Leaders’ Playbook: As Housing Risk Brews, The Focus Is Forward

Three-quarters of a million new home sales in 2022 would be a great year for some homebuilders, a fair-to-good year for most, and a so-so year for all but a few of the rest.

What comes after is where leadership comes in.

For housing’s private sector players, Spring 2022 is a moment, like any before it, about which it can be safely said, “This too shall pass.”

It is a time of leadership. For it calls, like any time, for presence and persuasive powers, for steadfastness and for willingness to change, traits of business character and culture that leadership stokes.

Housing’s private sector leaders can’t be asked to know more than can be known, nor predict better than the rest what’s impossible to foresee.

In ways, the sector’s strategists – at all levels of the small- to mid-sized to enterprise continuum of firms – run in strong parallel with market-makers on Wall Street, with troves of both historical trends and real-time data to improve judgment, inform evaluation of options, and support decisions.

Like stock-market players, uncertainty itself has a left-half trajectory and a right-half, a parabolic curve with a duration distance in between. Ken Fisher writes in

• Perceptions about households’ current financial situations compared to a year ago deteriorated in March, with more respondents reporting being financially worse off than they were a year ago. Respondents were also more pessimistic about their household’s financial situation in the year ahead, with fewer respondents expecting their financial situation to improve a year from now.

One way or another, private sector housing leaders now – and forever – find themselves having to draw on persuasive powers, to inspire, concretize, and motivate people around them to be their best selves, to both meet expectations, and to eclipse them by adapting to conditions on that parabola of fast-rising or quickly descending uncertainty.

In a timely piece, author and business advisor Bill Taylor’s Harvard Business Review essay illustrates two approaches to today’s leadership challenge – getting people to do what they don’t want to do. Each method follows a classic formula for transformational improvement, either lowering the barriers to change, or raising the resolve level among people expected to change.

Taylor calls one approach, the  “foot-in-the-door” method, where an initial, eminently doable, challenge serves to prime the organization’s pump for the more profound change they’ll need to tackle. He calls the alternative approach the “door-in-the-face” technique.

When it comes to life in organizations, the door-in-the-face approach is as much of a metaphor as a literal persuasion technique. The leadership lesson is not that you should routinely make demands that you know people can’t or won’t accept, or that it is acceptable to try to bluff your colleagues with phony goals in order to hit the targets you really have in mind. Rather, the idea is that by setting aspirations for performance and change that seem extreme or unreasonable, especially in organizations that suffer from active inertia, you can persuade people to consider innovations they would not have considered otherwise. Wharton professor Jerry Wind calls this “the power of impossible thinking” — and it can make big change a lot more possible.

If housing’s private sector leaders fail to get their organizations to execute, operate at a high level of excellence, jump fences, and figure their way out of a host of issues, longer term future success becomes less relevant.

That’s why many of them simply refuse any narrative that suggests ebbing demand. That’s partly because ebbing demand is anybody’s guess, and current demand – and trying to meet it – is the only practical pathway toward dealing with what will come next.

Today’s focus is getting people in their organizations to do things – well – that they’re apt not to want to do. At least not without that dose of leadership spurring them to strive.

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