What 'Most Admired' Means And Why It Matters To Homebuilders Today

Five national homebuilder brands ranked among Fortune's 26th annual "World's Most Admired Companies," an all-star list of 317 organizations, topped by the likes of Apple, Microsoft, Amazon, and Berkshire Hathaway.

When you consider the homebuilders – D.R. Horton, Lennar, PulteGroup, Toll Brothers, and Tri Pointe Homes – that Fortune has "smiled on," one of them, Tri Pointe Homes, stands out as a strapping 15-year-old youth among organizations that have been at it more than a half-century.

Horton, Lennar, Pulte, and Toll Brothers are practically perennials on Fortune's most admired list, as we've noted in The Builder's Daily here and here, and it's no accident. As organizations, they set a high bar of ambition for themselves, and then they invest, commit, and live to hurdle over it every moment of every day they do business. The Fortune recognition award has emerged as a definitive report card on corporate reputation based on feedback from executives, directors, and analysts. Korn Ferry has collaborated with Fortune to identify, select, and rank the world's most admired companies while spotlighting those business practices that make each company highly regarded by its industry peers. Executives are asked to rate organizations within an industry based on specific criteria, choosing the top ten companies they admire most. Corporate reputation and performance were measured against nine key attributes to compile the rankings– including degrees of innovation, financial soundness, use of corporate assets, social responsibility, quality of management, long-term investment, ability to attract talent, and global competitiveness.

In that light, from its inception, Tri Pointe Homes worked to define its brand and reputation to stand out from among peers for its customer-centric, design-driven homebuilding experience. A core Tri Pointe DNA principle comes through operationally as a belief that people and places grow together. With that principle as a force day to day in Tri Pointe's workplaces and job sites, Tri Pointe has pioneered leading-edge and wellness-focused design that helps homebuyers gain access to an improved living environment. What's more, by prioritizing responsible business practices, purposeful innovation, social responsibility and a shared and inspirational culture of respect and teamwork, Tri Pointe Homes has realized its founding vision: that it's "in the life-changing business," for home-buying customers, team members, business partners, investors, and localities.

At The Builder's Daily this week, we had the honor to spend 15 or 20 minutes talking with Tri Pointe Homes CEO, on what this year's recognition means, how it impacts Tri Pointe's position in a ferocious competitive arena, and why being "most admired" matters most as Bauer looks ahead in 2024 and beyond.

Here are a few choice excerpts from Doug's remarks in our one-on-one conversation.

We're very honored with this award – especially at 15 years, and a little over 11 years since we've been public – but this is really a recognition of our teams, our customers, our trade partners, our stakeholders, all that are involved in this company. It's really their recognition, and I just get to be a small part of it."

On Tri Pointe's People Culture

It happens across so many different areas of the company, but the culture of the company is our most important asset that doesn't get measured on the balance sheet. Through think tanks, customer surveys, teammember surveys, etc., we're always collaborating with each other, working to keep that reputation and culture in place. That drives the success that we've had as a company. I use a lot of sports analogies, and we're one big family, and we work together as a family. We learn from each other. And then we take that and we provide it to our customers and our stakeholders."

A Culture Of Emphasis On Innovation

We recently introduced the digital journey through our Tri Pointe app, and that provides a better experience for customers during the whole journey of buying a home. Another cool thing that we just recently did is we collaborated with Bobby Berk and have introduced his designs into a number of our model homes across the country."

Tri Pointe's Focus On Growth As Opportunity

We like to grow organically, and we recently announced we're going into the Utah market, which takes about five years to reach stabilization. So that commitment to growth, and – here we get back to culture – our reputation gives us an ability not only to grow our business but also attract and retain talent as we build our company. These recognition awards help us establish the reputation that we have in the industry to attract new people and retain our team members going forward."

Standing Out

It's a business that is very challenging when you're out building homes in this environment. One of the things that we look at is we don't look at ourselves as a a manufacturing business. We look at ourselves in the life-changing business where we provide housing and shelter, but more importantly, a place to live for our families. If you foster that type of viewpoint with your team members from the point of sale all the way to closing, you really create that environment and separate yourself from the competition."

2024 Market Challenge

We have an industry that has structurally changed. On the land front, local land use is heavily regulated across all avenues; capital constraints, less so for the public builders, but more so for the public land developers. All these constraints – land, labor, labor or aging workforce, etc. We need to attract young talent into our industry. Those are some of the things that we to focus on day to day. Our teams are out there looking to foster land relationships so that we can continue to build homes on a macro level. There are things that also are out of our control. What you do as a management team is to make sure you keep running a company down the middle of the road to absorb any of those macro or internal shocks that you may see. That's a smart business in my mind. A lot of macro issues are out of my control, but it's important that you're aware of them, and that you have the right guardrails in place going forward."