In 2009, Jason Adams wasn’t sure what was next. The thirtysomething entrepreneur based in Bend, Oregon had already built up a successful land development business, but the area had just been hit with a housing crash, turning Bend into one of the fastest depreciating real estate markets in the country.
Adams watched 90-95% of his fellow real estate speculators leave the market. Most of them to declare bankruptcy, while some fled the country to escape their creditors, and a few, sadly, even chose to take their own lives. As he stared at his own heavy debts, Adams knew what his attorney would recommend—declare bankruptcy and move on. But he wasn’t going to do that. Driven by a strong commitment to his hometown and a duty to pay back his loans, he continued in what, by all indicators, was a dead market. Besides, real estate was in his blood. His mother had been a real estate agent for nearly 35 years, and his stepfather had spent the greater part of his life working in property management.
This is where he wanted to be.
For a few years, he stayed afloat by buying, fixing up, and reselling foreclosures and homes that hadn’t been finished by previous builders. Around the same time, he noticed that there were only one or two builders left in Bend. His project manager pointed out that it would actually be easier to build homes from the ground up, than to fix the issues of previous builders. He decided to build a new home that same year, which sold quickly, and was pleasantly surprised when he built three more the next year, and 11 the year after that. Before he knew it, he had unintentionally become a home builder, the CEO of Arbor Builders.
As a relative newcomer to this industry, he met with other builders to learn from their experiences and hear their frustrations. Adams realized, “I was just beginning to feel some of the same pain, and I knew it was only going to get worse as I added more zeroes.” He knew the longer he waited to address the problems, the harder they would be to fix. But how do you fix problems that have plagued the industry for decades? Adams decided he needed to look to the future to fix the issues of the past, and turned to a new building tool—data—and it quickly changed the way he approached the business of building houses.
Creating a data-driven construction business.
The home building industry has operated the same way for decades—highly inefficiently and based on a lot of guesswork. Adams found that many of the seasoned builders around him were resistant to new approaches and ideas—especially when those ideas included technology and data. When the housing market is booming, it’s easy to mask efficiency issues, such as scheduling construction, pricing, pace of sales, and even cash flow planning. However, as the housing industry becomes increasingly expensive—both in terms of inputs (which includes everything from materials to land) and outputs (housing prices)—mistakes end up costing you more. It quickly became clear to Adam that builders who became more efficient would stay in business. Those who stuck to their old ways wouldn’t survive in the market.
Facing an efficiency issue that plagued not just him, but the entire industry, Adams developed a “pure need and hunger to do something different.” But it wasn’t until he looked at his smartphone that he understood what that something different was. He realized that he could see all of his sports and news information right there on his screen, all in one place. He could get all kinds of information about what was going on in the world within seconds, but he couldn’t get a single glimpse of what was happening in his business. If he could get the latest college football scores on his phone, why couldn’t he get the status of his various housing projects? Adams became determined to “datafy” every single aspect of his construction business, and he boiled it down to three key components.
If you ask another builder when a particular house will be done, they can’t tell you because they don’t know.
Adams had 12 different systems he needed to look at every day, but the data from accounting, purchasing, scheduling, sales, and so on, was so fragmented, that he was lucky if he looked at each more than once a month, or even once a quarter. He needed to have business intelligence where he could see and access all of his data, in one place, right on his phone. That’s when he turned to Domo and brought in an old friend to plan out a data strategy. They were able to get his business data on his phone as well as fill annoying data gaps across the various data systems he used. And they did it all in-house. In fact, a purchasing tool vendor had quoted him a 15-month timeline to get a simple checkbox feature for his data. Instead, his technical team built out more than 200 connectors he could use to get a comprehensive view of his business and access information faster than ever, setting the pace for the kind of business Adams needed to run.
Condensed time frames.
Most people believe home building is about materials and labor, but to Adams, “It’s really about the timing of building homes.” While time never shows up on a P&L statement, it’s a home builder’s single biggest challenge. Building houses, it turns out, is a long cycle, spanning several months. The time from breaking ground on a new house to getting paid can be six months or longer. And before you even get there, the time it takes between buying a lot and breaking ground can be anywhere from two months to a year. It became obvious to Adams that if he was going to run an efficient business, he needed to get a better handle on the time lost before, during, and after each construction project.
One of the first things Adams tackled was the constant struggle to get houses started on time. His company had a line of buyers, subcontractors, and paying customers wanting to work with him, but he just couldn’t get houses started fast enough. All the reviews and permit approvals a builder has to go through eat up valuable time before the job can even start. As crazy and inefficient as it is, this forces builders to oftentimes start with incomplete or incorrect drawings, then have to make changes along the way. All of which leads to further delays. This wasn’t going to cut it for Adams.
Adams and his team went to work mapping out the entire job approval and review process, which included internal and external reviews of floorplans, construction drawings, and permit approvals. After mapping out their entire process in detail, Adams knew he had uncovered a huge opportunity. By enhancing his company’s efficiency, he was able to build faster and more accurately than any of his competitors.
The big picture.
With a detailed map of the approval and review process, Adams created a visualized project schedule. Now, his entire company could see the current status of every project at any time, anywhere in the process. But he didn’t stop there. He designed it to give employees specific instructions at each stage in the process. Essentially, the data platform tells employees exactly what they need to do, when they need to do it, empowering them to reprioritize what they need to work on. As a result, Arbor Builders increased the number of city submittals by 450% and almost eliminated time-wasting meetings. Adams then applied the same process to other aspects of his business, including financing and warranty service, to push efficiency and organization at every level.
If you ask another builder when a particular house will be done, they can’t tell you because they don’t know. If you ask them about specific features of the house, they’re not sure. Arbor Builders’ employees can not only tell you exactly when the house will be completed but also exactly what will be inside. Adams admits his team isn’t perfect, but he believes his company can pivot quickly and fix mistakes because of the data at their fingertips, every single day. “Analytics gives us the visibility to create the plan,” he explains, “but also helps us understand that the plan is being followed.”
Adams’ passion for data led him to launch another venture, Build Intelligence, which helps other production home builders transform their businesses the way he has. “The pinnacle of success will be empowering more builders with a forward-looking view,” he says. “Having the insight to know when to speed up, slow down, or stop, based upon rapidly changing market conditions, will be critical to the next generation of successful home builders. And cutting down the cost of time will deliver more affordable homes to the market.”
Some industries are slow to change. But if Adam’s journey is evidence of anything, it’s that even the most complicated, outdated, and approval-laden industries can be transformed through data. That innovation can happen anywhere if you have the insight to look at it differently, to ask questions and push against norms. “The pinnacle of success,” he explains, “will be empowering more builders with a forward-looking view.”
*A variation of this article was originally printed on Forbes.com