Judgment Calls. Thomas H. Davenport

not learn from them?” Most are happy to volunteer a perspective. At times Burrill has even undertaken larger-scale surveys of customers; his firm recently surveyed about four hundred customers, for example, about issues around the sales process and their perceptions about WGB's model homes.

      Burrill had always been interested in other people's ideas about his houses, but as his business has grown, and as his own family members have become more involved in it, he has realized that the insights and opinions of everyone involved in building and selling the houses are extremely valuable. “I try to surround myself with people who are smarter than I am,” he notes modestly, “and I get as many opinions as I can. But then I have to make the decision.”

      The Group Discussion

      After the solicitation of multiple opinions, Burrill assembled a meeting of WGB family members, aiming for some collective decision making. Everything people had heard or thought was put on the table. Some of the informal advisers who had toured the house thought there just weren't as many boomer buyers as Burrill had counted on. Comments by younger families who'd been turned off by the first floor master were recalled.

      Burrill's daughters, Erica and Vanessa, who handle sales and marketing for him, had also picked up signals from older couples. It seemed that while those target buyers might imagine they wanted a first floor master, when it came down to buying, they ended up purchasing what they were used to—especially when the trade-off sank in, that they would lose space on the first floor to entertain. “Half my first floor would be the master bedroom,” one buyer commented. Erica and Vanessa recalled several instances where they would have people who were very interested in the Oxford model and then decided to buy a second floor master from them—or worse, a second floor master from another builder. It led Burrill and his family to believe that as much as a first floor master is what buyers said they wanted, their buying habits reflected otherwise.

      By the end of the meeting, the team had concluded that the floor plan was the problem, and had come up with ways to improve it. The specific changes to the house involved adding a bathroom to the second floor and expanding an area over the garage to accommodate it. That made it possible for parents with small children to have their bedroom on the second floor and then move downstairs at whatever point they chose. At any stage, the second “in-law” suite could be put to good use. Burrill also improved the view from the back of the house by changing some windows, and expanded the entertaining space by opening up the kitchen to the family room. The downside of making multiple changes at once is that you never know exactly what leads to a successful outcome. But Burrill had no time for academic experiments involving only one change.

      The implementation of the agreed-upon changes by Burrill and WGB was also a lesson in organizational judgment. The prospect of reversing a decision that wasn't working out wasn't as painful as it would have been for many companies. This is because WGB practices what is called, in other industries, late configuration. Just as Benetton once used white yarn to produce sweaters, and only dyed them after retailers placed orders for specific colors, Burrill completes only the outsides of houses on landscaped lots for the spec houses he builds. This allows the buyer to specify interior details to their tastes, and WGB can complete the home after it's bought in as little as thirty-two days. The fact that the houses aren't fully completed also makes it feasible to alter the unfinished frame more substantially—as WGB needed to in the case of the house that wouldn't sell.

      The Outcome and the Embedded Learning

      The changes seem to have worked. A baby boom couple bought the house a few months after the redesign—even in a difficult housing market. The couple responded well to the design and expanded the house even more by having WGB finish off their basement. Some of the features that they liked most about the house were ideas that had been generated and implemented through the participative decision-making process.

      The two other houses in the area with first floor master bedrooms that were being sold by other builders did not use participative decision making to make adjustments and customize the plans. At the time we write, one is still on the market and the other recently sold for substantially less money than the asking price and surrounding houses.

      Greg Burrill thinks they might have hit on a winner with the revised version of the house, so he's now building another home with the same plan. The Expanded Oxford has become a model of its own now—one of about twelve that WGB buyers can choose from. Like all designs and modifications, it has been captured in the company's computer-aided design (CAD) repository.

      Unlike other suburban builders who construct the same designs over and over again, Burrill is always tinkering with and improving the house designs he builds. He initially hires an independent designer to create a CAD-based design, but thereafter the plan will constantly be revised based on feedback. Even when a house design sells well, Burrill and other WGB employees will talk to customers who live in the house, subcontractors, and anyone who sees the designs about what they think.

      As with the Expanded Oxford, WGB will often make improvements to the designs and incorporate them into the CAD system. They are even willing to make changes for individual customers, although they think of themselves as production builders more than custom. “People are particular and want changes at this price level,” Burrill notes. All changes are stored as CAD files, so they can be reused easily.

      For example, one customer liked the overall design of a house, but didn't want a formal living room or dining room. So WGB accommodated the buyer, designing and building a big country kitchen and a bigger family room. Now that plan is available in the system for any other customers who want it. Further, the request and others like it have prompted the WGB team to deemphasize formal living rooms in general. In many of the available designs, what was formerly the living room has been downsized into a room that could be a library, study, or home office.

      Another Group Judgment Call

      Burrill doesn't only use the group consultation approach on design decisions. He tries to employ it on any topic on which others might have good insights. For example, a recent consultative decision involved setting a price for the resale of a condominium that WGB had built in the 1980s. Both Burrill's mother and his daughter Vanessa had lived in it at various times, and now it was on the market. An offer from a potential buyer had come in, but it was substantially below the asking price. Should Burrill accept, reject, or counter the offer?

      Burrill had his own feelings about the offer, but he knew that others in the business were knowledgeable about the condo. Vanessa had both lived there and met the potential buyer. Joe, who handled sales at one point for WGB, had sold many of the condos when they were built. So Burrill convened a meeting with his daughters and Joe.

      Burrill's consultation with his informal advisory panel revealed some differences of opinion. Vanessa and Erica wanted to keep the price high and reject the offer. Joe was inclined to sell it at the offering price. Greg Burrill was inclined to compromise a bit. “Maybe when we tell them about the improvements we've put in the unit, they'd be inclined to go a bit higher. We've put in new windows, new granite countertops, and new appliances. Let's invite them over to the unit and try to get them to raise their offer a bit.”

      Burrill had listened to the opinions of his colleague and daughters, but knew the final decision was his own. “Vanessa lived there and really loved it, so she may be a little sentimental about it. She and Erica, being in marketing and sales, want to make sure that the prices stay up at the complex. I understand that. But I don't want to have it stay on the market for six months.”

      There was certainly no rancor in the decision process. After Greg Burrill announced his intention to negotiate with the potential buyers in an e-mail to the consulted parties, the conciliatory response was rapid. Vanessa Burrill called her father a few minutes later, saying, “Dad, here's some text you might want to use in the e-mail to the buyers.”

      Reflections on WGB Homes's Organizational Judgment

      As WGB Homes's story illustrates, even small, family-run businesses can benefit from activities