Six Steps to Singing Hallelujah in the New Year Despite Contradictions
Right, wrong or indifferent, it seems like everyone has an opinion about the commercial construction industry in 2014. In the press, terms such as “Disappointing,” “Greater than Expected,” “Slower than Expected,” “Barely Acceptable,” “Bright Prognosis,” and “Conservative Optimism” are thrown around like they’re the gospel. What a menagerie of seemingly conflicting outcomes.
One such opinion leader McGraw-Hill Construction’s Dodge Outlook forecasts that U.S. construction starts will increase in 2014 by 9% or $555.3 billion which is 4% higher than what was predicted in their 2013 revised estimates. Their opinion is bolstered in part by the Architecture Billing Index (ABI) which has continued to rise through the fourth quarter of 2013. The ABI tracks dollars being spent with design and engineering professionals and is seen as a leading predictor of future construction spending.
Fortunately, we don’t have to be Harvard-educated economists to glean new insight from all the economic noise in the market. What we do know unequivocally: some sectors will do better than others; there has been an uptick in architectural billings; labor shortages continues; residential construction is in a growth spurt; uncertainty persists in government spending; domestic oil production has improved significantly; the Affordable Healthcare Act will continue to be a divisive issue.
The bottom line is that most experts and/or indicators predict steady, albeit moderate, growth in most sectors of our industry.
This is all good information, but who really cares whether the numerous predictions are the gospel or simply blasphemy if you aren’t getting your share of the proverbial pie?
6 Steps to Planning Your Business Strategy in 2014
The following steps could prove instrumental in helping you sing hallelujah louder in the new year:
1. Evaluate Your Infrastructure
If you going to be a serious contender for a bigger piece of the pie, you need to make sure that you have the proper infrastructure in place to manage the slice. Do you have the right human resources, certifications, policies, insurance, capabilities, capacity and scale to take on bigger chunks without compromising on the quality of delivery and jeopardizing existing business or overall effectiveness?
2. Segment the Market
Whatever the actual size of the pie, it’s too large for one company to consume. Therefore, segment the pie into manageable sectors by identifying sectors where you have the greatest chance of securing work. What projects naturally appear to be low hanging fruit? Or, maybe it’s time to establish a niche especially if you have great contacts with a particular entity or industry sector or have unusual expertise. Once you have identified your area of pursuit the remaining steps should be geared toward these general areas.
3. Invest in Relationships
Determine what relationships need to be established or reengaged to improve your chances of obtaining work. The specific procurement process for a project will determine who you’ll need to engage. For example, if you are going after municipal work, you will probably need to know the small business and procurement personnel and the architects who work with that particular municipality. Even with hard bids it can be difficult securing work if the right people don’t know you.
4. Devise a Strategy
Every pursuit, no matter how routine, requires a well thought out strategy to maximize the chance of success. In fact, any strategy is typically better than no strategy at all. Here’s a down and dirty way to develop a rough strategy for any situation: start with the end in mind and work back to the present as you identify all major obstacles to achieving your objective. Devise key mitigants for all obstacles, and the resulting analysis will resemble a rough strategy.
5. Execute to Win
Now it’s time to implement your strategy to win your project. Ensure everything is in place. For example, your bonding, qualifications, credentials and past performance. Whether it’s a hard bid, RFP or negotiation, you need to fully understand the rules of engagement in order to maximize your strategy.
6. Exceed Expectations
You have the project, now determine the customer’s needs, then meet and exceed them. If you’re not sure what exceeding expectations looks like, then find a respected mentor in the industry to imitate until you find your own rhythm and set a pattern for ongoing success. And, we all know it’s more expensive to secure new business than to cultivate existing business.
Happy Holidays and we pray that you and your loved ones have a fabulous New Year. And, don’t forget to sing hallelujah as you enjoy the pie.
Vince Fudzie MBA, CPA, CIRA, is the Managing Member of Triune. Founded in 1997 with headquarters in Dallas, Triune is a leading, integrated design-build General Contractor in the Southwest region of the country.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry.
Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.