As we discussed recently, UConn basketball coach Dan Hurley used strategic analysis to defeat Purdue in the national championship game. His example should clear up any confusion about the word “strategic”. All analytical thought toward a well-defined objective is strategic thought. Everyone reading this message engages in strategic thinking at one time or another.
The Present
It may be helpful to remember that all thinking occurs in the present. We can think about the future, but we can’t think in the future. Planning for the future is done in the present. Strategic planning (even though the word planning implies future) is a present moment, real-time activity about what to do in the present to affect desired outcomes in the future.
Data to Information
Coach Hurley needed information about the Purdue Boilermakers to develop UConn’s strategic game plan. The score of one previous Purdue game is only a data point that would give him little insight into how to beat Purdue. Rather, coach Hurley would have spent endless hours analyzing game film of every game Purdue was in on their way to the championship game. The collective data points the coach would be able to glean from the game films would become the information he needed to formulate a strategy. His goal was to win the national championship. He guided his team to that outcome by collecting enough historic data about Purdue’s competitive style to turn the data into information that then morphed into his victorious game plan. (Plus, he was careful to wear his lucky hat.)
Unconscious Planning
So, strategic planning is something you do every day. You constantly take in data regarding jobs underway, jobs proposed, and bids available. You monitor your cash flow, visit your trades people at the job site, and browse through the Dodge Reports. You take in seemingly unrelated data points and gradually they congeal into decisions.
- You instruct your estimators to bid a particular job.
- You tell your project manager to have a meeting with the teams on his job. They need guidance and encouragement.
- You have your CFO extend payment terms to manage cash flow.
- You promote your best superintendent to project manager.
Decision making combines multiple data points into a body of information that enables you to make decisions for executing your (unconscious) strategic plan.
Recognizing Your Ultimate Goals
Construction professionals have goals for their businesses in the back of their mind. They are usually more conscious of immediate short-term goals and rarely make longer term goals (five years out) consciously. The first step in turning the strategic thinking you do every day into strategic planning is to make ‘conscious’ the goals that are in the back of your mind.
- I want to increase our geographic area.
- I want to increase the number of larger projects (or smaller projects).
- I want to initiate a training program for field and office managers.
- I’m planning to sell the company to my employees through a leveraged buyout.
These are just a few examples of typical contractor long-term goals that my clients have expressed over the years. In every case, they were quite clear on where they wanted their company to end up in the long term, but rarely did they have a detailed plan for how they were going to get there.
Strategic Planning
Strategic planning is the process of converting inert historic data points into a body of information that enables the decision making for allocating resources to bring about desired future outcomes.
These are the steps for formulating a strategic plan:
- Clarify your long-term goal. (If you’re an owner/operator, your personal goals should be codified.)
- Identify your data collection professional. (This is usually your CFO, but in larger firms you may employ a director of corporate planning.)
- Collect accurate historic data. (I usually required at least five years of corporate financials to analyze the strengths and weaknesses of a construction firm.)
- Organize data into decision making information. (Data points become information when you have enough of them to spot trends, bad habits, one off mistakes, chicanery, and potential victories.)
- Use information to allocate resources along the way. (This is decision making.)
- Track progress toward the ultimate goal. (Current data analysis will reveal trends toward or away from your desired outcome.)
- Make adjustments and corrections based on new data. (Don’t be afraid to make changes along the way.)
- Know when to declare victory. (Don’t let greed or ego cause you to blow past your planned objective.)
If you believe in Coach Hurley’s strategic approach to basketball, then you will be eager to apply the same technique to getting what you want. Next week we’ll discuss the steps to take to get what you want.
For more information on strategic planning, read more at: STRATIGIC
For a broader view on growth, read more here: GROWTH
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Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you.
