When the market is strong and sales are good, many builders refuse to accept customer change orders. In leaner
times change orders become popular as a means to secure sales. Frequently once the change order gate opens,
change order creep occurs and alterations get made later and later in the schedule, sometimes without payment or
complete documentation. What follows is often insanity for the field staff, errors, disagreements, and customer
dissatisfaction.
Swinging from no changes ever to some changes maybe to almost any changes almost any time may be a tempting
marketing strategy. But caution is in order: As this change order pendulum flails back and forth, remember that the
entire company flails right along with it.
Managing customer change requests is as much an operational issue as a sales and marketing issue. Each
company– whether production, semi-custom, or custom–evolves its operational style based on philosophy and
experience. Documentation and communication systems develop to reflect and support that evolution. Altering these
components is possible but requires planning, discussions, and revisions of the plans. From sales through warranty,
every company function must be aligned to manage and respond to changes effectively.
The ideal situation is to have systems and attitudes in place that accommodate reasonable change requests within
reasonable time frames with reasonable profit accruing from the effort. “Reasonable” in this context is defined by
what works successfully for both customer and company. Such changes are then correctly implemented resulting in
ecstatically happy home buyers.
Regrettably, many builders lack effective change order management systems. Jumping back and forth among
operational styles means that change order practices don’t have a chance to be fine-tuned before they mutate to a
different form. Reasonable is replaced by “seat of the pants” and “spur of the moment”.
Builders might do better both short- and long-term by making peace with the whole change order challenge. Is it
really fair to expect customers to make every decision about a product this expensive and this important and never
second guess any of their choices? We’ve all seen builders make changes to model homes two days before their
grand opening–yet buyers are expected to get all details right often before construction even begins.
And desirable as it is to operate without the extra work and annoyance of change orders when times are good, that
approach leaves a company without polished systems for managing change orders when accepting them is essential
to selling homes. Hurrying to develop and implement this complex process under stress is a recipe for frustration,
mistakes, misunderstandings, and expense.
As we all know, it is easier to speed up a moving vehicle than one standing still. Slight adjustments to a competent
change order system are easier than creating a system from the ground up under the pressure of a tough market.