The Big Lie of Strategic Planning

Strategy and planning are two very different things requiring two very different mindsets.

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Calling it “Strategic Planning” is the first place that can send teams down the wrong path as Roger Martin describes in this great webinar from Harvard Business Review.

Reading List: The Big Lie of Strategic Planning. Harvard Business Review. Roger Martin: Asking the Right Questions.

Strategic decisions have always been the most highly leveraged decisions that leaders of contracting businesses make.  These decisions are becoming even more complex and critical as the industry is being rapidly transformed by major industry trends including project delivery, technology and talent.  

Strategy is about asking what game should we really be playing.  Planning is about figuring out how to play that game effectively.  This is not a linear process but rather an iterative process going back and forth between strategic vision, alignment of the team, planning within resource constraints.  Teams that try to rush through this process as if it were a project usually end up with a simple plan resource-based plan.  

We see this frequently with contractors because project planning is 100% about planning with known means, methods and resource constraints.  The very skills that make contractors effective builders become a hindrance to true strategic planning.  

An experienced 3rd party facilitator is worth their weight in gold during this process.  They can keep you on-track truly assessing your capabilities as they compare to the industry.  They can broaden your thinking by bringing in outside industry information. They can align your team through structured exercises. 

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Impacted Productivity - Stacking of Trades
Each crafts person needs about 200 of usable square feet for a productive installation. This assumption is included in production units used to estimate and budget projects. Having less than that can impact productivity up to 50%.
Process Improvement and Cycle Times
When contractors grow inefficient processes usually get substantially more inefficient dramatically changing the Return on Investment (ROI) model. Saving a few minutes over 1,000 cycles per month means $60K+ potential savings over a couple years.
Lead Measures and Outcomes: Starting with the Schedule of Values (SOV)
It is nearly impossible for a contractor to have consistently great cash flow if they have a Schedule-of-Values (SOV) that isn’t loaded properly and integrated with the project schedule, including a projection of the cash flow.