A Cup of Coffee with...Jim Clayton
Part 1 of A Cup of Coffee with...Jim Clayton, is found at the link below. Part II starts below too. The previous and current video interviews cover different ground than the text (written) questions and answers, do dig thoughtfully into both!
Note to readers, this is a flashback interview, and other than this red text, it is as originally published
What would you give to sit for an hour with a legend that began as a share-croppers son and rose to the top of his profession? What questions would you ask?
Let me suggest that anyone serious about their own or their colleagues success would want to study both the video interviews and then thoughtfully read and consider the 18 written questions and answers. That would yield a complete picture of this super-successful, billionaire legend in the manufactured housing industry.
By way of editorial commentary, the combination of these 4 elements - the two videos and the two written interviews - you can get fascinating insights into our industry as well as what it takes to be successful in the factory-built home profession. A lot of university level courses would not give you the insights that this will!
Mr. Clayton is a legendary figure! So MHProNews - along with and with my thanks to our colleagues at ManufacturedHome who provided the fine production – we skipped the shorter video formats in favor of a truly in depth interview.
I was there, but every time I watch and read this, I learn something new and useful. It is our hope that you and many others will too.
A Cup of Coffee with...Jim Clayton...Part II
11)Is part of our challenge in the manufactured housing industry today connected with the fact that we have a great product and a terrific story, but we are too often silent or ineffective at sharing that story with the general public or individual home shoppers? To rephrase, in your view, is more professionalism in the industry at large in the areas of marketing, sales training and customer service important ingredients to recapturing a greater market share of the overall housing market?
"A few bad apples spoil a barrel." That is true in apples and in MH players.
We all know that a few have played on the edge - and occasionally outside the legal and practical limit. As a result bad things happened to some bad customers, but unfortunately to some good home buyers too. All too often the bad homebuyer who purchased a bad home (or, a good home installed poorly) were most visible. OUCH!
The home has to be - built well, sold well, delivered well, and especially installed well – plus, even financed well.
Why are the mistakes made in our industry relative to those homes sited near high traffic areas - where more people are exposed to the mistakes. How to fix?
Industry leaders must unite even more and agree to accommodate regulations that discourage:
Retailer failing to adjust customer expectations to a realistic level during the sales process
Poor site selection
Inadequate site preparation
Lack of follow up service
Poor loan underwriting
Had the industry joined synergistically to facilitate uniform standards years ago, then our marketing could have been effective - and would be now. The industry has been its own worst enemy and this was brought on by a relatively tiny segment of the participants.
However, I am happily encouraged at the progress the industry has made in design, quality, and service.
Today everyone knows that Manufactured Homes are enjoyed by a large segment of the population. Shipments should be up annually for the next decade.
12) Vertical integration was a rainbow that many chased, but Clayton Homes managed to succeed at. A Clayton retailer is not required to buy solely from a Clayton factory. Finance and collections are closely aligned with the retail store that sold the home. Are these and other business practices parts of the puzzle for the success in vertical integration your name sake manufactured housing operations enjoyed?
Benchmarking against Oakwood, Connor, and Mobile Home Industries - three public, high-flying companies back in the 70's and 80's who inspired and challenged me. They and several companies tried vertical integration - some to only a limited extent, I learned how near impossible it is to merge all the skills required to function successfully in all areas. Here are a few points that I found to be absolutes.
Each discipline, Manufacturing, Retail, and Finance, must be functionally a stand-a-lone group.
Each must be strong on: 1. Sales, 2. Human Resources, 3. Accounting, 4. Planning.
Transfer pricing must me set by each group independent of the others. That is tough to accomplish. Consider: It's mid January and not an order at the factory. Inventory at retail is 115% of budget. Will the factory get an order? No way! The independence must be preserved. That is the Clayton difference.
How can the factory prove to retail that the home is competitive as to style and quality? Easy, allow the retail sale centers to buy from competition. Does that make sense? Help the competition? In my view, that is the most difficult part.
If the sales person buys the home, it is half sold. Give the Retail sales people that "edge."
13) Problem solving and team building are two of the keys that CEOs and C-Suite level leaders deal with routinely. What sort of process do you use in your leadership role and why?
I have always been able to make quick decisions. This has worked for me except when it did not. From the "did nots," I learned.
But, I like data and am not likely to commit until I have the data.
As to the C Suite, I use several tools, some home-grown. Several tools have been adapted and in my first 30 years, I attended every industry function as well as seminars and training offerings.
14) During the National Communities Council Fall Leadership Forum you selected a front row seat to hear Sam Zell and other presenters. You seemed keen on adding to your understanding of business and success, right? What were some of your take aways from Sam Zell's conversation with MHI Chairman Nathan Smith?
Simple! Success ain't hard. Sam (Zell) simplifies as he teaches from a simple and easy to understand lesson plan. He is good - very good. He has been there and done it - and everyone who hears him speak two sentences knows that.
15) When we spoke at the NCC, you commented that there are land-lease manufactured home communities for every economic price point in America. A large part of Clayton's total value when you sold to Berkshire Hathaway was in Clayton owned communities. In your view, is land-lease under-appreciated today as a model for affordable home ownership? How could a more robust environment be created that would encourage more land lease development?
None are being built now - that's almost true. That is too bad as the quality of life per dollar invested is amazing.
However, prices of existing Land Lease Communities are escalating rapidly.
Perhaps in five years, the numbers will work again. However, one of the biggest challenges of my career was to obtain zoning. Never have I had the credibility of my ancestry questioned to that extent. There were few wins. My batting average was not 500. Want to buy some vacant land?
16) At MHProNews and our related operations, we subscribe to a belief that every problem is an opportunity in disguise. That said, are there some problems - like, for example government over-regulation - that are just problems, or do you think there a silver lining for every cloud?
There is a silver lining most every time. I believe that. It takes patience and a lot of hard work to be a successful retailer or manufacturer. I know a number of retired couples whose story would confirm that there is a silver lining.
This industry offers so much to individuals and families who will persevere, ignore the economic cycles, and stay on course.
(Editor's Note: The Video Interview covers the sale to
Warren Buffett of Clayton Homes
Kevin Clayton's rise in the company,
Jim's 'most important' success secrets, Jim's
view on the regulatory environment today and more)
17) Industry trade shows, such as the Louisville or Tunica Shows, have long been a part of the Clayton business tradition. In 2014, the Louisville Show once again became the most attended event anywhere in manufactured housing. Based upon your experience, what would you say to an Industry pro to encourage them to come? What are the wins for attendees and exhibitors?
As stated earlier, I learned so much from attending industry events.
I found that networking at events proved to be very productive in later years. As I write this, I am planning on what to pack for Las Vegas tomorrow. I look forward to industry events at age 80.
18) Are there any closing thoughts you'd like to share with our MHProNews readers?
I am a lucky guy to have found a trade/industry that I dearly love. The "trip" has been so interesting.
100% of the proceeds go to maintain the 100 year old Tennessee Theater.