Critical Numbers™: Net Profit
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Critical Numbers™: Net Profit
Goodall Homes is a residential home-building company based outside Nashville, Tenn. Following in the footsteps of his father, Bob Goodall Jr. founded the current iteration of Goodall Homes. The company has since been responsible for creating many residential communities in the greater Nashville area. The company has more recently started a separate grading and utility business that employs more than 200 associates. In 2016, Goodall was acquired by Clayton Homes, a subsidiary of Berkshire Hathaway.
While the company had worked with a consultant to trim staff and operations, cost overruns remained an ongoing issue. They wanted to find a way to teach their team the discipline to look ahead and take advantage of downturns in the housing market. The company also wanted to create incentives and a bonus plan that would reward employees based on the performance of the company as a whole.
Goodall Homes turned to The Great Game of Business® (GGOB) in 2006 after reading Jack Stack’s book, which was discussed by everyone in the company through weekly book club-style meetings. The first big step in implementing Great Game™ was the decision to share the company’s results, good or bad, with every employee as a way to build trust. They also created A Stake in the Outcome® bonus program tied to the company’s net profits to get everyone working together toward a common goal.
Goodall Homes began playing the game in 2007—and immediately felt the effects of the collapse of the housing market in the wake of the Great Recession. While the company failed to meet the goals of its bonus plans until 2010, it successfully weathered the economic storm by growing 20% to 40% in the years that followed by taking advantage of new market opportunities. “We’re always looking toward what the next change in the market might be so we can be there prior to the rest of the market,” says CEO Bob Goodall. “I liked the way our team thinks so far ahead into the future.” Goodall Homes has since grown from approximately 35 team members in 2008 to 417 team members in 2020 between our two companies—which doesn’t count the more than 300 homebuilding and site contracting companies supported by their business operations in four cities across Middle Tennessee, Eastern Tennessee, and Northern Georgia and Alabama.
“GGOB helps me to understand everyone's role in the business and ways I can make an impact. When one of the Goodall Homes values is teaching everyone to be a business owner, I feel like the use of GGOB makes me feel like I am being invested in and continuously growing as an employee. Understanding how the business functions motivates me to excel or persevere in different market climates in order for the business to succeed.”
~ Ariel Scharpen, Architecture Coordinator
Just as Goodall credits playing GGOB with helping it successfully emerge from the 2008 recession, it has also embraced the lessons of The Game in the wake of the pandemic. Their first step was to begin remote huddling daily across their multiple divisions to get their entire team on the same page and to address people’s fears about the virus and losing their jobs. “When there is a crisis, you have to get the team focused on a plan,” says COO Keith Porterfield. “We got everyone to laser focus on three areas: the safety of team members; protecting our backlog; and hitting our breakeven target for sales, which was about 45 homes a month. Everyone then understood we wouldn’t be laying anyone off if we could address those three elements to some extent.” The team also had a head start in embracing new technology like Zoom and using remote technology—including robots—inside its model homes to continue to reach new customers in a safe manner.
“I'm much more open about discussing finances and interested in understanding how our company can budget and save in the proper areas. It's nice to have a transparent workplace that allows you to expand that information outside of the work environment. It's made me much more conscious about how to be a business owner outside of the company as well.”
~ Millie Djurdjevic, Starts Coordinator
The Goodall team implements multiple MiniGames throughout the year to attack problems, support their critical number, and introduce fun into the workplace. When developing ideas for new games, the team follows Toyota’s A3 problem-solving method where each game needs to address the following elements to the team: 1) Background 2) Current Conditions 3) Goals 4) Root Cause Analysis 5) Countermeasures 6) Action Plan 7) Follow Up. “It’s said many times at Goodall Homes, a picture is worth a thousand words,” says Porterfield. “So, teams are encouraged to have a visual display as a way of keeping score.”
The Goodall’s team’s Game Plan for 2020 is all about what they call “Plan Busters.” Each division inside the business has enlisted every team and every team member to think strategically about ways to reduce costs and win in a challenging economy. Every individual and team have a plan. The collective ideas are then being integrated into a project management tool with “dollars saved” tracking tools applied. “We’ve experienced such a remarkable transition in our culture in the early stages of our implementation of The Game that we subsequently deemed GGOB be one of our specific Core Values: ‘We teach every Team Member how to be a business owner,’” says Porterfield.
“The Great Game of Business philosophy has really been a game changer in regard to how we all contribute to our short-term and long-term goals. The transparency of our financials and future plans gives me an understanding of how this company can succeed on a high level. With this knowledge I feel empowered and motivated to make meaningful contributions.”
~ Dale Skipworth, Assistant Project Manager
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