OutThink - The Outhouse Blog

The Outsource Hub for Home Builders

OutThink

Create a Positivity Bias


By

The Better Thinking: Think Better. Be Better daily emails from Ronda Conger at CBH Homes have become an integral part of my daily routine. Her series of simple quotes that pack a considerable punch compels me to begin each day focusing on what is truly important. If you don’t follow Ronda or have not had the opportunity to hear her speak, you are missing out on a great source of positivity. She is a big personality and a tremendous inspiration to the home-building community and others. Her insights come from thought leaders representing diverse beliefs and cultures, including famous people, motivational speakers, respected brands, spiritual gurus, and many others. The one trait they all share is a love for life. Today’s Better Thinking quote as I write this post is by another big personality:

Surround yourself with only people who are going to LIFT YOU HIGHER. — Oprah Winfrey

Oprah knows well the importance of surrounding yourself with people who are going to lift you higher. We see the ups and downs of her life play out in the public eye. We also see that every time Oprah faces adversity, she triumphs, returning greater and stronger with the help of others.

Another recent quote from Better Thinking comes from one of the most prolific athletic footwear and apparel corporations in the world, encouraging us to always strive for excellence:

BETTER IS TEMPORARY. At Nike, the desire to be the best is a journey, not a destination – better is always temporary.

Equally important is seeking out peace and happiness. Take this quote for example from the Zen Master who Dr. Martin Luther King, Jr. called “an Apostle of peace and nonviolence” when nominating him for the Nobel Peace Prize : 

If in our daily life we can SMILE, if we can be peaceful and happy, not only we, but EVERYONE WILL PROFIT FROM IT. ––  Thich Nhat Hanh 

The power of positive thinking can never be overstated. After a relatively slow July here at the office, I was thrilled to see this empowering message welcoming August:

Hello August,

This month, EXPECT TO BE VICTORIOUS, expect to win, and expect to shine.

To that, I say, “Go, August!”

There are so many nuggets of wisdom in the Better Thinking series that it is difficult to pick a favorite. One of the most meaningful in recent weeks is on creating a positivity bias. Daily affirmations like the one below provide a boost of energy and foster a mindset of success. I find this especially helpful on those days when getting out of bed feels like a chore.

CREATE A POSITIVITY BIAS. Purposefully start each day on a positive note. As soon as you awaken or your feet hit the floor in the morning, start the day by saying…”Today is going to be a great day” out loud. — Dr. Daniel Amen

If you have seen the award-winning Broadway musical DEAR EVAN HANSON, you know Evan does his own spin on this quote each morning. The show’s storyline might be a little silly, but the music is uplifting, and the overarching message about fitting in and finding our place in the world appeals to us all. Evan is a teenage boy on the spectrum, which means facing more significant challenges than most. Rattling off a short list of positives, he begins each day with:

TODAY IS GOING TO BE A GOOD DAY, AND HERE’S WHY… — Evan Hanson

As summer vacations come to a close, kids are heading back to school, offices continue to reopen, and live events and trade shows are resuming once again for home builders and related trades and sales and marketing professionals. These include the International Builders Show (IBS), Pacific Coast Builders Conference (PCBC), Southwest Builders Show (SWBS), and the Home Builder Digital Marketing Summit which we will co-host with Blue Tangerine early next year. There are a lot of unknowns ahead. Tempering the excitement of seeing business friends and colleagues in person is a bit of trepidation as new Covid variants come our way. Greater uncertainty may be the “new normal,” so I appreciate the stream of motivational messages from Better Thinking and other sources. Taking their message to heart, I plan to proceed with a bit of caution but also a massive dose of positivity. Today is going to be a GREAT day, and here’s why…!

Visualization Sells


By

Lessons Learned from Zillow + a Trip to Croatia

A mural at the market in Zagreb, the largest city and capital of Croatia.

With its ancient towns, incredibly detailed architecture, and pops of color, the country of Croatia a sight to behold.  If you haven’t been, this is one place that should be on your must-see travel list.  The country is a visual feast, and the great walled cities like Dubrovnik and Split are spectacular! As you sail along the Dalmatian Coast and between the islands dotting the Adriatic Sea, the first glimpse of each city or town reveals a mass of limestone buildings with terra cotta tile roofs.

Korcula Island, a historic fortified town.

