Strategic Planning #2



The last three blogs of 2019 are concerned with planning for 2020 and beyond. Last week we discussed the unexamined beliefs held by most construction CEOs that prevent them from adopting vigorous formal strategic planning procedures. This holiday week we would like to examine the role that recognizing trends plays in business planning.

The Weatherman as Planner


Planning is the process of making decisions in the present to affect future outcomes. The meteorologist predicts tomorrow’s rain by analyzing the historic implications of present meteorological conditions and causes you to take your umbrella when you leave for the office the next morning. In other words, by looking carefully at developing weather trends, the weatherman influences tomorrow’s decision to take your umbrella and keep yourself dry from the parking lot to your office. By recognizing the informative value of weather “trends” you and the weatherman engaged in the first step of strategic planning.

Construction Industry Trends – (2017 – 2018)

Let’s take a look at some of the trends emerging in the construction industry.

  • At $951 billion dollars, 77% of construction spending occurred in the private sector in 2018.
  • Single-family residential construction is estimated to be $267 billion in 2020.
  • Multi-family residential construction rose by 7% last year, with $65 billion in estimated value.
  • Commercial construction was $85 billion in 2018, up 11% from the previous year.
  • Construction for the manufacturing sector decreased by 16% in 2017.
  • Construction related to power and energy distribution fell by 5% in 2017, though it was still valued at $100 billion.
  • 10.6 million people worked in the construction industry in 2017.
  • The average hourly wage of all construction employees was $29.95.
  • The construction industry added 297,000 net jobs in2018.
  • 90% of U.S. general contractors reported that they are concerned over the labor shortage.
  • 37% of firms are experimenting with drones
  • Just 11% of general contractors are using wearable technology.
  • Last year saw a 12% growth in the number of construction firms using Building Information Modeling (BIM) software.
  • 75% of construction firms now promote themselves through social media.
  • 82% of contractors agree that BIM (Building Information Modeling) is the future of project information.
  • 90% of all global infrastructure projects are either over-budget or delayed.

 Decision Making

The data above identifies trends in the construction industry. Some of the data may have sparked your interest and some just went in one ear and out the other. Notice, though, that the data points that triggered reaction are already becoming part of your strategic plan for 2020. The process, at this point, may be informal but it is happening none-the-less. You may not be aware of it, but you are engaged in strategic planning. You are about to make some decisions that will alter the course of your business in 2020.

  • Maybe you’re reminded to crank up your recruiting of skilled labor.
  • Maybe you’ll take a closer look at the benefits of BIM.
  • Perhaps you’ll bid more work in the energy sector.
  • Single family construction looks dependable. Let’s expand our efforts in that segment.
  • Let’s develop our Drone technology…etc…etc.


We’re All Informal Strategic Planners


Even though many construction CEOs appear to be biased against strategic planning, they are engaging in it almost every day. They are cognizant of industry trends and aware of the implications for their individual firms. They make decisions almost daily that affect future outcomes. They are habitual natural planners. That’s how they have gotten where they are in this highly competitive industry.


Formalizing the Planning Process


If you’re already engaged in subliminal strategic planning, why not formalize the process, write it down, and communicate it to your company in a clear and compelling manner. The transformation from informal to formal only requires the following three simple steps:


Step 1 – Surrender the negative bias that has kept you from recognizing the value of formal strategic planning.

Step 2 – Recognize that you are already engaging in strategic planning when you make decisions in the present that affect outcomes in the future.

Step 3 – Turbocharge the impact of your natural planning instincts by formalizing your plan in written form and communicate it to your entire organization.

Next Week


We’ll talk about the third step – formalizing your plans in written form and communicating them to your company in an orderly, compelling manner.

Read More: Strategic Planning.