Time to Step Up Your Game

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Issue #11243 - October 2019 | Page #88
By Gary Fleisher

When you look out the window at the constantly evolving building industry, not only in the US but around the globe, you see change, innovation, and entirely new ways of marketing and selling your product which have sprouted up like freshly planted corn.

Yes, there are plenty of weeds also, those things that showed great promise in changing the way our industry could do things but soon fell flat on their faces. Remember when “Green” was the catch phrase? That was replaced with “High Performance,” and that has been replaced with “Sustainability” in the latest reports on the construction industry.

Hotels used to be built on site as were dormitories, senior living complexes, condos, and apartment buildings. Today, wood and steel modular, timber, and prefab construction is the answer being promoted by everyone in the commercial construction field.

Foreign modular and prefab factories are passing us in both design and production. Many have begun shipping volumetric modules to the US simply because we haven’t kept up with demand on the commercial side. Foreign modular housing factories are eyeing the US as the low hanging fruit.

Think it will never happen here? Think again. All you have to do is look at the American auto industry. Japan, Korea, Germany, and other countries opened factories here. Even our Big 3 automakers are manufacturing cars and trucks with transmissions from Asia or Mexico, engines from Europe, and steel fabricated offshore.

If the old guard in the offsite housing industry wants to keep up with what is happening in the new hi-tech world, they need to take these two steps:

Identify Goals. My father used to say, “you can’t get lost if you have a map.” Even though today’s map is the GPS on your phone, many in our industry are lost as to what to do next.

Today, a factory simply can’t have just a “sales goal” that is handed to the Sales Manager and arbitrarily passed on to the sales team. That puts the company in survival mode only. Sure, winning a contract for another 200-module apartment building is great, but at what expense? Unless your factory has a separate line that builds projects (some do), then not only are you in a dangerous position with your single family home builders but also with the sales reps who will not be making commissions on their builder’s houses.

We, as an industry, need to identify what our industry should be in the coming decade. Will we continue on the same path we have for the past 30 years or will we look for new business opportunities and build more capacity to meet it?

Once you recognize “Sales as a Process,” the days of the Sales Manager giving a sales rep a map, a thermos of coffee, and telling them to find more builders is and has been over for a long time.

Most traditional new home builders now carry an AARP card or, worse yet, have retired or passed away. So, who is taking their place in the food chain? That is a very good question.

The offsite factory sales team can be the answer. No thermos of coffee though, because most of them only drink Starbucks after waiting for 10 minutes in line. That should be your first indication that something is afoot within our industry. The new sales reps coming into our industry need a sense of belonging to a successful effort. They enjoy selling as a team, working on projects together, embracing new technologies, supporting each other’s efforts, and look upon each day as a challenge to be met and conquered.

That is in sharp contrast to what many Sales Managers grew up with in our industry. It was a dog eat dog sales contest with the loser being let go. Builders were sending in orders faster than many factories could handle them. Then we had a housing recession and many factories closed their doors forever and builders left the industry.

Today is different. Sales is becoming a process with many projects being handed from one person or team to another taking the project through to fruition. Marketing is now the first thing that should be addressed in the sales process. Marketing is how Starbucks got you to drink really strong coffee with all sorts of flavorings to mask the bitter taste and make you happy spending $5 a cup. Now that is impressive!

Marketing is what made an entire generation scrape their muscle cars and vans to buy one of the ugliest cars ever made, the Toyota Prius. They told all those Gen X parents how buying a Prius would help save the planet for their children, how “‘green’” is what you should be driving and not those old gas guzzlers. Marketing!

Many factories are using social media to show pretty pictures of their homes and commercial projects, but they fail to use it as marketing. When I post a picture of my dog on Facebook or Twitter, my friends “Like” it but not one asks why I posted it. Maybe my dog has passed away, maybe I’m trying to find a new home for him, or maybe she is having puppies and I’m looking for buyers. But if I don’t expand on why I posted that picture, all I ever get is “Cute dog.”

That’s what is happening on your social media pages. You show a huge commercial project going up or a new home that was just finished, but you don’t tell anyone what you want them to do with this information. Maybe all you really want is a “Cute Dog!” but my guess is you want more sales. If that is why you posted it, THEN ASK FOR IT!

You need to create a Business Plan. Another of my father’s sayings was, “You can’t get lost if you’re not going anywhere.”

Many offsite construction factories really aren’t going anywhere, because management has not sat down and planned for the future. Planning at management meetings is mostly focused on problems a project is presenting to the production line, labor shortages, profit, aging equipment breaking down that needs replacement, and other everyday mundane things. These are important, but when they become your focus for the future…well, think about that for a minute. You’re not going anywhere.

A Business Plan is not hard to prepare. It simply takes someone having a goal for the factory and people discussing it to come up with ideas on how to get there or possibly come up with a different one. The key here is the goal. That is the shiny point of light everyone in the company wants to reach.

Along the way, another shiny star may begin to form and another group may pursue that as a goal along with the first one. Opportunity breeds opportunity.

Offsite and automated construction is not considered out of date, far from it. What is out of date, however, is how we perceive our place in the future of commercial and housing construction.

There were 13,000 businesses in the wagon and carriage industry in 1890. One company that planned beyond the wagon and carriage industry made wheel bearings for them. Timken Company, whose signature products, roller bearings, were first used in wagon wheels in the 1890s, moved over to automobiles and now employs over 14,000. That didn’t happen by chance. They knew they had to find a way to stay in business, so they sat down and came up with a business plan that involved making bearings for other industries. They easily adapted to the automobile because they could be applied “to nearly anything that moved.”

Measure Every Step. When faced with a flight of steps, do you move back, get a running start, and jump from the floor and over all 13 steps to the next landing? NO! Even Jackie Chan wouldn’t attempt that.

He may do two or three at a time, which for him is OK but not for your business.

The other day, I followed a woman up a narrow flight of steps who had crutches and special braces on her ankles and shoes. I could tell the first steps were very calculated and painful. She turned and apologized for being so slow. “No problem,” I answered.

As she moved up the steps, her gait became a little faster and she didn’t appear to be in as much pain as she was when she started climbing. By the time we reached the landing, she smiled and thanked me for my patience.

She looked at and measured each step as she climbed and became more confident with each one. She reached her goal knowing she would have to climb more steps later, but this goal was reached.

That is exactly what has to happen in our industry. Those steps to a different future are steep, but taking that first step, measuring what we accomplished, and moving on to the next one soon makes our transition from a wagon and carriage industry to a better modular and prefab industry using the latest equipment to build modules a lot easier.

Change is Inevitable. Imagine you just bought a new factory and you’re walking through it for the first time after signing the paperwork. Now ask yourself what you would change, what would you keep, and what would you throw in the garbage. This is not only for all the “things” in the factory but also positions and procedures.

For your company to continue to move forward, you must start doing the work needed to build the best offsite product you can.

 

Gary Fleisher, the Modcoach, is a housing veteran, editor/writer of the Modular Home Builder blog, and an industry speaker/consultant.

You're reading an article from the October 2019 issue.

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