For Chesmar Homes CEO Don Klein, having fun and creating memories is key to a top workplace
Klein #Klein
Don Klein, CEO of Chesmar Homes in a hallway with hand drawn caricatures of staff at the division offices Wednesday, Sept. 21, 2022 in The Woodlands, TX.
Don Klein, CEO of Houston-based Chesmar Homes, has been praised by employees for his vision, open door policy and ability to encourage and inspire the best in people. Klein was honored as a Top Workplaces Special Awards winner in the Leadership category for midsize companies, based on standout scores from employees.
Since founding the company in 2005, Chesmar has closed on more than 15,000 homes across the Houston, Austin, Dallas-Fort Worth and San Antonio markets. The company, which is being acquired by Sekisui House as the Japanese company grows its footprint in the U.S., also offers home mortgages, title insurance, and property and casualty insurance.
Klein sat down with the Chronicle at his offices in The Woodlands to talk about the business of building homes and a workplace with a family atmosphere where everyone feels supported.
Q: Chesmar is an 11-time Top Workplaces winner. What’s your secret?
A: What’s the secret? People like it here. We have some very strong values, one of which is to have fun at what you’re doing. People tend to genuinely like being here. They like what they do. They like the values. They like the working conditions. They like the success. A lot of us have been here for a really long time and have known each other even longer.
Q: What’s the story behind the start of the company?
A: I needed a job. I worked for Ryland for almost 17 years and worked for Lennar for almost 10 years. A good 60 percent of the people in our organization came from Ryland or Lennar. I was at Lennar prior to here.
Q: Chesmar has grown to nearly 200 employees in Houston alone. Will you continue to grow?
A: That’s going to be a good question because the market is not growing. We probably will not grow in the next 12 months.
Q: With mortgage rates rising to over 6 percent, how is that affecting your mortgage and building business?
A: It’s impacted both significantly, in terms of sales falling off. We’re probably at 70 to 75 percent of sales year over year.
Q: What are you doing to adjust?
A: Currently nothing. The reason we’re not doing anything is because we have a big backlog of homes out there that people have bought and they’re waiting to close.
Q: Last year, when there was a shortage of lots, labor and lumber and buyers were having to wait for their homes, how did Chesmar handle it?
A: One day at a time. We did a lot of scrambling. Build time increased, of course. All that’s going away now.
Q: How much did it increase by? How long does it take to build a house?
A: I’d say about 30 days to 45 days longer. It takes about five months on average. Normal times were down to four months.
Q: Tell me about the buyout by Sekisui House. How did employees handle it?
A: I think pretty well. Sekisui House has allowed us to run our business.
Q: Will it change the way you operate?
A: That’s a good question. I don’t know.
Q: What prompted that sale?
A: I felt that I needed to do something. I was the majority owner. I needed somebody to preserve the company if something happened to me. Really just financial planning from the company side and the personal side.
Q: What makes a good leader?
A: We have a unique culture. One of our unwritten values is we want people to be better for having been here. We define better as better professionally, better physically, better mentally and better financially. We do lots of things to help that. From a cultural standpoint, we’re about creating memories. We do a lot of things with events that help create memories.
Q: Like what?
A: We have a pretty involved annual meeting process. It’s two days where we have entertainment, we have speakers. We give awards. We have a unique peer-to-peer award where an individual writes a poem about another individual. They recite it in front of everybody. We do songs about people. We have quarterly meetings. The divisions hold quarterly meetings that are part informational and part entertainment. We have charitable projects that we do as teams.
Q: In past downturns, have you ever had to lay people off?
A: Yes, but very few.
Q: How did that go?
A: It’s never happy, but the company has to survive at the end of the day. Usually in a downturn, if you have to lay people off, you’re not laying off your best people.
Q: Do you see a possibility of that happening with the way the market is slowing?
A: It’s unknown. If the market starts picking up next year, I don’t see that happening. The question in a downturn is how deep and how long, and nobody has the answer to that today.
katherine.feser@chron.com