Although a bit similar, each is wonderful and breathtaking in its own way.  Color and texture play a vital role in bringing out the unique personality of each island and the coastal area in general.  Fantastic murals, light installations, brightly painted pottery, and fun, colorful yachts and boats stand in sharp contrast to the deep blue sea and off-white buildings.  “A picture paints a thousand words” certainly applies to this amazing country, and that is why Croatia draws travelers from around the world.

Imagery and Engaging Tools are Vital to New Home Sales

The same holds true for your homes when it comes to painting a picture for potential buyers. Describing a “beautiful bedroom with tray ceiling and a pair of windows” is one thing. And then there is this rendering.

Which bedroom is most appealing to you? The one in the description, or the one in this beautiful rendering?!

A recent report by Zillow shows nearly half (49%) of new construction buyers under age 40 (Gen Z and millennials) say they feel very or extremely confident about making an offer on a home solely after seeing it virtually.  The same holds true for 36% of buyers between the ages of 41 and 55 (Gen X).“

2020 brought some unique challenges to the home building industry. With Americans staying home in droves, builders were forced to rethink online marketing strategies. As the abundance of time people spend online continues in 2021, we see a growing contingent of sophisticated buyers who are making most purchases online; and retailers are spending billions of dollars engaging them.  When it comes to their search for a new home, these same buyers seek out and expect a similar, interactive experience.  Outdated 2D renderings and static floor plans are not enough to capture their attention. They are looking for tools like Interactive Floor Plans (IFPs) and Interactive Site Maps (ISMs). These tools are incredibly engaging and build emotional connections, especially the IFPs with their furniture planners, pricing tools, and structural options selectors. Statistics show that home buyers spend 2-3 minutes on the typical builder website. This time increases by 13-20 minutes, on average, with an Outhouse IFP.

Click to engage the Outhouse Interactive Site Plan and Floor Plans.

Statistics show that home buyers spend 2-3 minutes on the typical builder website. This time increases by 13-20 minutes, on average, with an Outhouse IFP.“

Also playing a huge role in online sales are virtual tours and animations, which allow home buyers to walk or fly through homes not yet constructed. These can be so lifelike with running water, crackling fireplaces, and more, they may even look better than the Matterport tours of your model homes. A massive benefit to builders is the cost, which is substantially less than building and furnishing a model.

Click to see our animation in action – bubbling fountains included!

Virtual Tours and Visualizers Bring Maximum Engagement 

Kicking it up a notch are interior and exterior Visualizers, enticing home buyers to select color palettes, materials, and finishes for their new homes.  In addition to clear, vivid images, the Outhouse Visualizer offers builders the choice between predetermined color schemes and a la carte selections.

Yes, model home traffic will gradually continue to grow, but the move to greater interaction online is here to stay. The pandemic has accelerated the widespread acceptance of new technologies. Even people who typically are later adopters have learned to use and appreciate the convenience of interactive online tools (can anyone say Zoom!). Visualizers, Virtual Tours, Animations, Interactive Floor Plans, and Interactive Site Plans are crucial for builder websites. All of these tools are designed to capture buyers. They market and sell your homes from anywhere in the world, even when your sales centers are closed.

Pants Optional – Episode Three: Policy Updates


By

Pants Optional is a series focused on advice to company Owners, Managers and Employees on how to be successful in a Work-From-Home business model.

…Clients complained they could hear children in the background of a call. After 2020, that complaint no longer exists.

Some Outhouse, LLC employees have been working from home since 2018, long before a global pandemic made ‘WFH’ a common and recognized acronym. Since then, can you pick which of these Work From Home policies have been updated, made obsolete, or remained the same?

  1. Childcare must be provided in the same manner you would if you worked in the office.
  2. Present yourself in a well-framed, well-lit, organized, professional work environment for video calls.
  3. Dress as you would if you were coming to the office.

When a business model changes, so must policy. The bigger the change, the bigger the adjustments, and no doubt moving to a WFH business model is one of the biggest changes a business can make. If you are an in-office company and you have an employee handbook, read through it and you will quickly identify policies that will need to be added, updated, or eliminated. If you have already moved to a WFH model, you are likely finding the updates you made in the beginning are again requiring updates. Below are only a few of what I have discovered.

1. Childcare Policy

During the summer of 2019 I received a call from a client complaining they could hear children screaming and fighting in the background during a call with one of our managers. The client knew this manager worked from home and was fine with that but “…hearing children in the background was very unprofessional”. I have received similar complaints about dogs barking or cats randomly walking across someone’s desk. I wholeheartedly agreed with the complaints and I promptly called the manager and reminded them of policy #1 and was assured, by the employee, it would not happen again.

