Charlie Myers: Are You Working on Your Strategic Plan?
With the robust construction environment in Texas, it is easy to sit back and enjoy the growth that is occurring for general contractors. As a general contractor that is celebrating 30 years in business, I have to admit that most of the time, I’m watching the trends for those red flags. No matter how great business is and how many projects fill the pipeline, I’m of the opinion that you make your future happen. You just don’t let it happen.
This is the time of year when we carve out time to scope out that future. We set aside several days offsite and bring together our officers, business unit leaders, and department heads to discuss every aspect of our business from operations and training to safety and staffing to market conditions and opportunities. We bring the most current market data to review which enables us to evaluate existing markets and identify potential new markets to explore. The discussions are collaborative and congenial but intense, and the decisions we make in those meetings help to guide us for the next two years at a minimum, and five years at best.
We also conduct a best practices review because we know the value of instilling excellence throughout our firm. In this exercise, we evaluate those areas of strength, and those where we are weak and need to improve or retool our processes. We always ask the question: Why do we do the things that we do? Often, this question exposes alternate ways to accomplish the same goal while increasing revenue or profit margins.
There is a review requirement, too, that we expect from each participant. We review each business unit’s performance over the past year. We review each department’s performance and related challenges, and we do a deep dive into our corporate financial results and goals. When times are great, as they are now, we don’t just celebrate and run our victory lap. We analyze how we are going to make the new numbers that we project for the next year and the next, but it is not all about financials. We review how we are perceived by our employees, vendors, peers, and clients—and adjust accordingly.
This process of examining our future by developing a sound strategic plan also involves analyzing the risks of growth and developing survival strategies, including retention strategies, in order to be best of class in the mid-market among general contractors which is our long-term goal.
Of course, many of our competitors and major players in the commercial real estate industry, such as Manhattan Construction Co. and Rogers-O’Brien Construction, understand the benefits of strategic planning. Our CFO who worked for Cadence McShane Construction, described their planning meetings as being comprised of two separate meetings—one where the focus was on market studies, trends and business development; the other, where financial goals were established for a varied mix of stakeholders.
In the article, The 7 Benefits of Strategic Planning, author Helen Mitchell states “one out of every three companies at the top of their industry will not be there in five years.” She credits that to the fast evolving world markets and believes those companies without focus, without a solid foundation built upon a sound plan, cannot adapt quickly enough for unanticipated changes.
In 1995, when we were a very small general contractor, our needs were different but our planning process was very similar. We wanted to understand what we were doing right as an employer. We used a SWOT analysis to identify our strengths, weaknesses, opportunities, and threats. We discussed our goals, learned from our mistakes, and stuck to our plan.
By keeping our leadership and team aligned with those goals, we could plan for capital expenditures, anticipate market challenges and opportunities, and reinforce a culture that was both desirable and attractive for recruiting talented people as we grew.
Fast forward to the Great Recession that began in 2008, and by 2012, even in Texas, the market was still soft, and talent was plentiful. It was the perfect time to diversify, staff up with good people, and search for a new headquarters building that could keep pace with our growth. Without strategic planning, we might not have taken the risks of staffing up and buying a new headquarters nor benefitted from the improving market conditions.
As an industry, commercial real estate has provided growth and job opportunities for many in this region. The building boom in almost every sector is projected to continue throughout Texas in the years ahead. Behind those companies that will thrive and survive any market change are those firms that understand the value of long-term planning and its inherent value in establishing focus and direction, increased profitability, market share, and competitive advantage.
With the year-end in sight, many companies are involved in budgeting and projecting their 2018 goals. Taking the time to define those strategies that will deliver anticipated results and building a strategic plan that addresses every aspect of operational performance for the long-term are necessary steps to continued success.
Charles R. Myers is CEO of MYCON General Contractors in Dallas and co-chairs the industrial and office local product council for the North Texas District Council of ULI. He can be reached at firstname.lastname@example.org.
Read the full article on DMagazine.com.