Due to the coronavirus (COVID-19) pandemic, it may appear that strategy is dead; that strategic long-term planning and its connection to short-term action and results are no longer relevant to a company in survival mode. You may also believe that it’s time to batten down your corporate hatches. With a global recession looming, it’s time to stop wasting effort on the long-term and only focus on the here and now, right? Wrong.

This article will show why now, more than ever, leaders must create and share a plan for their companies’ future with a focus on short-term actions. It will illustrate that strategy is alive and well despite, and possibly because of, the uncertainties we face.

Strategy Is Changing…Again

Longtime CFMA Building Profits readers will recall when strategic business planning was rashly declared dead. In the late 1980s, some companies made the mistake of freezing strategic business planning because of uncertainty about the saving and loan (S&L) crisis. In 1999, technological uncertainties related to Y2K forced strategy to change again.

Strategic change was yet again necessary following September 11, 2001, and then once again in 2008 with the economic uncertainty of the Great Recession. Now, in 2020, strategy is changing due to economic and health uncertainties surrounding the COVID-19 pandemic.

Strategic business planning encompasses both long-term vision and short-term accountability for results. The whole strategic view is shifting from the long-term vision to the near-term tactical response. Throughout your company, strategy requires urgent attention now more than ever.

How you respond to COVID-19 must be strategic. And, you may be more strategic now than you realize:

1. Have you changed your strategic thinking in recent weeks?
2. Is your executive team acting differently in an effort to survive this new normal?
3. Are you researching trends in your core markets and with your key customers to minimize uncertainty?
4. Are you just as fearful of a global economic recession as you are of COVID-19 itself?
5. Are you carefully and quickly implementing contingency plans?
6. Are you sticking to your core purpose and values?
7. Is your response to the COVID-19 pandemic total or all encompassing?

If you answered yes to these key questions, you are acting more strategically than you think – even if your strategic priorities are now more short-term than they were a few months ago. Your company may be implementing changes in four critical areas to all construction businesses:

1. Growth, marketing, sales, client relationship management, estimating, preconstruction, and supply chain innovation.
2. Operations, lean, project management, field production, fleet, equipment, yard operations, and safety.
3. People, culture, leadership development, governance, internal communication, and technology utilization.
4. Financial performance, risk management, and communication of financial information.

If you’re a CFM who is being proactive and remaining mindful in these four critical areas, consider yourself a role model.

Volatile, Uncertain, Complex & Ambiguous

Companies plan in order to cope with and utilize uncertainty. As future-oriented strategic planners in the U.S. construction industry, we have seen and appreciated just how volatile, uncertain, complex, and ambiguous (VUCA) the construction industry is, as well as how complex your roles as CFMs can be.¹

We believe that the only constant in business is uncertainty. Therefore, we implore construction company leadership teams to research, develop, document, communicate, implement, measure, and continuously modify a written strategic plan in order to grow their strategic thinking skills.

While there are corporate leaders who are doing their research and adjusting their plans due to the COVID-19 pandemic, there are others who think that the best strategic plan during times like these is no plan at all. When business conditions really shift, especially as dramatically as they did in March 2020, these are the leaders who say, “Told you so. Planning is a waste of time and COVID-19 is the proof!”

Generally, and anecdotally, these are the same leaders with some mix of the following corporate defects:

• Limited growth potential
• Thin margins
• Unsuccessful leadership and ownership succession plans
• A poor response to the Great Recession
• Unclear brand identity
• Low percentage of repeat work
• Work that can only be won on price, high employee attrition, disengaged top leaders, and lower earnings before interest, taxes, depreciation, and amortization (EBITDA)