BSC Summit

Wednesday, June 7, 2017

Changing the Fundamentals of Modular Housing's Future

In the past, especially after the 2008 housing crash, it made sense for modular factories to lay off employees and cut costs to a bare minimum because we knew things would take time before they would get better.

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But today we live in an age where everything moves much faster. Characteristic of this age is more frequent up and down swings, meaning we are no longer effective in solving our challenges. The modular home industry can no longer go into hibernation to await an upswing or to take action. The time for action is now.

Two things that are not taught in business schools are flexibility and adaptability to change. Schools continue to teach the same models that perhaps never really worked to begin with. It is clear that they certainly are not working now. Instead of engaging in massive layoffs during quiet times, companies need to innovate, train, reorganize, and build new strategies and scenarios. Perhaps most important of all, modular factories need to empower their builders to help solve the challenges that impact short term and long term plans.

Start by Involving Your Builders

The biggest mistake modular factories make is to not involve their builders in innovation. The innovation game has become so fashionable that it is tempting to keep other people out. Such an attitude is an abuse of the true social meaning of innovation. It is about ownership, and ownership is not just about possession. It is about the modular home builder’s access to the proper assets and tools and to the best possible processes, within the proper context at the proper time. It is about finding meaning in what builders want, in serving them through providing products and services created together in a way that meets their needs. The power of modular home factories is not about providing more value to builders.

The biggest barrier factories have involving builders in the process since many of them use several modular factories and they might share innovative ideas with other factories. The advantages to including builders in the innovation game are loyalty, savings, learning and less vulnerability.

The New Modular Innovation Game

Innovation is mandatory now. If you go back in history, the best innovations came in times of crisis. In the words of Clayton Christensen, "in an environment where you've got to push innovations out the door fast and keep the cost of innovation low, the probability that you'll be successful is actually much higher...Breakthrough innovations come when the tension is greatest and the resources are most limited. That's when people are actually a lot more open to rethinking the fundamental way they do business".

Innovation should become daily practice for everybody in the company. Unfortunately, in many companies some of the people with the best ideas are the ones who are never asked, like the builder, or the factory’s employees, or even your builder’s customers. We don't ask those people because they aren't the innovation director or the expert. Innovation is about empowering every single person to come up with ideas that are meaningful and relevant to any given need and challenge. Admittedly, not everyone is good at this, but we were all born creative.

Leadership Makeover

Many modular housing leaders are trained in a way that no longer fits the world we live in. Industrial Revolution models don't work in today's information and communication age. Leaders have to stop thinking of their factory as a top-down structure and must acknowledge that organizations can no longer work in isolation, particularly in the area of information communication.

We are facing a new paradigm in our way of interacting with information that requires new approaches and new tools to filter through what is and what is not relevant. New business information and communication tools have to facilitate workflows that capitalize on using collaborative intelligence.

Leaders must acknowledge that uncertainty is a fact of life and that it is impossible to deal with it without enabling builders and others to join in. We need to learn how to engage the right people in the process and to enable a new collaborative mindset that encourages growth and sustainability in times of change.

Speeding Up the Process

One of the significant impacts of rapid communication through the Internet is our ability to obtain information rapidly, everywhere and at any time. There are two key implications of this impact. First, builders and their customers become more knowledgeable about products and services. Their knowledge provides them with more negotiation power. As a result, they are not just buying or not buying. They are now demanding particular types of services and are willing to become part of the process.

Second, the two economic crises in the last ten years made people skeptical about the way businesses operate. They now demand to be in control, to be part of the design process, and part of developing the services and products that are being sold to them. In other words, they no longer simply accept the traditional push of offerings from companies. Instead, they are the ones pulling by increasingly demanding more meaningful and sustainable goods and services.
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Conclusion


Today the modular housing industry is at a major intersection. Continue going straight down the road we’ve been on and risk becoming a smaller % of new home construction or take the tougher road that heads into the mountains joining with others that share the innovation game and perhaps reaching the high point where the view of the future looks good for the modular housing industry.

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