Team Slows Down and Hits BHAG*

The Background At the height of the real estate boom, homebuilders were moving fast and furious, creating demand and then trying to keep up with it.  Large national homebuilders were doing well.  One regional division of a leading company*, in one of the fastest growing geographical markets, was overwhelmed with demand.  The leadership team was struggling to keep up.  Their top priorities were quality and on-time delivery, which of course, conflict with each other, and both were big and hairy (BHAGs).  The division was on the brink of chaos.  Customer complaints had hit a record high, and missed delivery targets only made the next month even more impossible.  The leaders were stressed, and tensions between functions were growing.  New hires who were coming on board almost daily, were given little orientation or supervision.  Burnt out employees were skipping process steps and doing work-arounds, causing costly mistakes. The division leadership team needed an intervention to get a grip on the business. * “Big hairy audacious goal.” According to Jim Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies, “A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.”

Identifying the Opportunities

The homebuilding process is like a train, with the acquisition of land as the engine and customer service, which handles warranty issues, as the caboose.  The cars in between – land development, sales, financing, design studio, construction and customer service – are each responsible for specific tasks before passing the home to the next car.  These handoffs were turning into tosses over the fence with no looking back.  When the delivery schedule was threatened or quality fell short, functional leaders pointed fingers rather than collaborating on solutions.

It was clear that the division was moving too fast to meet very high targets without enough trained people to deliver results.  But as I assessed the situation by talking with each leader and a few employees, it became clear that the only plan they had was a list of goals, all of which came down from the Corporate office, along with some underlying metrics.  That’s it.  Everyone knew all the targets, since they were reported and discussed daily, but there was little connection between the cars on the train.  In their attempt to make the numbers, each function would often turn over its deliverable just under the wire and with a few corners cut, giving the next function a mess to clean up and compounding the problems.

Functional heads had little understanding of their peers’ challenges, and they had no time or patience to care.  Most importantly, when the leadership team got together, they spent nearly all their time focused on the targets they had missed, blaming and defending.  Their meetings were intense and only increased the friction between teammates.  The division president thought a team-building retreat would help ease the pressure.  I agreed that getting away to play golf and party would be a lot of fun, but this team wasn’t going to last unless it stopped the madness long enough to come together on a plan.

How Strategic Planning and Team Coaching Worked

We began a two-day retreat by pushing the re-set button.  The team was going to create a plan for the business, but rather than jumping right into it, they spent the first half-day in an individual planning exercise.  I coached the leaders through creating their own personal plan, with a full-life scope that was much broader than their professional roles.  Taking a morning to reflect, acknowledge their personal accomplishments, create a life vision, and set priorities and intentions for themselves, was just what they needed in order to step back and put their own personal craziness in perspective.  They felt rewarded and refreshed, and in a much better place to tackle the business issues they were struggling with.  They had also experienced the very same process they were about to go through for their team.

After a leisurely lunch on the resort’s patio, we started with a thorough review of the division’s successes, from the major milestones to the smallest accomplishment.  We filled up two walls of flip chart notes documenting their achievements in the past year.  They marveled at all the good work they had done and unanimously agreed to share this list with the entire staff.

A Vision

By now, the team was upbeat, energetic and ready to start planning, beginning with their vision of the future.  I asked them “What will it look like when this division is wildly successful?”  I urged them to go beyond metrics by describing the future from different perspectives.  They had many dreams in common, like:

• We’re seen as the easiest homebuilder to work with in our region.
• We’re the #1 choice for new college graduates looking for jobs.
• Our customer service and construction teams look out for each other.

These descriptors led to the team’s vision:  “We are a cohesive team of professionals working together to give our customers a pleasant home-building experience, resulting in high-quality homes, delivered on schedule and backed up by superior customer service.”  They also arrived at four values they saw as core to achieving this vision, the most important of which was teamwork.

Lessons

Once we had gotten clear on the team’s vision and values, it was time to go back to the past, to lessons they could learn.  Just like they had recalled all their accomplishments, they came up with a list of disappointments.  This shifted the mood a bit, but only temporarily until we reviewed both lists side by side.  Many on the accomplishments list had to do with getting good people on board, staff going the extra mile, and process support from Corporate.  Themes on the other list were around poor communication, burnout and turnover, and failure to use available tools and procedures.   The picture soon came into focus:  management was letting staff down.  Much of the staff didn’t understand how the train cars hooked together, and they weren’t getting support in managing the complexities of all they were being asked to do.  They weren’t being trained properly; they weren’t held accountable for following procedures; and the message they heard most often is “we’re not meeting our goals.”   The team came up with three concise lessons:

• Hire, train and reward for excellence.
• Stick with the process – it works.
• Be there.  (Their short-hand for communicating not just what, but why.)

