don’t try to keep up. In other words: have you ever heard someone say that the definition of insanity is ‘doing the same thing over and over again, and expecting different results’? Trying new things can be scary folks, but how can you improve without even a little bit of change? Traditional tactics in the Revolutionary War ultimately failed the British; the revolutionaries were outnumbered, so they developed guerilla warfare to outmaneuver their red-coated opponents. They were forced to innovate the way they battled – thinking differently, operating more efficiently, using what they had and just going with it – which led them to victory.

You have the right to life, liberty, and the pursuit of happiness.  So if after all of this you don’t do it for you, do it for our Founding Fathers!

Bounty Towels & Building Homes

What can we learn from the retail industry and apply to building homes?

What’s in a bar code?

We may not wonder any more why bar codes are on packaging as we shop at a store, but in reality this way of information tracking is relatively new.  In June of 1974, the first U.P.C. scanner was installed at a Marsh’s supermarket in Troy, Ohio. The first product to have a bar code included was a packet of Wrigley’s gum.

The process is relatively simple, in that an optical reader device scans an item and the associative data is then pass onto the logistical parties in order to keep the store shelves filled. However, having proper formatting of data and agreed upon industry standards took some 20+ years. What retailers soon discovered, is that the more integrated their supply chains were with information, the less errors were experienced, quicker fulfillment times of orders occurred, and less man-hours incurred per dollar of revenue was achieved. In other words, they developed a very highly efficient supply chain model with a single pull-through triggering mechanism, that being the bar code.

 

Single Trigger Event Pull-Through Model for Retailers

Consolidation of Retailers In The 1980′s

As we entered the second decade of bar code scanning and single trigger envent tracking, Walmart had revenues of 1 billion, and 276 outlets in 11 states. Today, Walmart has sales of $421 billion and 8,970 locations worldwide. This type of unprecidented growth came from geographical expansion, and at the expense of smaller retailers that were not able to track their sales as efficiently. Mass retailers such as Walgreens and Target, realized the power of information tracking and automating their processes with Electronic Data Exchanges (EDI) in order to conduct more transactions with less resources.  In fact, the reality is that we are able to sustain a standard of living much higher than pre-1980′s due to a highly mechanized means of delivering products to market.

Measuring Productivity of the Construction Industry*

The productivity of the construction industry, as measured by constant contract dollars of new construction work per hourly work hour, has gradually declined (with some modest exceptions) over the past 40 years at an average compound rate of -0.59%/year (see Figure 1). This is particularly alarming when compared to the increasing labor productivity in all non-farm industries, which have experienced an increasing productivity of 1.77%/year over the same time period. Over the past decade, this trend has slightly improved but the decline in construction labor productivity relative to the rest of the industry has continued.

This is a serious problem which indicates that over the past 40 years, construction projects have required significantly more field work hours per dollar of contract. In other words, the construction industry seriously lags other industries in developing and applying labor saving ideas and in finding ways to substitute equipment for labor. While there are a number of construction tasks that have been made more productive through the use of labor saving equipment, it is clear that, looking at the whole industry, there is a significant productivity problem. Why is this the case and what can be done about it? First, let’s review the productivity data shown in Figure 1.   (read more)

Figure 1. Labor productivity index for US construction industry and all non-farm industries from 1964 through 2003.

*From: Labor Productivity Declines in the Construction Industry: Causes and Remedies, Paul Teicholz, Ph.D. Professor (Research) Emeritus, Dept. of Civil and Environmental Engineering, Stanford University

Where is The Single Trigger Event (Bar Codes) for Home Building?

Now, the next question is where is my bar code for building the home? If that’s your question, then we’re beginning to make great strides into the next evolution of building homes. This would not have been possible if it were not for the advent of just a few key ingrediants:

  • Internet
  • Building Information Modeling (BIM)
  • Application Programming Interface (API)
  • Web Based Store Front

The model is relatively simple, in that all information for building the home must be linked to any and all retail areas for a home builder. This means that data that is incurred in the design process must be associated with the builder’s marketing materials on the web (ie store front). Think of it if you will, the home builder’s web site is their retail store and that any purchasing activities will need to be done in their store. Once a customer buys the product, then the needed data is then exported through API’s into the appropriate areas to fulfill the transaction.

