Painful Pullback

Painful Pullback

management by Mark Gordon | Managing Editor

Cutting employees will never be pleasant. But take it from a CEO who did it twice in eight months: Be prepared.

Britton Williams, head of Bradenton-based homebuilder Bruce Williams Homes, realizes that layoffs are categorically tougher for the person being laid of than the one doing the layoffs. One person in the equation gets to keep a job.

But the CEO seat was still not a good place to be two months ago, when Williams personally laid off the last of 40 people who had worked for the family homebuilding company that's been in business since 1969. Williams, a finalist for the Review's 2006 Entrepreneur Award, says the experience of directing the company from 107 employees to 57 in a span of seven months was the toughest task he's ever had to do in business.

"It was the single most stressful thing for me," says Williams, 38, "because I consider these people like family."

Turns out Williams' situation wasn't much different from several of his executive brethren in the homebuilding industry. It's not even much different than what an executive in any field faces when having to trim a workforce: The experience can be emotionally draining, and, as Williams found out, a stark reminder that business success can be fleeting if you don't stick to the fundamental beliefs that got you the success in the first place. (See related story).

For Williams, who has been at the helm of Bruce Williams Homes since 2001, it was also a learning experience - although he hopes he doesn't have to apply his lessons anytime soon. One key lesson he learned was to be as prepared as possible, especially in helping find the laid-off employees new jobs.

'No bitterness'

The layoffs were an obvious step Williams had to take last summer, as the housing slump turned from a blip to a bust.

Bruce Williams Homes took as big a hit as any Gulf Coast homebuilder during the flop, dropping to $82.6 million in 2006 revenues, a 23% slip from 2005, when it had $101.4 million in revenues. What's more, it's only going to get worse in 2007, says Williams, who is projecting $50 million in revenues for the year.

In the beginning, says Williams, sales momentum crashed so suddenly, that he and the other company executives thought it was an anomaly. One month, the company sold 45 more homes than the previous month, going from 15 to 60. And then, from September to October 2005, new home sales dropped from 20 to just four. Says Williams: "It started and stopped on a dime."

The company's executive staff, including Williams' brother, Marshall Williams, talked things over with the board and a separate advisor group. By the spring of 2006, the company made the decision to begin trimming the work force. At the time, it had 107 employees.

The first group, about 20 employees, in departments as varied as accounting and fieldwork, was told in July. The second and final round of layoffs was completed in January. In total, the Bruce Williams Homes payroll was cut from 107 to 57 people, with about 10 of those coming from natural attrition, not layoffs.

Williams personally told each employee about the layoffs. He says there were some tears, but in general, people took it better then he expected. Some were even surprisingly gracious. "There was no bitterness," he says, "at least to my face."

Job matchmaker

From the beginning, Williams wanted to set up the displaced employees with legitimate job opportunities, not just leads. By the time the second wave of layoffs arrived, he had a system down.

The Williams brothers dipped into their contact list of builders, developers, real estate executives and contractors in the industry. They worked the phones, cajoling others to find jobs for their employees.

It was important, Britt Williams says, not just to ask if a certain company was looking, but also to try to play matchmaker and set up a specific employee with a specific employer. Otherwise, a job lead can turn into nothing, only prolonging the frustration.

The plan worked: Williams says all but four former Bruce Williams Homes employees are accounted four and currently working, although some of the displaced found jobs on their own. Adds Williams: "We didn't want to just show them the door and be done with it."

As Williams was helping his former employees go forward, he also had to figure out how he would move on himself: His leadership was essential to monitor the future of the business - otherwise he'd be laying off more people.

Williams turned in two directions for help. He spoke with friends in the area, as well as some trusted peers he knows through the National Association of Homebuilders.

And he prayed.

"I spent a lot of time in prayer," Williams says. "That's how I spend a lot of time when things seem too big for me."

REVIEW SUMMARY

Executive. Britt Williams, CEO and President, Bruce Williams Homes

Industry. Homebuilding

Key. Williams looks to preserve the future of the family business after going through the grueling process of cutting staff nearly in half.

AT A GLANCE

Bruce Williams Homes

Year Revenues Change

2003 $47.9 million

2004 $89.2 million 86.5%

2005 $101.4 million 13.6%

2006 $82.6 million -23%

2007 $50.0 million (projected)

Year Employees

2004 80

2005 90

2006 107

2007 57

Source: Bruce Williams Homes

Sweating the small stuff

Trimming almost half of a 107-strong workforce doesn't mean Bruce Williams Homes will be in hibernation during the residential real estate slump.

Instead, the company, led by CEO and president Britton Williams, is focusing its remaining employees on doing more with less, starting with paying attention to details that might have been overlooked during more feverish times. For example, Williams and other executives are doing a better job talking to peers and competitors to get a sense of what's going on in the industry - in the boom era, there was no need or time to do that.

The execution of the strategy includes diversifying the departments and projects, so a sales slump in one or two areas won't derail everything else. On the departments side, the company opened divisions for commercial building and remodeling.

And on the projects end, the company recently completed a two-year long planning and permitting stage for CrossCreek, a master planned community in Parrish that includes a 13,000-square-foot community center and 22 acres for an elementary school. And at 900-plus homes, CrossCreek dwarfs the company's previous biggest-ever project, the 612 homes it built in Greenfield Plantation in east Manatee County.

And while CrossCreek is Bruce Williams Homes' biggest, it is only one of seven projects the company is working on: Four are at some stage of the planning and production stage, while construction at the three others has already begun.

Williams brandishes a mix of realism and optimism as he carries on with the company - now with employee and revenue numbers hit during the boom in 2004. As soon as the resell market picks back up, he says, the company will be on the verge of breaking out, as that will bring down the inventory glut.

Until that happens, though, Williams is going to stick with the current plan and strategy. Williams goes over the plan with every employee at monthly company-wide breakfasts, where his props include poster boards with slogans and catch phrases.

"We are going to play up to our strengths," he says, "and we are going to stay true to our values."

Finally, despite the market slump and the layoffs that followed, Williams is still determined to reach one of his five-year targets: To have Bruce Williams Homes become one of the most profitable, and elite, homebuilders on the Gulf Coast.

-Mark Gordon