Marketing 101

Strategic Planning:
The Key to Growth

Larry Silver
Contractor Marketing, Inc.

Is your company reactive to everything that happens or proactive, seeking your preferred destiny? Most contractors are operations-driven and are just plain busy trying to accomplish the work right in front of them. Very few actually sit down to plan out where they want to be over the next year or two.

We have observed that the best way to control your firm's growth and to function as a healthy management team is to do regular planning. It is not that you will be unable to make money if you don't. Of course, many firms never do planning and still do just fine. However, there is a difference in professionalism and leadership in the progressive companies that take the time to hash out their future direction.

The unique process of projecting your firm's growth and changes in upcoming years is called strategic planning. It is both a current assessment of where you are and a course correction of where you would like to be in the future.

It is typically in this arena where contractors choose to pursue niche markets and ideal client relationships, where issues and risks get discussed critically. Every year should find new potential opportunities, threats to weigh, and significant changes to implement among the team.

Hire a Facilitator
The first step to doing strategic planning is to hire an experienced facilitator who can draw out a current assessment of the firm's strengths, weaknesses, opportunities and threats. They will also help to identify the issues and risks, and lead the planning process to a clear path of implementation. This can normally be done in 30 to 45 days.

The Strategic Planning Retreat
If the facilitator does a good job of assessing and identifying the issues/risks facing the business, then it is time to take the management team on a strategic planning retreat. This is best done over a two-day period away from the workplace. The agenda must be followed jealously as the time will go faster than imaginable. The first day should clearly confirm the assessment without going into great detail.

I like to see the staff agree on the firm's greatest strength and re-group how best to promote this greatest strength. It is necessary to also focus on the weaknesses, opportunities and threats. The balance of the first day should concentrate on the four or five major issues facing the company in the short term.

The second day should be a time to select champions and discuss implementation goals to secure the needed changes.

Monitoring the Strategic Planning Process
As a follow-up to the strategic planning retreat, it should be mandatory for the champions to confer at least monthly on the progress of the plan. I encourage that the facilitator stay in the loop to bring some outside accountability to bear on the initially zealous retreat plans.

How Does Your Firm Rate?
Contractor Marketing has developed the "Strategic Planning Grade" as a diagnostic tool to assist contractors to rate themselves and show areas in need of improvement. The ten categories are interrelated and have weighted point values.

Written Strategic Plan (15 points) — It is wonderful if the President has the plan in their head, but that hard drive can crash and leave everyone else in the dark as to future direction of the company. It must be written succinctly and practically.

Champions to Oversee Key Issues (15 points) — Each major objective stated in the strategic plan should have at least one champion to lead the charge to positive change. This champion agrees on a reasonable timeframe to carry out the needed change and will be held accountable by the management team running the company.

Implementation Ability (15 points) — How well does the firm/champions carry out the objectives jointly decided by the team? Many firms have learned the importance of planning, but very few do a good job implementing these plans. Only the progressive, innovative and empowering firms do a superb job moving forward with relative ease.

Healthy Human Resource Function (10 points) — The key issue that we observe in planning is the people issues. The ability to select, train, retain, motivate, lead, compensate and change is rare, especially in the construction industry. We are more competent building structures than we are people.

Leadership Development/Training (10 points) — The leaders of a company determine the culture, the values, the business approach and philosophy. They set the tone for the rest of the staff.

Target Market Focus (10 points) — It is wise to consider new opportunities and target markets every time that you meet. Which market segments make the most sense to pursue with your firm's experience and capability?

Clear Vision, Mission and Goals (10 points) — I know that these items seem soft to the reader, but perhaps they direct much like a small rudder does a huge ship. They need to be clear, distinct and relevant so that the staff is all pulling in the same direction.

Internal Communication/Morale (5 points) — How well do your employees communicate with one another? Does the office and field stay in sync? Does upper management let the troops know what the key issues are? This factor impacts the overall morale of the company and creates the energy for the client to be serviced and satisfied.

Monitoring Mechanisms (5 points) — Do we know when our plan or projects go off track or is it too late by the time we realize it? How well do we keep score on the foundational basics?

Marketplace Position (5 points) — Where do you stand in light of your competitors? What differentiates you from every other contractor in your market area claiming to be quality-oriented, on time and within budget?

How your company measures up to these key points will help you and your staff in refining and moving forward with your strategic plan.

Larry Silver is Editor of Contractor Marketing, the first marketing magazine just for contractors. He can be reached at (937) 864-5854 ext. 11, or you can visit their web site at www.contractormarketing.com.