Masonry Magazine April 1994 Page. 14
Specific Strategies for Prospering in the '90s
Contractors operating in the decade ahead must take a close look at how they operate and do business. Many will have to get back to business basics in order to prosper. The following ten strategies are key for not only surviving but prospering in the rapidly changing market of the '90s.
Strategy # 1: Make It Easier for the Customer to Buy Construction Services
The inherent conflict among architect, owner, general contractor, and subcontractor cripples the construction process, resulting in higher costs for everyone. The lack of communication and teamwork among the various parties often prevents working toward a common goal and requires each to be focused on on his own area and problems. As if the external party conflict weren't enough, add the usual concurrent internal conflict within each company-accounting vs. management, office vs. the field. estimators vs. project and field managers and you have a difficult environment in which to sell your services. Does this scenario sound familiar?
"Partnering" all the working entities involved in a project leads to big results. Construction costs could be decreased from ten to thirty percent simply by developing team relationships designed to forge open communications and standardize operating procedures. Creating an interdependence of success that replaces the traditional independence of project construction will decrease overall risk and improve contractor profitability. The owner will get higher quality at a respectable savings. Figure 1 summarizes the partnering concept.
Another way to make it easier for the owner to buy construction services is for companies to join with other companies that share similar business philosophies and objectives. Strategic alliances allow the participating companies to capitalize on collective strengths while bridging across individual weaknesses. The alliance should focus on standardizing project management controls, scheduling, trade coordination and clearly defined quality control processes. Complementing trade contractors can also leverage their marketing efforts on design build/negotiated work by sharing leads, making combined presentations to the owner and/or general contractor, and implementing joint marketing efforts. Figure 2 shows the two types of strategic alliances.
Strategy # 2: Create Well-Defined, Visible Business Objectives
The days of being everything to everyone are over. Customers don't believe you can, and neither do your employees. The Jack-of-All-Trades method of doing business confuses everyone. For your customer, the confusion is in wondering how you can be the low-cost producer (a Yugo) and a value-added producer (a Porsche) at the same time. As for your employees, what do they sell and on what basis do they make decisions? Look at Figure 3 for an example of differentiating.
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