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Blog/October 2, 2017

Metrics and Musings: October, 2017

Lockers That Don’t Lock

The title for this piece comes from a founding principle at Champions Club in Houston, Texas, built by Masters Champions Jackie Burke and Jimmy Demaret, well-known. popular tour players. In the mid-’50s, they built this course around a three-part vision. First, the course design would be innovative with massive greens and long tees. This would allow the individual holes to play very differently, depending on tee markers and hole placements. This thinking influences course design yet today. Second, they wanted to attract major championship events, which they have done. The U.S. Open, Ryder Cup and the Tour Championship have all been contested there; the U.S. Women’s Open will be there in 2020. Finally, they wanted to attract members with both character strength and competency, who played golf and life by rules, so that the club would become a community of trust and skill. And to symbolize this, they installed full-length lockers that close but do not lock. Today they have 600 members (they built a second course); every member has a handicap (a measure of competency) of 14 or less; 400 are single-digit handicappers; and Rolexes, TAG Heuers, credit cards and wads of bills are left in lockers that don’t lock. They have never had a theft.

Using that phrase as a metaphor for trust and trustworthiness prompts introspection and examination. Starting with ourselves and the way we do business, do people need to lock their lockers? Looking at the company culture we have developed and now demonstrate, and the type of talent we attract, can we have lockers that don’t lock? And how about the clients, building partners and support professionals on our projects—any need to lock up?

Trust is a valuable currency, perhaps the most valuable. The late Stephen Covey, a respected teacher and consultant, has a son, also named Stephen, who has written a worthwhile book, “The Speed of Trust.” His thesis is that in all business relationships, three is either a “trust tax,” which generates endless rechecking and delay, or there is a trust dividend, which generates acceleration and higher performance. Most of us have experienced both sides of this maxim; we get his point.

The essence of generating trust as individuals, as companies, as collaborative teams is to be trustworthy ourselves in all dealings. This magnetic quality drives from our character, our desire to keep our word—to do what we say we will do. Competency is also a component of trustworthiness; people rely on you, your company and your project teams to perform at championship levels, consistently. As you deliver top-flight results, it is reinforced that they can trust you; this has positive impact for future work.

The recent response to the devastation of Hurricane Harvey at the human level showed Houstonians have an open-locker culture. Strangers rallied instantly, intuitively to help the needy, opening their hearts, homes and wallets. Construction companies and their leaders strengthened their high-trust cultures, rescuing employees, rebuilding quickly where possible, keeping people whole. It was a proud moment for the city and the industry. Life is much richer when lockers do not need to be locked.


Houston’s Monthly Metrics

Houston has been in the headlines a lot after Hurricane Harvey came through our region and dumped up to nearly 52 inches of rain in some places. While a few outliers wrote about Houston’s no zoning “Wild West” expansion, the majority focused on the resilience of our city, the get ‘er done mentality that had strangers helping strangers, and the compassion of our neighbors who dropped everything to lend a hand. As the water recedes, the damage has become clear, and it is, remarkably, much less than expected. This storm’s damage was mostly located in our homes. Approximately 13,500 apartment units and 82,000 homes were damaged with another 63,000 homes affected but habitable without repairs. Approximately 300,000 cars were destroyed according to InfoNation, though the true number may never be known. This storm was different than Ike. The wind wasn’t as big of an issue, allowing power to stay on for most Houstonians. Lessons and improvements from past storms helped our community respond faster and avoid even greater damage or loss of life.

For the commercial community, current estimates have about 50 office buildings with damage—roughly 5% of the office square footage. Light industrial emerged relatively unscathed, as did our medical community, whose improvements after Allison were tested during Harvey. Retail was a bit more impacted, but the exact numbers aren’t really known since a lot of mom and pop shops that weren’t insured may not report and instead choose to fix them themselves. We expect to see those smaller businesses struggling and possibly some closures for those that didn’t have the cash flow to weather the days out of commission. However, if your store sells home supplies, home décor or clothes, then we suspect this storm will result in much higher sales for you for the remainder of the year as people replace lost items. K-12 schools had damage as well, ranging from minor damage to being closed for the year and students rerouted. Hotels, according to CBRE hotels, are reaping the benefits of the storm with occupancy rates and revenue per available room jumping up since the storm. If past storms are any indicator, they will continue to see this increased demand for about six months. Likewise, those homes which remained dry are now seeing higher demand, as are apartment units, whose rents have already begun to rise. The petrochemical community was also impacted, with Corpus Christi seeing the biggest hit. Baytown, while down temporarily, has seen all its refiners restart, with full capacity expected by the start of October.

For Houston contractors, it will be a temporary bump for a few months before leveling off, with the majority being renovation work and primarily on the residential side. We would expect to see labor and material cost escalations as the rebuild will exacerbate the worker shortage, and everyone will be looking for lumber, drywall, trucks and other renovation materials at the same time.

For our community, the long-term impact remains to be seen. With multiple large storms hitting Texas, Florida and Puerto Rico in such a short time period, we run the risk of donation fatigue – as people further inland stop contributing toward relief as these events become more common. Additionally, the recovery efforts in Florida and Puerto Rico will only further strain the workforce and materials costs while all these areas try to rebuild. Moody Analytics is projecting $97 billion in destruction from Harvey (across the entire path of destruction from the storm) and early estimates of $300 billion, when Hurricanes Irma and Maria are factored in. Dr. Bill Gilmer noted that storms are bad for a person’s balance sheet but good for the local economy and employment, and so we suspect that Houston’s resiliency will continue and that the lemonade we make from these lemons will be even sweeter.

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