Innovation Starts @ Home: A Conversation with Stuart Miller
Event Summary provided by Kimberly Simpson, NACD Regional Director
October 31, 2018
NACD Florida welcomed Stuart Miller, Executive Chairman of Lennar Corporation, to a Halloween day program at Northern Trust’s beautiful Miami office. With a crowd of more than 75 in attendance, Mr. Miller shared remarks and took questions related to the company’s highly successful innovation efforts.
Mr. Miller stressed the importance of looking ahead and looking around corners. “If there’s anything that keeps me up at night,” he said, “it’s things happening around me that I cannot see and that are shifting the ground beneath me, when it’s too late to act.” To avoid this eventuality, he suggests that the organization have a board with diverse experience that can bring in outside ideas and perspectives. Also, as a whole, the company has to dream big and follow a formula – simple in its components but complex in execution:
- Identify where change can and must happen
- Craft a solution, experimenting and testing the solution
- Create lines of inspiring and memorable communication around the solution
- Create a system of accountability for the implementation of the solution, gamifying the system if possible
Mr. Miller provided illustrations for imperatives from Lennar’s business:
Move from Traditional to Digital Marketing
Traditional, print-based advertising was expensive and difficult to measure. In the early days of digital marketing, Mr. Miller pitched digital as the way of the future to all 38 regional divisions. Only one, Las Vegas, jumped on board. A year later, the Las Vegas division went completely digital, having maintained its growth rate while drastically slashing marketing costs. Mr. Miller paired Las Vegas with the South Florida division which had resisted change to create a mentoring relationship and soon South Florida showed similar positive results.
The company used a clever video – a spoof on The Hunger Games movies, called The Number Games – to create competition among the remaining divisions using traditional marketing. KPIs were established, and a monthly scoreboard was created for all to see. Laggards were mentored, and the national office offered tips for success.
Changing World of Real Estate
Foreseeing disruption in the real estate sales business, Lennar looked for a way to disintermediate the traditional sales cycle. Creating a trade-in program, Lennar took away the challenge and cost of selling one house and buying another, instead purchasing a family’s home and closing on a new home in a single transaction using the Open Door automated valuation model.
Making Insurance Easier
In the very traditional and labor intensive world of mortgage and title insurance, Lennar foresees change afoot. To stay ahead of the change, Lennar sought out various companies disrupting the space, investing in them and bringing “old school knowledge” to new thinking. The companies also benefit from strategy advice and built-in customer volume. On the customer side of the equation, Lennar’s customers can give permission to share certain information with the company, then many forms are auto populated for the customer, making the process much less cumbersome.
Trying to stay ahead of IoT technology, Lennar is building Wi-Fi connectivity from wall to wall and floor to ceiling. The company also partnered with Amazon for activation and support. Mr. Miller described these steps as “future proofing” the company’s product.
Productivity and Dynamic Reporting
Growth has been slow in the home building industry, and labor is a limiting factor. The company now uses technology to shortcut the traditional plans-to-building process by dropping off pre-cut wood for framing, for example. Also, so that the divisions can operate more nimbly, the company is providing a dashboard with real-time financial data, a significant improvement versus the old three weeks past quarter close scenario.
The audience left feeling inspired to take a fresh look at their own business models and consider teaming with companies that are disrupting their industry space to be proactive.
The NACD Florida Chapter extends its thanks to Mr. Miller, the team at Lennar, and its sponsors, including hosting sponsor, Northern Trust.