Act Like an Outlier: Embrace Technology-Enabled Transformation

Lessons from two home builders who have thrived during the industry’s slow recovery

Act Like an Outlier: Embrace Technology-Enabled TransformationWhile the home construction industry has been making progress towards recovery since the Great Recession, to many companies this recovery has seemed glacially slow. They’ve struggled to remain viable in the face of an uncertain future. Yet a few other companies are bucking the trend and finding surprising success and growth.

What’s their secret?

It’s not only having a great, boundary-pushing business plan. It’s also having the right collaborative technology in place to support the implementation of the company’s innovations, as these two brief case studies suggest.

Case #1: Ashton Woods

Private builder Ashton Woods was initially hit quite hard by the Great Recession. But they quickly developed a bold plan that the company’s young CEO Ken Balogh predicted could help the company grow five times in five years. In the dark days of 2009 and 2010, Ashton Woods’ leadership sat down to reinvent themselves as a more nimble company with a blank slate, start up attitude.

The new plan included many changes such as a land-light strategy with 24 month sell-through horizons, a design and architecture driven product differentiation program, and a service-centric approach to meeting customer needs, with local units able to make changes to respond to their specific markets without disrupting manufacturing cycles and cost models.

Needless to say implementing this strategy required stakeholders to work collaboratively as never before, and technology definitely played a role in helping different units work together efficiently.

These changes have so far come very close to meeting Balogh’s initial prediction, with the company achieving four times growth in five years and generating $1 billion in revenue for the first time in company history this year.

Case #2: Oakwood Homes

Another very interesting example of a home builder making revolutionary changes in their business model comes from Oakwood Homes. This builder has achieved significant growth between 2012 and 2015 thanks to the implementation of a single-source portal allowing all stakeholders—from the business unit to vendors, suppliers, builders, and buyers—to share information about a project.

One of the most exciting things that the single-source portal has done is allow is for buyers to make their choices of floor plans, materials, and finishes using a 3D computer model. This eliminates the need to build model homes and heightens the buyer’s sense of involvement in the project.

Another important impact of the single-source portal has been to introduce efficiencies of scale to projects through vertically integrated development and manufacturing processes.

Viewing their enterprise holistically as an integrated ecosystem has helped Oakwood to grow from 363 home closings in 2012 to 824 in 2014 and a projected 1097 in 2015.

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