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Tara's Rule of 5 to 7 Things........




By Noelle Tarabulski, CEO, Builder Consulting Group

 

By my count, there are over 150 ways to improve a home builder’s profit. This is just one.

 

(Editor's Note: My nickname by a few close associates is Tara.)

As a business person why should I understand the Management Rule of 5 to 7 things? Typically catastrophic events can be avoided if a business person is aware of the Rule of 5 to 7 things.

After discussing my theory and observation that most disruptive events could be prevented if managers or people understood Tara’s Law.

As I have traveled across the nation and having worked with over 400 building companies in some fashion, I have observed that when things happen in a significantly good or bad way (on a business or personal level) you can find the reasons why if you back track from the final event (aka lessons learned).

Unknowingly, unrelated events, or a series of decisions or actions often lead to the positive or negative result. I also realized that many times if I alert the builder or risk taker to the path they are on, they can proactively be ON ALERT.

Take this observation and it apply it to your life or business decisions and consider the argument I am making.

This all ties into the concept of continuous improvement because a lack of correct action or decision making typically contributes to minor flaws that often deteriorate to the point of a highly unfortunate event.

This law plays out in many ways, but in home building this can manifest in the bust of a scheduled closing, or the delay of a significant loan closing, or the injury of an employee on the job, just to name a few.

In life experiences it can lead to family disruption, raising kids, and health related emergencies.

This scenario might seem familiar to a few of you. Here is how a closing can be missed due to a series of events, if you as a leader, are tuned into the potential of the Tara's Rule of 5-7 Things coming into play, you can proactively prevent busted closings.

Here is an example of the potential events that add up to a failure to get a desired result in housing (the rule of 5 to 7 exposes things that do not seem relevant at the time BUT ARE :

1.      The closing coordinator is on a 3 month maternity leave, thus a substitute is in place.

2.      The substitute feels she knows everything she must do, and is shy to ask questions. No one checks on her.

3.      The Field Super has the substitutes cell phone, he has her email as well but it has an error in it. He does not realize she is getting his messages but not his emails.

4.      The builder typically gets a CO (Certificate of Occupancy) in place 5 business days before closing, but the Field Super was not told this matters due to various regulations that take time to meet and it assures closing can happen. He is covering for the regular Super who turned his ankle on a 2 x 10 that was not stacked correctly by the framer.

5.      All is going nicely, but 3 days out the super realizes he has a problem with the final plumbing inspection due to a rain storm that flooded a trench (that should have been back filled but the plumbers equipment broke) and caused water to run into the basement because the conduit was not seal and caulked. (They completed work that had to be redone due to an earlier error.)

6.      The super is then up against the closing date, as he cannot get the CO , if it had not rained he would have been all good as they say (in the short term).

7.      The team still believing they can get the CO 2 days before close, push hard to make the plumbing inspector happy.

8.      The plumber is stretched out so they send a newbie plumber to the site to resolve the issue, he fixes it, but he manages to run to the basement only to track in mud and of course scratch the hardwood floor. He leaves quickly as his boss is chewing him out to get to the next job.

9.      They overcome the plumbing inspection, get the CO.

10.  Now the buyer is scheduled to come to the house to do the final walk the day before close, the super does not realize what the plumber did as the super knows to go in by the back door slider which is right next to the basement door.

11.  The buyers and New Home Ambassador are completely bummed, as the first thing they see is mud and scratches on the hardwood floor as they open the front door.

12.  No one is happy. The rest of the house is PERFECT.

13.  The buyers now want to exercise their clause (that is still in effect) to secure an inspection by a 3rd party. They have lost faith in the honesty of the builder.

14.  That will take 48 hours. The closing is to be on Friday, not anymore.

15.  Closing moved to Wed. at the earliest.

16.  Builder is in negotiations to get it done. They do close on Wed. Cost to builder for carry costs, hotel and moving van issues, calming down the buyer is $3500 right out of the builders margin. Oh yes of course, they get a free Whirlpool Refrigerator.

Can you relate???

What to do? When your leadership intuition kicks in that some training or communication issues may disrupt the flow, then jump in early to prevent Tara’s Rule of 5 to 7 things. One of my favorite things to recap such events is “You cannot make this up!”. This is my story and I am sticking to it!!

IF YOU NEED SOME QUICK SOLUTIONS TO SOME MANAGEMENT ISSUES CHECK OUT MY PRODUCTS ON THIS LINK, SPEED UP IMPROVEMENTS IN YOUR COMPANY:
https://buildertools.com/management-tools/

Home builders and developers are the backbone of this country. They work hard, take risks, and create more wealth for society than any other sector of the economy. If you are a home builder and concerned about your results - you can do better! If you want to find out more, call me at 303.525.4944 or email me at noellet@buildertools.com and LinkedIn is a great place to find out more about my credentials, background, and references.

My first three questions when you call are usually:

1) How many units do you sell per year?

2) What is your average sale price range?

3) What is your projected net income for the current year?

https://www.linkedin.com/in/noelle-tarabulski/

Copyright © 2019 Builder Consulting Group, Inc., All rights reserved.


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