Title: CEO, President, Founder, Neumann Homes
Age: "I have celebrated my 19th birthday 26 times."
Headquarters: Warrenville, Ill.
In an industry where the average number of homes built per employee is 3.5 to 5, team members at Neumann Homes average 5.5 to 6. In new home sales, the industry average for new home conversion rates—the number of homes converted to sale per 100 candidates—is 4. Neumann team members' average conversion rate: 8 to 8.5. And everyone knows about the sky-high turnover rates that often plague construction sectors. Well, at Neumann Homes, voluntary turnover is less than 5 percent, and employee referral rates top 60 percent nearly every year.
CEO and founder Ken Neumann says there are really just two reasons for his company's outstanding productivity and quality achievements: steadfast commitments to developing people and living corporate values.
"Six to eight years ago, I was much more focused on providing our people with solid systems and processes—the tools, structure and organization that they would need to do their jobs well," Neumann explains. "As I evolved as a leader, I realized that while those things are important, the world is changing so fast that the real challenge is growing our people."
Consequently, Neumann has spent much of his time and energy over the past few years laying the foundation for future success—not only for his company, but for the 280 team members who come to work every day. Under his direction nearly two years ago, the homebuilder created Neumann University, which offers more than 85 courses within six certification programs. In fact, Neumann teaches three of those classes every week—leadership development, general business and a class that Neumann says is on "pure people." He also devotes two hours each week to teaching outside the corporate university in the company's land acquisition and development area.
But proper training, says Neumann, is only half of the equation. Equally important is Neumann Homes' set of corporate values, which play an important role in sustaining a positive culture. In the early '90s, when there were fewer than 20 team members, Neumann gathered everyone together to talk about corporate values and culture. "I looked and them and said, 'If we're going to work together every day, we need to establish a set of values around ourselves and create an environment that we really want to be a part of each day,'" he explains. Naturally, everyone agreed.
What emerged was far more than a nicely framed official statement or pocket-sized "core values" card (although all team members do indeed carry one). Although the values—integrity, public responsibility, customer focus, teamwork and being driven to excellence—might sound like those gracing the walls of many other corporations, Neumann's unwavering lead-by-example approach has brought them to life in action, word and deed. He has tied them into all aspects of the company's day-to-day operations, from performance reviews to team outings.
While Neumann realized early on that leading by example was extremely important, he also knew that constantly keeping the values in front of the team members was equally important. The theme he devised to do just that was built around one of his favorite songs: "The River" by Garth Brooks. Neumann had a company song written to that tune, called "A Neu Way To Fly," and posters complete with the "Neu" lyrics were given to everyone.
The poster bears the same cartoon-like image that also appears on the front of the values card: three mountains with a river running through them, people rafting and climbing, and small housing complexes sprouting alongside. Representing the company's "Envisioned Future," the first mountain stands for the company's accomplishments to date. The second mountain, which is slightly off in the distance behind the first, represents the company's goal to reach $1 billion in revenue by 2006. And the final mountain, looming large and even farther off in the distance, symbolizes the company's 2020 vision to become the No. 1 homebuilder in the world.
A few weeks ago, Neumann actually brought this vivid image to life at the company's annual strategic planning conference in Colorado Springs, Colo. Neumann took about 31 people on a trek up a mile-high mountain. When they reached the first peak, they stopped and took a group photo. Neumann said, "OK, here's where we are right now. Look out across that valley; we've come a long way." Then, pointing to a peak in the distance, he said, "That's 2006." And pointing to far-off Pike's Peak, he said, "That's 2020. All we have to do is go there." And no doubt they will.