A Lesson From Lennar & CEO Stuart Miller

Lennar Construction has become a leader in the residential and commercial building industry. But getting there wasn’t always easy, as former CEO and current Executive Chairman Stuart Miller can attest. There are always large risks associated with building homes because not only are you anticipating the needs of the market, but you are also attempting to predict what the supply and demand will look like months from when the project begins on an empty plot of land. With risk, there is no reward.

You can view Stuart Miller’s Resume on LinkedIn

When Miller took over as CEO of Lennar Construction, a company that his father founded, he saw the immediate potential to expand the business. To do this, he developed what he has come to call his golden triangle, a mantra composed of three powerful words: starts, sales, and deliveries. He has used this methodology to push Lennar forward while minimizing the risk associated with the home building industry.

Strategic Priorities

Miller has focused this ideal to combat the volatility that is often associated with the unpredictable housing market. Because the housing market is filled with speculation rather than promise, to be successful, a company must account for this and build the processes that work together in order to achieve the outcomes that you desire. Each process must play a vital role in helping the other processes to be successful.

Miller’s leadership scope has focused his company’s efforts on key decision-making, which can set it apart from the competition by creating a flexible and dynamic operation.

1. Create strategic partnerships with land banking companies. These companies can help provide a future supply of buildable land while also allowing you to secure that land at affordable prices. With this type of partnership, there is less risk of acquiring land in the ebbs and flows of supply and demand.
   
   
2. Hold minimal land. Many construction companies want to hold on to just the right plots of land for future development, but this could cost time and money as those projects may not get underway for years. By minimizing the amount of land in holding, the costs can be significantly reduced, creating more cash availability for the current projects under development.
   
   
3. Focus on operational efficiency to minimize cost management. With a focus on consistent starts, Lennar has put this at the core of their work. They can increase the market share while stifling the impacts of rising land costs.
   
   
4. Navigating the dynamics of the market. Rising land costs can be a huge hindrance to a company’s success in the housing construction market. This means strategically outlining home site availability and production. Without understanding this, the rise in land costs can create obstacles that prevent the success of the project and ultimately impact the company’s bottom dollar.
   
   
5. Keep tabs on interest rates. While interest rates are unpredictable, strategic planning and monitoring can help to provide insight on when to begin a project and how to approach any economic uncertainties that come with the fluctuations in the market. With proper planning, a company can weather any financial storm that may arise.

These strategies have allowed Stuart Miller to help Lennar propel past the competition. With his time at the helm, the company expanded its operations into commercial buildings and also expanded its services to clients to ensure they lead the industry. By consistently remaining in tune with the market and with that industry, Miller has been able to keep Lennar on the leading edge of home building.

Leading Differently

The leadership doesn’t end there. Miller laid the foundation for the future of technology in the building industry by having the foresight to anticipate how innovations such as 3D printing can help produce high-quality homes in lower production times.

The Lennar way of managing the home building industry is what keeps them ahead of the competition. If you live in one of the 20 states in which they operate, you have no doubt seen one of their many projects. Through unique investing and taking advantage of the most opportune moments to acquire land and real estate, they can create the home, neighborhood, or commercial dream for their clients. Through smart investing and utilizing the right channels, Lennar has been able to set the standard for home construction. There is a reason their name is synonymous with success.

Homes for Families

Their way of doing business and building within the industry has led Lennar to hold a reputation that far outpaces the competition. They seek to build quality homes that their clients can enjoy for generations, not just a few years. Miller has always cared about people and has made it his mission to ensure that those who will benefit from their projects are put first. At the end of the day, Miller understands that opening the door to a new home isn’t about the company that built it; it’s about the family that lives in it.

Reference: https://www.crunchbase.com/person/stuart-a-miller

Reference: https://investors.lennar.com/corporate-governance/leadership