Judgment Calls. Thomas H. Davenport

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СКАЧАТЬ parties and picnics throughout the year for the neighborhoods it has built. Brookmeadow Village is located on one hundred thirty acres and includes a small retail complex, seventy-five acres of open space, and over two miles of walking trails leading down to baseball and soccer fields. All houses are Energy Star certified—Burrill's first development with that qualification. Overall, the selling of the project has gone well given the difficult economy; over twenty homes have been built and sold—including one to Erica Burrill and her husband.

      The House That Wouldn't Sell

      Despite the success of the project overall, one of WGB's spec houses in Brookmeadow Village sat unsold for much longer than the usual period. Priced at about $550,000, it was a substantial investment to carry for a family firm. WGB had tried something new with this particular home, but given what Burrill knew of changing demographics and customer preferences, it seemed like a safe bet. But if so, why wasn't it selling?

      A nonselling house is an occasional but important problem for a small business like WGB. The way the company tackled the challenge reflects perhaps the most core element of great organizational judgment—pursuing a decision through an iterative process of problem solving. But the way it did that also reflects the special culture and leadership style of founder Greg Burrill.

      Burrill's sales staff heard regularly from empty nesters and couples with older children that they enjoyed the community feel of a suburban neighborhood, but had different needs than young families. The wish for a master bedroom on the first floor came up repeatedly. Besides anticipating the day when they would not want to climb stairs so frequently, many customers thought the aging of the baby boom generation would give such houses high resale value. So WGB designed this house—called the Oxford—with a first floor master suite. It also had three other bedrooms upstairs, and a relatively small backyard—again, for baby boomers who don't want to spend all their time cutting grass—that looked out over forested land.

      And indeed, interest in the house was high. But despite a significant amount of traffic through it, after six months it hadn't sold. At that point, Burrill worked with his sales office to figure out alternative ways to market the house, and also reduced the price a bit. That brought even more traffic—but months later, still no sale. Clearly the location was not the issue, but was it the lot size, or the price, or something about the design?

      Burrill thought systematically about what he could change in the house. The lot size was fixed. He'd already lowered the price a bit, and lowering it further might reduce perceived values of all the other houses and lots in Brookmeadow Village. He leaned toward the design as the problem. Two other houses in the Grafton area with similar designs, built by other local builders, weren't selling either. Yet changing the design would be difficult, so he needed more information.

      Sourcing the Wisdom of the (In) Crowd

      Burrill had faced similar situations before during difficult housing markets, so he knew what to do. Whenever a house doesn't sell, he calls on the wisdom of the crowd. The crowd, in this case, is anyone who might have an informed opinion on the issue, including:

       His wife and the family members who work for the company, including his brother, his two daughters, and his son-in-law

       The other twelve or so employees of WGB Homes

       Subcontractors who have worked on the house and on others in the development

       Customers who purchased other houses in the neighborhood

      Burrill asks everyone who's seen the house to furnish opinions about how to improve it. “Everyone is a designer or an architect at heart,” he says, “so why not learn from them?” Most are happy to volunteer a perspective. At times Burrill has even undertaken larger-scale surveys of customers; his firm recently surveyed about four hundred customers, for example, about issues around the sales process and their perceptions about WGB's model homes.

      Burrill had always been interested in other people's ideas about his houses, but as his business has grown, and as his own family members have become more involved in it, he has realized that the insights and opinions of everyone involved in building and selling the houses are extremely valuable. “I try to surround myself with people who are smarter than I am,” he notes modestly, “and I get as many opinions as I can. But then I have to make the decision.”

      The Group Discussion

      After the solicitation of multiple opinions, Burrill assembled a meeting of WGB family members, aiming for some collective decision making. Everything people had heard or thought was put on the table. Some of the informal advisers who had toured the house thought there just weren't as many boomer buyers as Burrill had counted on. Comments by younger families who'd been turned off by the first floor master were recalled.

      Burrill's daughters, Erica and Vanessa, who handle sales and marketing for him, had also picked up signals from older couples. It seemed that while those target buyers might imagine they wanted a first floor master, when it came down to buying, they ended up purchasing what they were used to—especially when the trade-off sank in, that they would lose space on the first floor to entertain. “Half my first floor would be the master bedroom,” one buyer commented. Erica and Vanessa recalled several instances where they would have people who were very interested in the Oxford model and then decided to buy a second floor master from them—or worse, a second floor master from another builder. It led Burrill and his family to believe that as much as a first floor master is what buyers said they wanted, their buying habits reflected otherwise.

      By the end of the meeting, the team had concluded that the floor plan was the problem, and had come up with ways to improve it. The specific changes to the house involved adding a bathroom to the second floor and expanding an area over the garage to accommodate it. That made it possible for parents with small children to have their bedroom on the second floor and then move downstairs at whatever point they chose. At any stage, the second “in-law” suite could be put to good use. Burrill also improved the view from the back of the house by changing some windows, and expanded the entertaining space by opening up the kitchen to the family room. The downside of making multiple changes at once is that you never know exactly what leads to a successful outcome. But Burrill had no time for academic experiments involving only one change.

      The implementation of the agreed-upon changes by Burrill and WGB was also a lesson in organizational judgment. The prospect of reversing a decision that wasn't working out wasn't as painful as it would have been for many companies. This is because WGB practices what is called, in other industries, late configuration. Just as Benetton once used white yarn to produce sweaters, and only dyed them after retailers placed orders for specific colors, Burrill completes only the outsides of houses on landscaped lots for the spec houses he builds. This allows the buyer to specify interior details to their tastes, and WGB can complete the home after it's bought in as little as thirty-two days. The fact that the houses aren't fully completed also makes it feasible to alter the unfinished frame more substantially—as WGB needed to in the case of the house that wouldn't sell.

      The Outcome and the Embedded Learning

      The changes seem to have worked. A baby boom couple bought the house a few months after the redesign—even in a difficult housing market. The couple responded well to the design and expanded the house even more by having WGB finish off their basement. Some of the features that they liked most about the house were ideas that had been generated and implemented through the participative decision-making process.

      The two other houses in the area with first floor master СКАЧАТЬ