Then, well… 2020 right? Schools and daycares were shut down and the entire world changed. You know the story.

Since 2020, you may or may not be amazed how people’s attitudes have changed and relaxed around what would be considered unprofessional disruptions. The complaints I heard in 2019 have all seemed to fall away completely. “Walk a mile in another person’s shoes” as they say. What was once an irritation during a call or virtual meeting has become fodder for empathetic banter, often helping build a stronger rapport between the company and client. In a large Zoom meeting, what might once have caused embarrassment and apologies when a dog comes in and persistently nudges someone’s elbow for attention now elicits an explosion of laughter from the entire audience. Why? Because nearly everybody in that meeting is at home with a dog, cat, child, or adult that did something equally or more embarrassing to them last week.

For our company, the day schools and daycares shut down, the childcare policy temporarily became obsolete. Today, it is mid-2021 so the policy is still unenforced but will one day likely be back when it’s reasonable to do so.

2. Video Calls Policy

Let’s be real. When you are on a video call, we all can’t help but check out what is in the other person’s room or on their walls and JUDGE them for it; and believe me they are doing the same to you! When I am on a video call with anybody; employee, client, vendor or even watching a webinar, I would cringe when I see something that that doesn’t meet the standards I set for myself in a video call. It is different for everybody, but a small list of cringeworthy examples I have personally seen are:

  • Meetings in someone’s bedroom.
  • People are a dark silhouette because of a bright window behind them.
  • Their head is in the lower half of the frame making it look like they are sitting at the kiddie table.
  • Empty Amazon boxes piled behind them.
  • TV’s on in the background.
  • A kegerator! Yes, I’ve seen it and to be honest, I did not cringe; I was impressed!

For many companies, gone are the days of impressing clients or customers with a fancy, professional office. Even if you have an office, today’s technology makes it easy to simply stay at home or anywhere when it comes to meeting nearly anybody. Therefore, what a person sees behind you becomes representative of not only your company, but also you personally.

I was very strict regarding what was seen in the frame of video calls. I was hyper-aware of what was behind myself as well. That has all changed now. Since the addition of virtual backgrounds in the two platforms my company uses, Zoom and MS Teams, it no longer matters what room you are in or what is behind you. Our policy has been adjusted that if you do not have a professional physical background, that you use an appropriate virtual background. It is also important that you are still well lit and properly framed; but having a cat using the litterbox behind you is no longer against policy when using a virtual background.

We also have more leniency with virtual backgrounds allowing employees to express more of their personality if it is tasteful. For meetings with clients, they can use a company branded background or the command deck of the Starship Enterprise if they choose. When it comes to internal meetings, we are even more lenient, bordering NSFW.

Here are my favorite backgrounds for INTERNAL meetings. Email me at stuartp@outhouse.net and I will be happy to share them with you.

3. Dress Code Policy

This is the policy that has not changed. Granted, we never really know what people are wearing below the waist, but up top needs to be presentable. At Outhouse, our dress code is already business-casual, leaning more to the ‘casual’, but at home people can take that to a whole new level. Regardless, every employee is a representative of the company so what they wear matters, and the leadership needs to communicate that.

More importantly, the positive impact of dressing appropriately is becoming more and more apparent. Maintaining the same routine at home that you had going to the office gives you a sense of normalcy, helps keep you focused and productive, improves your self-image, and even helps separate work-life boundaries.

When you used to go to an office, if you showered every morning, continue doing so. If you changed your clothes after coming home from work, continue doing so. Maintaining separation from work and home, when they are one in the same, is critical… but that’s another blog.

The good news is most policies only require minimal updates moving to a WFH model. To add to that, there is an abundance of new online WFH resources that did not exist before 2020. Google search is your friend and many new professional services and apps have been developed specifically for WFH companies. This past year has seen an explosion of WFH advancements, and I predict it is not going to slow down any time soon.

About the Author: Stuart Platt, Managing Partner at Outhouse LLC restructured his 25+ year company to an Office Optional (OffOp) business model in 2018. Stuart’s version of the OffOp model enabled the company of nearly 40 employees to downsize its physical office from 14,000sf to 6,000sf. Based in Phoenix, local employees desiring to work in the office for a few days, weeks or months can reserve any open desk whenever they want. The remaining employees work from home, fulltime across 10 different states and counting.

PREPARING FOR THE OKR JOURNEY


By 






A five-part series: 1. Introducing Objectives & Key Results (OKRs), 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs.





