There’s a lot of truth in Yogi Berra’s quote, “If you don’t know where you’re going, you’ll probably end up somewhere else.” Choosing a direction is crucial to a construction organization’s success.

Although direction is important, other fundamental steps in the strategic process could, if forgotten or dismissed, weaken execution and lead to strategic failure. However, by thoroughly and consistently addressing five questions, an organization can significantly improve the probability of strategic success.

1. Core: What Is at the Heart of the Organization?
The core is best described as the heart of an organization and refers to values, vision, mission and purpose. Most everyone is familiar with these concepts, but not all completely understand their significance. Clearly defining, communicating and building a solid core into a company’s DNA is critical. If the core of an organization is weak, strategic plans will ultimately fail, no matter how brilliant the plans may appear. Some companies misunderstand the importance of owning a strong core, and it’s evident in their behavior and performance.

Following are definitions of an organization’s core.
  • Values. The principles that guide an organization’s behavior. 
  • Vision. The organization’s desired future state.
  • Mission. The unique way an organization serves its customers. 
  • Purpose. The reason a company exists in the market. 
2. Assessment: What Is the Organization’s Current Condition?
Many companies want to avoid this step of the strategic process because developing the answer requires taking an honest look inside the organization.

First, assess historic performance by company, division, project type and customer, as well as financial strength (e.g., working capital, borrowing and bonding capacity, and other key ratios).

Then, perform a thorough “SWOT” analysis with the leadership team. Keep in mind: strengths and weaknesses refer to internal aspects of a company (e.g., performance, people, processes, tools, technology, etc.), while opportunities and threats refer to external market conditions (e.g., competition, the economy, and environmental, political or regulatory issues).

Additionally, survey employees and customers. For employees, use an anonymous (preferably online) survey that allows respondents to score the organization on key areas such as core values, trust, leadership, benefits, morale and training. This is one of the most effective tools to use in an assessment that has lasting benefits. For customers, use a short survey and touch on areas such as quality, performance, responsiveness, professionalism and schedule. Regardless of the audience, surveys should provide ample room for comments.

The introspection involved in this assessment step can be difficult. When done right, the assessment process is an effective strategic tool; it reveals cracks, breaks down barriers and builds trust throughout the organization.

3. Goals: What Are the Organization’s Major Milestones?
There are probably more books written on goal-setting than actual goals being set. A construction organization should focus on asking, “What if?” and define the major goals it wants to achieve during the next three- to five-year period. This exercise can be very energizing and often leads to breakthrough ideas. Following are a few simple suggestions to aid the goal-setting process.

Set goals that are consistent with the organization’s core.
  • Use a team approach; collaboration builds buy-in. 
  • Stretch, but don’t leap beyond what’s possible. 
  • Brainstorm many goals, but only choose two or three. Too many goals leads to poor focus and disappointment. 
  • Bring clarity to each goal through measurables (e.g., grow health care construction market share 25 percent). 
  • Set goals that capitalize on internal strengths and external opportunities.
4. Strategy: How Can the Company Achieve Its Goals?
This question defines the game plan or strategies to achieve a set of goals. Strategy often gets confused with tactics used to execute a plan. To clear that up, think of a construction company with a major goal of growing 10 percent per year. A set of strategies might focus on geographic expansion or adding additional services.

Following are a few points to remember when setting strategy.
  • Strategies are broad descriptions of how a company achieves its goals. 
  • No more than two or three strategies should be set for each goal. 
  • Strategies should be consistent with an organization’s core. 
  • Thoroughly assess the organization’s capacity to execute before finalizing strategies. 
  • Avoid chaos by prioritizing and coordinating strategy execution. 
  • Anticipate market reaction ahead of time by developing alternative strategies. 
5. Tactics: Who Is Responsible for Executing Strategies?
Tactics are the feet of strategy—the ground-level actions necessary for execution. Tactical items map out specific actions, responsibilities and target dates for selected strategies. This last step is where many strategic planning exercises lose momentum or fall apart. Organizations can get caught up in the energy of setting goals and strategies and forget to develop tactics. Avoid the temptation to gloss over this step by:
  • developing a set of specific action steps for each strategy;
  • creating a bullet point list identifying who, what and when (but avoid writing a manual); 
  • making sure tactical steps and due dates are clearly documented, communicated and understood by the responsible parties; and
  • anticipating potential tactical changes. 
By getting back to basics and addressing these five fundamental strategic questions, a construction organization can create a framework for making clearer decisions and significantly improving the probability of successful execution. More importantly, by consistently following the strategic process outlined above, a company can build lasting value and grow into an organization that owners, employees, customers and communities admire. 
 

Making the Strategic Process Stick
  • Avoid putting the entire strategic plan at risk by failing to define and understand the organization’s core and current condition. 
  • Achieve buy-in by involving key people across the entire organization. 
  • Frequently reinforce and communicate the company’s core, goals and strategic direction. 
  • Be flexible on strategies and tactics; adjust them as needed. 
  • Set priorities for strategies and tactics.
  • Implementation should be well-choreographed to avoid chaos, frustration and failure. 
  • Celebrate short-term wins. Doing so builds morale, momentum and a commitment to the organizational core and goals. 

Alan Schlotzhauer is president of 2717 Group, LLC. For more information, call (480) 800-4107 or email alan@2717group.com.