There are a great number of excellent tacticians in our industry. We find them in the fields of advertising, public relations and social media, architecture and land planning, merchandising and sales training. Homebuilders flock to their seminars at the International Builders Show, they buy their books and, hopefully, they learn from these professionals what is new and exciting and what they can use to grow their own businesses. I have had the pleasure of working with a number of these very talented people over the years and consider many of them to be my friends.
The terms “tactic” and “strategy” are often confused. Tactics are the actual means used to gain an objective while strategy is the definition of the objective and the overall campaign plan to achieve it. In homebuilding, strategy is based on research and results in a written document given to the team members for execution. Without the strategy, those required to create and implement tactics are often like the six blind men asked to determine what an elephant looked like by feeling different parts of the elephant’s body.
The blind man who feels a leg says the elephant is like a pillar; the one who feels the tail says the elephant is like a rope; the one who feels the trunk says the elephant is like a tree branch; the one who feels the ear says the elephant is like a hand fan; the one who feels the belly says the elephant is like a wall; and the one who feels the tusk says the elephant is like a solid pipe.
And, as the wise man suggested in the original Jainist version of this tale, all of them were right to the extent that they understood their specific part of the elephant. But what they could not comprehend was the totality of the creature and how the parts interacted. And the same is true for the tacticians in the homebuilding industry. Without an overall strategy, tactics can only address individual parts of the task and are therefore usually doomed to failure.
Housing demand cannot be created; all we can do is manage and, hopefully, satisfy the existing demand. To create successful residential developments we must design communities and homes that are optimized toward satisfying that demand which is quantifiable by location, by price, by lifestyle, by product type(s) and uses, by buyer profiles and by rate of absorption.
We must research the market, the competition and the players and, based upon analysis of the research, create a strategic development program that defines the target market, establishes the Unique Selling Proposition, and sets the parameters from which the tacticians work their magic to make the concept a reality and a success.
Warren Buffett is reported to have said, “It’s only when the tide goes out that you learn who’s been swimming naked”.
Without an underlying strategy, it’s very easy to see who the builders and developers are who are swimming naked. But that’s just my opinion.
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