This simple ancient Chinese proverb says enough. Unless a contractor knows where he or she is trying to take their business, they probably won’t get it there. Unfortunately, many of the contractors I am familiar with are not strategic thinkers or planners who have long term company goals clearly in mind.
Tactics
Contractors are expert tacticians. The construction business is intense, complex, risky, and full of surprises. This frenetic business environment calls for hands-on leadership which bodes against leisurely, long-term strategic planning.
Tactics are the attention paid to each step. Tacticians don’t focus on the road ahead, but rather pay attention to where each foot is being placed. They drive projects along step by step, bobbing and weaving their way to completion. As one project leads to another, a construction company may or may not be heading toward the contractor’s intended destination.
This is why when construction companies fail, the contractor is almost always surprised. While he or she had their head down dealing with a mountain of daily details the company drifted toward insolvency. In other words, while being a diligent and expert tactician you can lose sight of your company’s ultimate destination. You might say contractors are like the decent folk in Garrison Keilor’s “Prairie Home Companion” who spend their day doing what has to be done.
The Art of War
The Art of War written centuries ago was a book about war strategy that it is often interpreted for use in business, politics, sports, and life in general. This famous strategic military book became a bible of business in the 20th century. The author, Sun Tsu, advises:
- Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.
- In the midst of chaos, there is also opportunity.
- He will win who knows when to fight and when not to fight.
- He will win who, prepared himself, waits to take the enemy unprepared.
When Vision Becomes Strategy
As we discussed last week, all successful contractors have some vision of their company’s future in the back of their mind. The function of long-range planning is to clarify that vision and make it more concrete. Once the contractor’s vision is clarified, the map to convert the vision into reality becomes more apparent. The steps along the way if not planned will go in the right or the wrong direction. Tending to the journey step by step while keeping the intended destination in view is the path to success in the construction business.
“He will win who, prepared himself, waits to take the enemy unprepared.”
From Captain to General
Military strategy taught at West Point assigns tactical maneuvers to the Captain in the field. The General back at headquarters is responsible for the strategy which informs the tactics.
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”
When contractors start out in business, they are captains. The tacticians who manage the battle plan step by step. However, when a construction company grows to a certain size, the contractor Captains must move on to the General’s role. It is now their job to plan victory. They must imagine what victory for their company looks like and craft a battle plan that their captains in the field can execute.
“He will win who, prepared himself, waits to take the enemy unprepared.”
What Does a Strategic Business Plan Look Like?
A contractor’s business plan is a representation of his/her vision, created to drive organizational purpose and direction. It can be broken down into four equally important components: Strategic thinking, long-range planning, operational planning, SMART goals.
- Strategic Thinking – Asks the big questions: Who are we? Why are we in business? What business are we in? Who are our customers?
- Long Range Planning – What are our strengths? Limitations? Opportunities? Threats?
- Operational Planning – Objectives, action plans, timelines, assignments, and systems of accountability.
- SMART Goals – Specific, Measurable, Achievable, Relevant, Timely.
This, of course, is the barest outline of one way to view long range planning. For the next four weeks we will dissect each of these four components and apply them to the construction business. Keep Sun Tzu’s advice in mind:
Victorious warriors win first and then go to war,
while defeated warriors go to war first and then seek to win.
For more information on strategic planning, read more at: PLANNING
For a broader view on role and duties of a CFO, read more here: GROWTH
To receive the free weekly Construction Messages, ask questions, or make comments contact me at research@simplarfoundation.org.
Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you.
