Given the challenging labor market, rising inflation, increased construction demand, and volatile material and equipment market, a robust strategic plan provides an opportunity for construction leaders to articulate their goals to their team, prioritize challenges, and develop solutions.
When done well, the planning process is just as important as the resulting strategic plan because it provides a greater understanding and support for the plan across the company, improving the likelihood of its success.
This article outlines the steps construction organizations can take to aid their strategic planning, as well as identifying and creating key performance indicators (KPIs) to measure success.
Developing a Robust Strategic Plan
Strategic planning is an ongoing process that enables an organization to embed flexible, strategic decision-making throughout the company to stay on top of economic trends, labor challenges, and business changes while sustaining forward momentum.
An effective plan can help your business set expectations, establish accountability at multiple levels, track meaningful outcomes and metrics, communicate results to internal and external stakeholders, and incorporate directions for following up on results. In short, it sets the stage for the next strategic plan and sustainable success.
Let’s look at four key aspects that every strategic plan should accomplish.
A Long-Term Vision to Guide Strategic Decisions
This end state is where you and your organization want to arrive. It may be helpful to frame this with context specific to your business; for example, the end of a transition or the start of an important project.
To ensure your vision resonates throughout the organization, think about the strengths of the company as well as the areas that will require growth. It’s helpful to limit the scope of detailed planning to a 3-5-year horizon. Short-term goals will be encompassed in the roadmap or path, and longer plans may lack the certainty to gain full acceptance.
Engagement at All Levels
Full buy-in and alignment throughout the organization depends on everyone understanding the company’s goals and how they relate to their individual roles.
While strategic plans are most often shaped by the company’s leadership, consider using employee focus groups, surveys, and check-in meetings throughout the process to shape the strategies and activities that will help achieve the company’s goals. As the plan is implemented, these should align with department- and division-level performance measures, so each team can track its progress and contribution toward the company’s mission and vision.
An Understanding of Your Current State
You must understand not only how your organization arrived at its current state, but also where the company is in relation to its long-term vision. The strategies that helped your organization succeed in the past may not be what’s needed to move the company forward.
As needs change throughout your company’s life cycle in addition to economic fluctuations, your organization should regularly consider the following:
- Why do we do things the way we do them?
- Do we have the right people in the right roles?
- Can we operate more efficiently?
It may be helpful to frame this as part of a story and acknowledge the role that members of the organization played in getting the team to this point.
A Clear Path to Your Desired Future State
With an understanding of where your company is and a clear vision for where it’s headed, the pathway is ready to be defined as a series of steps or intermediate goals. These steps are often interdependent, and it helps to identify, where appropriate, any parent-child or precursor relationships. For example, establishing a leadership development program to retain and develop managerial talent in your company might require identifying an executive champion, determining who in HR will lead the effort, and developing training content prior to launching the program.
A transformational, organization-wide strategic plan is likely to get complicated. While it’s important to have task-level details at the time of execution, trying to explain that level of detail in a presentation might be a challenge. In the initial briefing, it may be better to explain these steps or intermediate goals at a higher level. Too much detail may make the plan hard to understand while too little may make it difficult to execute. Provide a balanced perspective for your audience.
In the context of telling a story or creating company knowledge, think of this as writing the next chapter and use the opportunity to help people see their role in the plan. Keep in mind that good plans have top-down direction and bottom-up refinements. Leave yourself time and space to account for feedback along the way.
Identifying External Challenges & Opportunities
All organizations face challenges to achieving optimal performance — especially changes related to the COVID-19 pandemic that have already been seen. When developing or updating a strategic plan, identify the key challenges to success — such as material and equipment cost increases, labor shortages, and inflation — and ways to reduce these risks.