This model does not mean that builders are  going to do away with sales agents, models, and other traditional areas of home building. What is does mean, is that the information that is developed from Building Information Modeling (BIM), can now be linked to web-based interfaces such as floor plan options, Sales CRM, builders suppliers, and others. The single trigger event pull-through strategy (ie bar code), allows for all transactions to be interconnected with each other only if the event occurs. So in doing so, information flows according to Figure 2.

Figure 2 – Purchase of a home and affiliated options triggered by customer, allows for pulling through of labor and materials with information created up stream in the design stage with BIM through the supply chain network.

In summary, we are in the midst of the most exciting times for home building in the  history of the United States. We are being confronted with razor thin profit margins in a time that productivity is at rock bottom. In order to deal with single digit profit margins and high Sales General and Administration (S G & A) costs, we must automate our processes. This can be done with coordination of both design and material specifications through BIM. Once the data is formatted, it can then be passed to a builder’s admin system for both material and labor pricing and scheduling to construct a home. Of course, this transaction gets triggered by the online selection process by a home owner either with a designer and/or sales agent. Once we begin to emulate other industry’s ways to improve productivity, then we’ll see better profit margins in the future of home building. The future is bright!

 

 

 

 

 

 

 

Strategic Partner Alliances with The Contrado Group

Sales Simplicity a Sales CRM Company for Homebuilders & Big Red Rooster Architectural Services

 

We have been working with the Sales Simplicity team for the last few months to fully integrate our Interactive Floor Plan (IFP) tool’s eLead functionality. Essentially, we have developed our Interactive Floor Plans to have seamless integration of leads into Sales Simplicity’s CRM with XML feeds. So, as soon as a prospect “saves” a floor plan from the IFP, the information is sent to the eLeads portion of the Sales Simplicity’s program.

Interactive Floor Plan

(click on picture to view)

 At which point, the sales agent is notified via e-mail that they have a lead to follow up with along with “saved” floor plan from the prospect for viewing. This will also allow for a marketing program workflow to commence too. At which point, the sales agent can begin the dialog with the prospect and make the sales!

 Agent Making Sales with IFP”s and Sales Simplicity

“We have truly enjoyed our partnering in the market with The Contrado Group. Our customers have seen the need to capture key information while the prospect is viewing homes online. Now we have a way to capture this information such as floor plans, elevations, and options for our clients. I foresee our alliance to be value-add for all of our customers” say, Barry Forbes President of Sales Simplicity.

 

Big Red Rooster, a global brand experience firm, announced that Don Hasulak has joined the company as Managing Director, heading the firm’s newly formed Phoenix office which is also a part of The Contrado Group’s facilities. Hasulak will be responsible for overseeing the expansion of the Big Red Rooster offer into the Architectural and Construction Services segment focusing on Planning and Design, Documentation, and Implementation.

“The addition of Architectural Services to the Big Red Rooster portfolio is a natural evolution,” states Aaron Spiess, President, Big Red Rooster. “Bringing this service in-house ensures our clients a world-class, seamless experience from design through to implementation.”

“As an architect, and as a business leader, I understand the interplay between form and function, and have a keen ability to reveal hidden costs within a project,” notes Hasulak. “The exciting piece of this for me is having the opportunity to work more directly with clients, bringing my real-world retail experience to every project.”

Previously, Hasulak served as Managing Director at FITCH, providing leadership for clients such as airport concessionaire OTG, Disney Regional Entertainment, and T-Mobile. Don began his career as owner and operator of the largest casework manufacturer in the Southwest. A registered architect, Don holds a Bachelor of Science Degree in Architecture from Cornell.

About Big Red Rooster

Founded in 2002 by Martin Beck and Aaron Spiess, Big Red Rooster (www.bigredrooster.com) is known globally as a brand experience firm, focusing on the retailing, manufacturing, food service, healthcare, and service sectors. Activating shopper insights to transform brand experiences, Big Red Rooster’s client roster includes world-class brands such as Home Depot, American Express, Jack Daniels, Wrigley, SC Johnson & Son, Office Depot, and Nike. Big Red Rooster is the founding member of RoosterGroup Partners, a consortium of firms that create impact at the decision point where shoppers, retailers, and manufacturers meet.

 

 

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