Keeping the faith
Instead of going after an entirely different market and changing
the face of the company, Darling Homes seized an opportunity to
move into the Houston market in 2001. A developer working on an
upscale, master-planned community just north of Houston
approached Darling and wanted the company to build in the developer’s community.
Darling didn’t leap, though, without examining the opportunity
closely, and he spent nine months researching the Houston market
before committing. The key to analyzing the market was looking at
the city’s economic base.
“I spent a lot of time down there myself, as well as my brothers,”
Darling says. “Some of the same research companies who are here
were there, and we had a relationship with them, and we sat down
and analyzed it. We looked at future job growth in that marketplace.”
One of the attractions was Houston’s reliance on the energy market. While Dallas leaned heavily toward technology, Houston was
focused on the gas and oil business, and the two markets could balance each other.
Darling also looked at the competition and didn’t think anyone
was offering what his company could offer. He didn’t see as many companies concentrating their efforts on offering homes with custom options, allowing customers to make changes to the types of
finishes and interior styles to a home and upgrade to higher-end
materials. Darling Homes’ business model emphasizes allowing customers to make changes.
“We felt like there was an opening in those communities for our
product,” Darling says.
Once the company made its move, it was all in. It opened an office
in Houston and began working in four developments at the same time.
As Darling sees it, the best use of the company’s money was in economy of scale.
Creating the Houston operation and managing that market taught
Darling a lesson. When opening a remote office, Darling recommends
appointing someone who’s already on staff at headquarters to manage
the new office, which keeps its vision and operating processes consistent with the home office.
In the case of Houston, Darling hired from the outside, and it didn’t work. The person he hired didn’t understand how Darling
Homes wanted to operate. Two-and-a-half-years after opening the
office, Darling had to send in an executive from the home office to
run the Houston office, and that person is still there.
“I would do it differently,” Darling says. “We would be much more
prepared today to take something like that on because of our management team, the common vision and the common message we all
have. We weren’t as mature as a management team back then. If we
were going to do another marketplace today, we would send someone
from our corporate office to open up that office.”
Today, Houston generates 40 percent of Darling Homes’ revenue,
proving it was a wise investment. The only danger is making sure
the Houston operations stay fully integrated within the company.
The management changes helped, but so does the annual meeting
Darling Homes holds for all employees to help the offices’ employees get to know each other.
Quarterly, Houston’s and Dallas’ leadership councils meet for
two days to share ideas. It’s tough to get busy managers to take
that much time away from their offices for the meetings, but
Darling says it’s vital to the success of the company.
“We’re so committed to the growth of our people and everybody
being on the same page that we wouldn’t think of investing our time
elsewhere,” Darling says. “It’s a great use of our time and resources.
… We all have the feeling of being on the same team.”