You get a good idea of Standard Pacific Corp.’s culture these days just by driving into the parking lot of the homebuilder’s two-building headquarters in the Irvine Spectrum.
The fancier of the two buildings—which housed most of the company’s executives during the boom years of the housing market—sits empty. Standard Pacific’s looking to lease the building to other companies.
Next door is a more humble but lively two-story building where Standard’s remaining local employees work in close quarters.
The scene is telling of a company that’s slimmed down out of necessity. The result: a tight-knit team with a lot of direct interaction.
“There are benefits to consolidation,” said Scott Stowell, Standard’s chief operating officer. “The people who are here are all on the same page.”
At the peak of the housing market a few years ago, Standard employed more than 2,500 people.
Now the company’s down to about 800—“The best of the company,” according to Stowell.
Standard has roughly half the operating divisions it did at the peak of the market. Division heads oversee markets in California, Arizona, Texas, Nevada, Colorado, the Carolinas and Florida.
The company is smaller but values haven’t changed, according to officials who’ve been with the company during good times and bad.
It’s still the same Standard that Fortune magazine cited as one of the top 100 companies to work for in 2006 and 2007, they said.
“I don’t see that big a change in culture,” said Stowell, Standard Pacific’s No. 2 who’s been with the company since 1986.
Despite cutbacks, “There wasn’t a wholesale change in the people,” he said. “I think our culture is what attracted Ken.”
That’s Chief Executive Ken Campbell, a turnaround specialist from New York-based hedge fund MatlinPatterson Global Advisors LLC, which in 2008 became Standard’s dominant shareholder.
Campbell’s been on the job for about a year. His fingerprints are on much of the company’s operations.
Ties are gone. Hours are up. Employees from top to bottom are expected to take on a number of duties, executives said.
People here “wear a lot of hats,” said Todd Palmaer, president of homebuilding operations for the company’s largest market, California.
Land Buying
Of the 800 employees at Standard, close to 100 people are involved in one way or another in finding land to buy. For most, it isn’t their primary job function.
“We’re trying to create a more nimble (business), one that’s a little more corporate-oriented but which still is a great place to work,” Campbell said.
Inefficient and “bureaucratic” operations previously run out of divisions now largely are centralized in Irvine, he said.
The executive team, which like the rest of the company has seen its share of changes in the past few years, appears to have the company on solid footing.
Just a couple of years ago, many wondered if a debt-laden Standard would survive the housing downturn.
Now, there are expectations of profitability next year, as well as growth as the housing market stabilizes.
Standard’s now the second-most profitable publicly traded homebuilder in the country, according to Campbell. Debt issues no longer are a near-term worry, he said.
“The market imposed—and Ken demanded—a lot more discipline” on the company, Stowell said.
For better or worse, Campbell said he does not yet think of himself as a homebuilder, despite being at the company for a year now.
If homebuilding expertise is needed, Campbell said he turns to his “partner”—Stowell, a onetime Irvine Company employee who previously ran Standard’s Orange County division, among other positions. He became chief operating officer in 2007.
“Scott and I are on the same page,” Campbell said.
When MatlinPatterson bought into Standard in 2008, “There were things we knew we could fix,” Campbell said.
“But we were pleasantly surprised by the management,” he said. “Homebuilding operations were better than we expected.”
Along with Stowell, the two local execs who oversee homebuilding operations in the region are Palmaer and Ted McKibbin, president of the OC division, the company’s largest.
Palmaer said he’s in contact with his eight California divisions daily. Along with McKibbin—one of four division presidents—Palmaer spends about half of his time, if not more, traveling to projects around the state.
Stowell also visits most big job sites across the country. He and Campbell also get the longer trips to markets out of state—and to New York and Standard’s Wall Street investors.
Corporate and financial affairs largely are overseen by Campbell and a pair of execs who’ve been in their current positions for less than a year: General Counsel John Babel and Chief Financial Officer John Stephens.
Meetings
Executive meetings, which also include Heather Breidenthal, vice president of human resources, are held weekly when Campbell is in town.
Key strategy meetings are informal, short and to the point.
Campbell brought the executives together for a land-related meeting in November. By the end of the 90-minute meeting, the company had reached agreement to buy four parcels for $50 million.
Executive offices aren’t large or flashy. The only executive with a real corner office is Peter Kiesecker, a senior vice president formerly of Lennar Corp. who now heads up land buying for Standard.
Kiesecker arguably might have the busiest job at Standard next year. With land prices falling and a stockpile of cash to spend, the company’s on the hunt for good deals on land, much of it within 50 miles of OC, according to Campbell.