Summarized by Bill Gelbaugh from: Objectives and Key Results by Paul R. Niven and Ben Lamorte, with additional material from Measure What Matters, Lattice OKR 101 and Perdoo.





THE PLANNING PHASE





Ready to get started with Objectives and Key Results (OKRs)?  Part one of our blog series discussed why your company might want to adopt OKRs.  Our second post is all about planning.  As with any new venture, a little preparation goes a long way in ensuring successful implementation.   It is also vital to note implementation is a journey, not an event.  This guide is written to help home builders, trade contractors, suppliers, architects, engineers, and others in the housing industry adapt OKRs to your company’s culture.  We are all unique, and most of us do not have a Silicon Valley mindset, so adaptation is key.  There are some basic questions though that every company should begin with to get started on the right path:   





Who is Going to Champion OKRs?
There must be a sponsoring executive (and team) who feels passionate about and committed to your company’s OKR strategy roll-out. It’s important to understand that no initiative will survive without first having this executive sponsorship.





What is the Most Critical First Step?
A critical first step is to have your team buy into and support any OKR program. Then comes a deeper dive into the OKR framework, philosophy, goals, and vocabulary. Note: you should have a deep enough understanding to review OKRs with your team by the end of this series.





What Matters Most?
OKRs should always solve specific critical business issues you face now. OKRs demand that you isolate the most fundamental priorities and dedicate your focus to that limited subset of variables involved in running any company.





How Will We Create Transparency?
OKRs should ideally be transparent throughout the organization, meaning everyone can see what others measure and provide feedback and input. This transparency fuels collaboration, alignment, and ultimately the execution of strategy.





How Will We Live our OKRs?
The real power of the OKR system is figuring out how to live OKRs every day as a team. OKRs are best achieved if they are baked into the company’s daily, weekly, and quarterly cadence, from initial planning, to status updates, to company dashboards.










THE DEVELOPMENT PHASE





Once you have answered these questions, here are the concrete steps you’ll take to create your first OKR or set of OKRs and review initial results. Your development plan will, of course, depend on where you decide to start initiating your OKRs. For this discussion, we’ll assume you’re going to begin with a set of OKRs at the corporate level only. 





Develop or confirm the mission, vision, and strategy: Your OKRs should be translated from your annual strategy, drive the achievement of your vision, and be in alignment with your overall mission. These are critical enablers of success and, as such, should be solidly in place before you begin.





Create your corporate-level objective(s) and key results: There are several options for this step: using a small team, gathering input from employees through surveys that will later be used in a workshop, or conducting executive interviews, or simply drafting objectives during a leadership workshop.





Present OKRs to the company: We suggest using multiple media here: Share electronically, post to your intranet, and most importantly, communicate in person (perhaps at an all-hands meeting) so that you can facilitate a dialog surrounding the OKRs you chose and why.





Provide OKRs education: We’ve previously noted the seductive simplicity of OKRs, and that ease of understanding will often prompt organizations to skip this vital step. However, consider this education with a capital E, during which you’ll not only provide fundamentals on the model but share why you’re choosing to use OKRs now, success stories from other firms, and what people can expect during the journey.





Plan to monitor OKRs: You don’t “set and forget” OKRs; you must monitor them with an OKR Scorecard using a quarterly, monthly, and weekly schedule (or whatever cadence you choose).





Report results at the end of the quarter: Score your OKRs and communicate the entire organization’s results. As with everything discussed above, we’ll return to this topic with much more information later in this series.





THE STRATEGY ALIGNMENT PHASE





OKRs should never be created in a vacuum but must reflect the company’s purpose, desired long-term goals, and plan to defend market space successfully. In other words, they should translate your mission, vision, and strategy into action.







Company Mission
A mission statement defines the core purpose of the organization, its raison d’etre, why it exists. The mission also reflects employees’ motivations for engaging in the company’s work.







Consider your mission to be the compass by which you guide your organization.





Unlike visions and strategies that may be achieved over time, you never really fulfill your mission. It acts as a beacon for your work, constantly pursued but never quite reached. Consider your mission to be the compass by which you guide your organization. Having a clear mission and aligning OKRs—monthly, quarterly, and yearly—helps ensure that work performed in the short term meets the long-term purpose of the organization.





Long-Term Vision
A powerful company mission determines your core purpose as an organization. Based on the mission, you now require a statement that defines more specifically where we want to go in the future. The vision statement does just that, signifying the critical transition from the unwavering mission to the spirited and dynamic world of strategy.





