William Edwards Deming was once quoted as saying that any manager can do well in an expanding market. The implication being, of course, that only someone worthy of that title could prosper when the market is contracting. And that’s precisely what Morningstar Homes and its president, Dale Barron, have done.
The recession is almost a year old in Canada, and it seems the worst may now be behind us. Some regions have escaped relatively unscathed while others, like British Columbia, underwent a steeper correction. But while most were reeling from the downturn, Morning-star was posting record sales.
“In January we broke a sales record. We did 21 homes, and it snowed here like you wouldn’t believe until about the 20th. Even in the snow storms we were able to sell houses,” recalls Barron. “In February we did about 13 homes. In March, April and May we did about 20 homes each. Now in June, which is typically a slow month, we’ve currently sold 36 homes. And I wouldn’t be at all surprised if we sold 40, which is double what we usually sell.”
How have they done it? It starts with the teachings of the renowned statistician, Deming. Deming preached that quality could be attained through a systematic approach to self-improvement, and that this would in turn lead to lower costs. This has been a core principle of the Morningstar brand since its inception. The company has a rigourous polling process, designed to eke every drop of information from its customers. Their opinions are tracked from the moment they step into the sales office for the first time, to long after they’ve moved in. This data is considered vital to the company’s process of constant self-evaluation and correction.
It’s that commitment to quality that has won it the recognition of of its peers and customers – about 30 per cent of the company’s sales are from referrals.
“People are far more aware of value right now because the market is soft, and they’re shopping around. When it’s soft, people do their homework, they choose the builder and the home that really does suit their family and is of the highest quality,” says Barron. “When it’s busy, there’s fear in the marketplace, and they often buy just because it’s available that day. Right now they can afford to shop, and when they can afford to shop, the good builders do much better.”

Tough Choices to Be Made
Morningstar’s strong reputation for quality was part of the reason it thrived through the down market, but it certainly wasn’t the only reason. The second key to the company’s success was forged during a pair of meetings held in the fall of last year. At these meetings, Barron presented his entire staff (including trades, which he considers part of his staff) with two options.

The first would see them all hunker down for the slowdown to come, with cutbacks and layoffs as necessary. The second would have them all take a little water in their wine. In fact they may even need to take a lot of water. The goal was to cut costs and prices so drastically that every buyer left in the market would have no choice but to buy from them.
“There always is a market; it only gets bigger or smaller. Being as the market had dropped by maybe 90 per cent, that means that maybe 10 per cent of the market still wanted to buy a house,” estimated Barron. “We would have to get all of that 10 per cent. All of it. Ten out of ten.”
It worked. The company managed to shave $100,000 off the cost of a $500,000 home, without sacrificing quality. They took this to the press, ordering a full-page ad in the Vancouver Sun, announcing what they had done. At the time, they were the first company in the market to substantially cut their prices. Marketing was ramped up in the weeks that followed, and the results in January were tremendous. It’s been more of the same since then.
The company has launched a pair of projects in recent weeks: they sold out the first phase of their Belmont project in two days, and had 16 sales in the first week at Saddle Creek.

I Get by with a Little Help from My Friends
In his nearly 30 years in the construction and land development business, Barron has had the good fortune to be surrounded by some of the biggest names in the industry. His first big break came when he was hired as VP sales and marketing for former Canadian Home Builder’s Association president Gary Santini’s Parklane Homes. For 12 years, Barron worked for one of the foremost single-family home builders in the province, eventually working his way up to VP housing.
When he finally broke away to form his own company, he quickly found himself associated with another giant of the industry.
“Michael Audain and I had lunch one day, soon after I’d incorporated the company. I was looking for some advice, and he started the conversation along the lines of ‘Well, what if I took an equity position in your company, gave you financial backing, administrative and accounting backing and lent you my good name? You could probably build your business a lot faster’,” Barron recalls. “Right at that meeting I agreed. It didn’t take a lot of thinking.
Audain, considered one of the foremost multi-family builders in the province, and Barron have maintained a close relationship ever since.”
“I’ve been most fortunate to work for, and with, the two leading home builders in BC in my generation. I’m very proud to be associated with them. They’ve been two wonderful mentors for me, and without them I wouldn’t be here today.”
The company has flourished from its beginnings. Today, Morningstar builds roughly 220 units per year in the suburbs of Vancouver.
Barron describes the style of his homes as being distinguished by their open floor plans, which create a dramatic and easily navigable space. Lots of light and glass are the other major components of a Morningstar home — all intended to create a feel that is light and bright.