Campbell’s role in the company has changed in the past year. When he started, his focus was on improving Standard’s debt and cutting costs.
Now, he rarely has to deal with debt and instead gets to focus on potential opportunities to grow through land deals.
As far as his management style goes, “I try not to get bogged down in the details,” Campbell said.
Even so, Campbell said he always keeps a spreadsheet nearby that includes information on all the company’s potential land purchases.
Standard’s made plenty of cutbacks in the past year, including in early 2009 “when the world was falling apart,” Campbell said.
Those left “fit with our culture,” Stowell said.
The team members tend to have plenty of experience in homebuilding, which is helpful since most employees are charged with a lot of tasks.
“It’s an older crowd, actually,” Stowell said.
There’s also youth in the executive ranks, including Babel and Stephens. Babel was 38 and Stephens 40 when they took over their positions earlier this year. They replaced higher-ranking—and higher-paid—executives who they had reported to.
Campbell said at the time of those two promotions he was positioning the company to operate as a smaller business.
That meant replacing some higher-level executives with experience running a company with yearly sales of $4 billion with those with the skills for running a $1 billion company.
Even as Standard buys land, it isn’t looking to add employees any time soon.
“Right now we want to leverage the opportunity,” Stowell said. “First, we want to spend money on buying opportunities.”
When the market returns in earnest, the company easily could double in size, executives said.
Campbell’s role as the turnaround guy has involved its share of unpleasant choices. But he said he tries to keep things upbeat in the office.
“Even if it’s stupid stuff, we need more pizzas and more beer and to celebrate more birthdays,” he told BigBuilder magazine in early 2009.
The company’s held events such as a trip to the racetrack at Del Mar and pancake breakfasts. For a barbecue recently, Standard brought in a band—“our own guys”—to play in the parking lot, executives said.
THE TEAM
• Ken Campbell, 53, chief executive. Took top spot in December 2008. Director since July 2008. Partner with company’s largest investor, MatlinPatterson Global Advisors. Spent more than 20 years turning around companies. Began turnaround career at Kaiser Engineers. Other stints at railroad construction company RailWorks Corp., aluminum manufacturer Ormet Corp. Spent time in former Czechoslovakia during Velvet Revolution. Graduate of Connecticut’s Wesleyan University. MBA from Wharton.
• Scott Stowell, 52, chief operating officer. With Standard since 1986. Began as project manager for OC. Promoted to OC division president, then put in charge of all of Southern California. Named COO in 2007. Prior to Standard Pacific, worked for the Irvine Co., working on masterplanned communities, negotiating land sales to homebuilders. Graduated magna cum laude from Brigham Young. MBA from UC Irvine.
• Todd Palmaer, 51, president, California. With Standard since 1999. Joined as division president of San Diego operations. Named president of OC division, company’s largest, in 2002. Promoted to head of SoCal operations in 2007, added Northern California duties following year. Began homebuilding career with Pulte Homes, later worked at Lennar, Greystone Homes. USC graduate, emphasis on accounting. CPA.
• Ted McKibbin, 45, president, OC. Joined in 2002. Oversees implementation of housing developments throughout Southern California, not just OC. Background in land planning, urban development. Previously VP of urban development, university housing at Brookfield Homes, director for Del Webb Coventry Homes. USC graduate.
• John Stephens, 41, senior vice president, chief financial officer. Joined in 1996. Responsible for accounting, treasury management, banking relationships, capital market activities, investor relations. Named CFO in February. Earlier was corporate controller, treasurer, assistant treasurer. Prior to Standard, worked for Arthur Andersen in OC. Graduate of UC Santa Barbara.
• John Babel, 38, senior vice president, general counsel, secretary. Oversees legal, compliance. Joined in 2002 as associate general counsel, promoted to VP in 2005, then SVP in 2008. Named to current position in February. Earlier worked for Gibson, Dunn & Crutcher in mergers and acquisitions. Graduated magna cum laude from Bowling Green State University. Law degree from Georgetown.
• Peter Kiesecker, 48, senior vice president, mergers and acquisitions. Joined in July. Key player with company’s plans to buy several hundred million dollars worth of land in next few years. Previously California president of Lennar Homes, also president of GreenPark Land Development. A Greystone Homes founder. Arizona State graduate. MBA from Pepperdine.
• Heather Breidenthal, 37, vice president, human resources. Joined in 1998, promoted to vice president in 2005. Heads up employee relations, compensation, workforce planning, recruitment. Bachelor’s from Cal State Long Beach in business, concentration in human resources.