We all have limiting mindsets about ourselves and the world, and teams are no different.  This team had made a habit of whining, and they nailed the most damaging theme:  “We’re too busy.”  Too busy to plan, to do things thoroughly and according to procedures, to train and coach our people, to talk to each other, and so on.  I asked them to consider a replacement for that thought, something they could really believe and inspire others to believe as well.  We needed to go back to the vision and values as reminders, and they had a very open discussion about what was important to each of them individually, some of which they had gotten clear on when they had done their personal plans in the morning.  They arrived at a new mindset:  “We do the right things the right way.” Their intent was to remind themselves and each other that delivering high-quality homes on time was their priority, and that the only way to do that was to ensure that every step to that end was done well.

It was a perfect place to close out the first day.  They had had some great discussions and had come together on several issues.  The team that partied that evening was a different team from the one that started they day.

Burning Imperative

On day two, our first objective was to decide on a top priority for the next year, and it was unanimous that the division needed a breakthrough in developing their people.  I helped them shift perspective to see this as the responsibility of every leader, not just the head of construction, who had the most employees, or the human resources director. Opportunities to teach and coach came up all the time, and everyone committed to taking advantage of these, even if employees weren’t in their departments. That holistic view and their awareness of each others’ challenges were obvious as they began talking about the goals they wanted to accomplish.

Like most manufacturing companies, this one had no shortage of very specific metrics, most of which had fueled the “every man for himself” mentality.  We needed to get beyond these and djg deeper into how they could support their vision of themselves. The pivotal moment was the shift in mindset.  How would they hit those numbers by working collaboratively and professionally, in a way that made the experience pleasant for their buyers?  In other words, how could they achieve their vision?

They had to take their functional walls down and broaden their view of the world.  Their first goal was a perfect example of something they would never have thought of or agreed to in the past.  It was to set up cross-functional teams in each active community made up of front-line staff.  The team was to meet weekly to work through obstacles together.  They were to report outcomes and what they learned to the other community teams, as well as management, so that everyone could take advantage of new solutions.  It was also an opportunity for everyone to learn more about what happens in the other cars in the train.

Accountability

The team was eager to tackle everything they could think of, but I advised them to create only eight goals for the year, keeping in mind the primary focus of people development.   Each goal had a designated champion, someone who was responsible for setting it up and keeping it on track.  Since each team member had committed to be holistic leaders, I encouraged volunteers for whom the responsibility was not part of their regular function.  For example, the leader championing the community team initiative was the head of land acquisition – not construction or customer service, as might have been typical.

Re-entering the world was likely to suck people into the latest crisis, so it was critical that together they decide and commit to how they were going to stay on track with their new plan.  I helped them build an accountability structure that included action plans and monthly progress checks.  I called these “Feet to the Fire” meetings.  And to make sure the team didn’t lose sight of what they had created, I had them regularly evaluating themselves on how well they had followed the three guidelines they had set and how the new mindset was working for them, both of which they had memorized.

Before we wrapped up, the team needed to agree on what to communicate to the organization and how to do it.  There was some debate about whether they wanted the whole division to know what they had committed to, “just in case we can’t pull it off.”  All it took was for me to remind them about their commitments to each other, and they got down to work crafting a message and plans for communicating it on the following Monday.  The team decided to put their vision, values, lessons, new mindset, focus and goals on a wallet-sized, laminated card to hand out to employees, and they made several posters with the same information for all their sites.  Before long, every employee was familiar with the direction the division was going in, and we began to hear stories about how that changed the way they worked together.

The leadership team also sent messages to their regional leader’s team and to each functional head at Corporate about what they had done and where they were headed.  After a couple of months of greatly improved performance, there was a lot of buzz.  Other division presidents were saying, “We want what they’re having.”  In that short period, I led five other divisions through this same process.

The Future

Twelve months after that first two-day retreat, we reviewed the year.  Amazing progress had been made on several metrics.  Contract-to-delivery time had decreased by 18% and the number of open items for customer service had been reduced by over 40%.  Not only were these indicators very close to the extremely high targets set by Corporate, but the division also recorded the biggest improvements of any in the company, by far.  In fact, they won the CEO’s Award of Excellence for the year and every employee was invited to a long weekend party in a beautiful vacation spot, spouses included.  Why?  Every day the cycle was reduced for one home, the company reaped an additional $600 in revenue.  And the more complete homes were at delivery, the lower the expenses were for repairs, overtime and temporary living arrangements. At over 800 homes delivered in the year, these two changes alone equated to an annual $16 million to the division’s bottom line, an increase of 11%,

On the softer side, these leaders were still working very hard, but they were working smart and working together.  They had learned more about their teammates’ worlds, and along with that had come more trust, greater empathy and a willingness to collaborate for the common good.  They had become much more disciplined as a team, and they were doing more planning and executing than reacting and complaining.  They were asking good questions that helped them come up with great solutions.  Staff was following processes and surfacing concerns before they turned into big problems.  Collaboration at the lower levels improved.  Retention had gone up because people were seeing where they contributed to the division’s success.  It was a happier place to work.  Seven of the goals had been achieved, and the eighth was on track for completion in the next quarter.    It was time to make the next year’s plan.

*   This is a true story.  I have chosen not to identify the company to protect its anonymity.