Tim Costello

Green BuildingBlog Post From Tim Costello: CEO, Builders Digital Experience

Several weeks ago I found myself visiting Jeff Mezger, the CEO of KB Home in Los Angeles. I have been to their corporate office many times. It is housed in a glorious skyscraper on Wilshire Blvd. with magnificent views in nearly every direction.

Killing time before the meeting, I popped into the men’s room and there hanging on the wall in front of me was the future of green home building: the waterless urinal. Well, perhaps it was not the urinal itself that is the future of green home building but what it stood for.

OK, first I have to admit I am and always have been a huge fan of all things green! I have solar PV on my home, I own a Prius, I have tankless water heaters, my 8th grade science fair project nearly 40 years ago was a scale model of a net zero home. So this kind of stuff excites me.

Now back to those urinals. I had seen them before at trade shows and in high volume stadium settings but never in an office environment and more importantly never in a builder’s office. While my meeting with Jeff was not remotely related to KB’s green building practices, I could not help but comment about the urinal later during our meeting. That is when I actually saw or perhaps heard the future of green building.

That one comment opened the door to witnessing a personal and corporate conversion to the adoption of sustainability and green practices as a responsible business imperative. Jeff effortlessly glided his way through an hour long story of his and the company’s integration of “green thinking” into everything KB Home does. While I have heard many builders talk green, this was different, this was not necessary window dressing nor an individual’s lifelong passion. This was a pragmatic, thorough, well thought out business performance driven strategy that was infiltrating everything the company does.

I felt as though I had witnessed the first days of Adam Warbach as he lead Wal-Mart on their journey to discover the virtues of a holistic sustainable approach to business. While small builders across the country have been pushing the green building envelope for decades, the vast majority of new homes have been unaffected. For green building to have a meaningful impact on the energy intensity of the built infrastructure of the US, the large national builders will have to adopt green principles. In the weeks following that meeting I have seen real, meaningful movement from other large national builders to build greener more sustainable housing. While this is good for the country it is also undoubtedly good for builders as well.

So be careful next time you step into the men’s room, you may just discover the future of an entire industry.

This Friday, BDX CEO Tim Costello will be delivering the Keynote presentation at the annual CEDIA Expo. His presentation will focus on the “new normal” and how companies can find opportunities to thrive in this new economic landscape.

Mr. Costello will also be presenting two educational sessions during the conference:

Applying Lean Principles to Achieve Operational Excellence :: This session will examine how successful businesses have created disciplined programs of waste elimination and provide attendees with a firsthand consultation for establishing a plan of their own.

Marketing to the New Green Buyer :: There’s a lot of talk about the green consumer these days, but selling to the new green buyer may be more complex than you thought. This session introduces attendees to the different buyers within the green market and how to appeal to each of them.

Click here for more information.

Blog Post From Tim Costello: CEO, Builders Digital Experience

I was visiting Summit County, Colorado a few weeks ago. While it may not be Las Vegas or Riverside, CA, the market is in a slump none-the-less. It is plagued by the same components of housing malaise as the rest of the nation — too many homes for sale, foreclosures, short sales and just not enough well-heeled buyers to keep things going. Prices have declined dramatically and inventories remain relatively high.

Yet as I rounded the corner of yet another high-end community with For Sale signs on what seemed to be a quarter of the properties, a new home under construction came into plain view. It was so shocking; I had trouble comprehending what I was seeing, kind of like seeing an elephant in the middle of a highway. But there it was a bustling site of activity reminiscent of the pre bubble economy.

At first, I wondered if it was some builder’s final desperate folly. But then as I stared at it and studied the home, the genius of it all began to sink in. This was not just another house, this was a “new home”, highly differentiated and with features that are completely unavailable on the current market. This was not only the only home of its type in the neighborhood but one of only a few such homes in the entire county. This home was “green” from the ground up, with solar PV and hot water to boot. This builder was not building another house; he was building the first house of its kind.

And therein lies the genius of it all, if your market is saturated and demand is slack then change your offering to create your own “blue ocean” strategy, where you compete alone and harbor all demand. The building industry has a unique and compelling advantage to other industries, in that we do not build standard products. Of all the industries I have studied over the years, homebuilding has the most latitude to course correct and change its offering year to year and even month to month.

If the home building industry wants to regain its momentum without waiting for “absorption economics” to play out, then it had better change the game. Go back to the drawing board and build a product that does not compete with the current market. Borrow a card from the auto industry and create planned obsolescence to drive demand and create profound differentiation. The future of the housing market may depend on it and the country as well as consumers will certainly benefit from it.

By Tim Costello, CEO, BDX

Newhomesource.com has been collecting and analyzing online home buyer traffic and trends for over a decade. As has been the case in housing for as long as anyone can remember, January is the start to the online home buying season. January’s results can be used as a reasonable surrogate for the coming year’s home sales and consumer traffic.

In comparing online search traffic for both new and used homes, this January NewHome Source has estimated that there are 20-25% fewer consumers searching for homes this year than in 2010. While at first that seems like a fifth year of bad news, we must remember that last year’s January traffic was inflated by government incentives. Once those incentives disappeared in April of 2010 traffic consumer interest sank and we all know how the year ended.

This year’s numbers are not influenced by unnatural government intervention, so one would expect consumer traffic to behave in a more traditional seasonal pattern. If this holds true, we should expect improving year over year comparisons starting this April. So while we all wish there were more consumers confident of their economic situation and looking for new homes, it might actually not all be bad news. While 2011 may be starting out slow, it may also finish with a comparative bang providing the industry with its first real growth in many years.

Tim Costello is currently President and Chief Executive Officer of BDX, Inc., and Chairman and Chief Executive Officer of Builder Homesite, Inc. You can follow Tim on twitter: @bylinetim for his insights on the homebuilding industry.