Without a clear and compelling vision to guide all employees’ actions, you may wind up with a workforce lacking direction.





A vision statement provides a word picture of what the organization intends ultimately to become—5, 10, or 15 years in the future. This statement should not be abstract—it should contain as concrete a picture of the desired state as possible and provide the basis for formulating annual strategies and OKRs. Without a clear and compelling vision to guide all employees’ actions, you may wind up with a workforce lacking direction and thus unable to profit from any strategy or OKRs you create no matter how well-conceived.





Annual Strategy
An annual strategy is critical to your OKRs as it provides the initial context for creation.





All OKRs should be directly translated from your strategy—your game plan for successfully creating or defending aggressively contested market space.





One huge benefit of OKRs is the power of, “NO.”  A core strategy supplies boundaries, helping you determine what not to do when faced with a sea of opportunities, which is every bit as important as deciding what to do. It also enables you to choose viable options, remain focused, align your entire organization, and make necessary commitments to execute. Your strategy development should answer the questions: What are our preferred markets? Who are our optimal customers? What are their most critical needs?  By answering these questions, you will be able to set OKRs that move your company forward in a meaningful way. 





Ready to get started developing your OKRs?  With your company having a clear picture of your most critical objectives, and how you will successfully adapt OKRs to fit your corporate culture, you are now ready to act!  Our next post is all about crafting great OKRs. 





Next up… CRAFTING GREAT OKRS! 







Bill Gelbaugh is one of our Senior Partners here at Outhouse and champions our OKR efforts.




How A Professional Builder Prices A Building Contract


 
 By   







If you are adding a margin to the cost of materials and labour in order to calculate a contract price…then stop right now.





Your building company is in serious danger of losing money, especially if you plan on growing.





The traditional method of pricing jobs is to apply a margin to the cost of sales.





The problem with this method is that you are hoping you will make enough profit to cover your overheads and wages.

Building companies with revenues of less than $6m DO NOT enjoy the same economies of scale as traditional businesses like manufacturing or retailing.





This results in builders making little, or no net profit at the end of the year, despite taking on more work and increasing their revenue.





When a building company grows, their net profit margin decreases…





Even when they don’t reduce their margin, they can still end up losing money…





How is that possible?





The problem lies in the method they are using to price their jobs.













Most builders add a nominal markup of say 20% to their cost of sale which gives them a contract price to charge the client.





The problem with this strategy is that it doesn’t always cover the running costs for the business.





Where Most Builders Go Wrong





In fact, when it comes to quoting a larger project, most builders actually reduce their profit in order to win the job when in fact they really need to be increasing the margin to cover the additional running costs.





It’s the reason why you hear so many builders say they were earning more money when they were doing less jobs.





It’s also the reason why so many building companies run into cash flow problems.





And it’s why so many builders end up with nothing to show for decades of hard work.





The good news is that there is an easy solution to the problem.





Building companies need to price their jobs using a net margin instead of gross margin.





When you apply a net margin to project you are guaranteed to make a profit.





But when you apply a gross margin to a project, you are simply hoping to make a profit…





And that’s fine when your turnover is at a consistent level…





But when workflow increases and additional resources are taken on, the amount of fixed costs, as a proportion of the contract price also increase.





When that happens you have 3 problems.





First, you don’t know what your break-even point is.





Second, although you are increasing your cash reserves, if you are not making a profit then you’re creating a hidden liability that will get bigger and bigger, a bit like giant Ponzi scheme.





And third, you’ll probably end up cutting margins in order to win more work, which only compounds the problem and increases the hidden liability in your building company.





It’s a bit like the Federal Reserve Bank in the US, only no one will be bailing you out…





But you may get prosecuted for trading insolvently…





The reason it is so important to grow a building company profitably is because the retained net profit provides the foundations to support a growing business.





Without retained net profit you are effectively building a house of cards that will fall over in the next market downturn.





To learn more, download the Professional Builders’ Secrets To Increasing Margins.





Click on the link below to download for free now.










Submitted by:







Russ Stephens
Business Strategy Specialist & Cofounder of the Association of Professional Builders

Since 2014, Russ has been helping builders double the size of their businesses through profitable growth. He is a data analysis expert that has introduced data-driven decision-making to the residential construction industry. Russ calls on 38 years of experience in business as well as the lessons that had been learned from working closely with some of the most successful custom home builders in Australia, New Zealand, Canada, and the United States.