Clark Ellis, Principal with Continuum Advisory Group, and author of the recent article featured on builderonline.com “Moneyball for Homebuilders: Take an ‘everything matters’ approach to operations, and ‘small ball’ will get you the wins”, was recently invited to join an outstanding lineup of speakers at the 5th annual UBS Homebuilder University on April 9th in New York City. The theme of this year’s conference was how homebuilders can overcome increased lot, material and labor costs to build a profitable home that addresses the desires of the First Time Homebuyer. The conference is attended by professional investors who are interested in learning the true challenges that are facing today’s homebuilder, and which builders are best positioned for overcoming these challenges.
Clark’s message was simple: for builders to serve the first time homebuyer, speed and efficiency will be critical. When building a product with already tight margins, there is little room for error. Builders must minimize complexity (complexity in construction cycles, complexity in product offerings, complexity in management of external relationships) in order to maintain a high level of velocity. Velocity is the key to success in this segment, but it is difficult to achieve. Clark says there are three key operational areas that builders should focus on in 2015 in order to drive velocity:
- Control the product to balance customer demand with minimizing complexity
- Collaborate in the supply chain, with structure and purpose to align risks and rewards and drive performance
- Push the IT strategy of the company towards process automation and information visibility
With an emphasis on these areas, public and private builders will find themselves better positioned to meet the demand of the millennial buyer… and maybe make a little money at the same time.
Other speakers included John Evans, Division President with Orleans Homes, Sam Rashkin, Chief Architect with the U.S. Department of Energy and recent author of the book: Retooling the U.S. Housing Industry: How It Got Here, Why It’s Broken, and How to Fix It, Steve Petruska, Founder of SCP Group and former COO of Pulte, and James Hecht, EVP of Strategic Development with Stearns Lending.
Pictured above is Clark explaining Continuum Advisory Group’s proprietary Homebuilder Health Check tool used to evaluate every aspect and function of a homebuilding organization.