Strategic Planning: Prepping for Future Challenges and Opportunities

As part of a new regular feature in Professional Remodeler, we’ll be tapping the insights of our National Housing Quality Executive Council in monthly roundtables. This month, Editor in Chief Jonathan Sweet talks to four members of our council – Bruce Case, Allison Iantosca, Denis Leonard and Douglas Shipman – about how remodelers can craft a strategic plan for their business. (Listen to the full roundtable discussion.)

Jonathan Sweet: Let’s get started with the basics. Why should remodelers have a strategic plan? Why is it important?

Bruce Case: A couple things at least from my perspective: One is I want to run the business not have the business run me, and I feel like if I don’t have a strategic plan I’m going to be more of a victim or more reactionary toward the business and what direction it goes.

And the second reason, at least here at Case, is that we have a strategic plan because we feel like sometimes when times are more difficult that’s the best time to move the ball forward, and without a plan, it’s easy to say we don’t have time to do that or we don’t have the capital to do that. But sometimes it’s the right time to do it.

Allison Iantosca: You know I can’t get over how powerful it is to put your goals down on paper. It’s amazing how often I have had things in my head about where I’m headed or what I’m thinking I might do, and its very easy to let those things go. And when I have taken the time to actually write them down onto paper and put them out in front of myself as things I’m wanting to do, ways to move forward and being as specific as possible, when there actually out in front of myself and then the company, it’s remarkable how much you can achieve.

Douglas Shipman: I couldn’t agree more with Bruce that a strategic plan is absolutely required. The strategic plan is going to give you a very clear vision of your financial capital needs, and when you’re out looking for money, whether it’s banks or the private market for some kind of financial backing, you’ve got to have a strategic plan to be able to impress and even communicate even reasonably effectively with anyone in the financial lending market.

Denis Leonard: Bruce had mentioned about being proactive and I think that’s a major advantage of a strategic plan. So many good business people out there can react very well to a situation but having a strategic plan, thinking through what your upcoming year is going to be like, what your resource needs are, to proactively think through the challenges and opportunities that may be out there ... I think the time spent doing that sort of planning, coordinating your resources, can be very powerful.

Sweet: One thing we hear a lot from remodelers is they think this is something big businesses do. How can it help a small business, you know remodelers doing $1 million, $2 million a year?

Case: In some ways I’d argue or debate that it’s more important for a smaller business because the resources—meaning potentially capital but also just the number of people to push an initiative forward—are tougher so it’s even more critical that that business aligns the team pushing the wheelbarrow in the same direction on the right strategic goals.

And the second thing is I feel like with any business, but especially a small business, it needs to meet the personal goals of the owner as well as the business needs and the owners personal goals need to align with that strategic plan and without a plan the owners personal goals won’t get met in which case it can be a tough road for a small business owner.

Leonard: Strategic planning can be easily used and effectively used by a small business.

That kind of fear … with strategic planning is that somehow you have to create this huge complex document, and that’s actually not the case. It’s about creating something that’s going to help you be proactive and is going to support your organization that’s going to be useful to you. And that particular plan and how that’s put together depends on the size of the organization. So there’s no reason why remodelers can’t put together a good strategic plan and get the benefits from it.

Sweet: One thing I want to touch on that Bruce brought up is personal goals and business goals and when putting together a strategic plan what’s the roles those should have in a plan?

Iantosca: On the personal level if you don’t know why you are doing what you are doing in your business or what you’re striving for then its really hard to know how to develop a plan for where your company is going and the why. So there needs to be, especially for smaller company owners, some level of understanding of what your life is going to get out of a successful roadmap. As a company leader it seems critical to me that that is a very clear part of the strategic plan, such that you know what you’re working back from in order to achieve all the goals you have on the personal side of life.

Sweet: Lets take a little bit of a step back. For somebody who wants to try to tackle this, what are some of the elements they need to think of? How should they approach this as they look to getting started with creating their first strategic plan?

Iantosca: Create buckets, if you will, as one way to think about it. There’s a sales bucket, there’s a production bucket, there’s a people bucket, there’s a marketing bucket – they’re ways of just kind of breaking your business out into different pieces and then identifying where you want to go with each of those buckets or where you want to take it. There’s a sort of brass-tacks way of approaching it, and if you are someone who can have a great vision and then has a hard time … turning it into something … it’s a way of breaking the vision down into parts and pieces.

Leonard: I think it’s worth taking the larger view and starting to articulate what the vision and mission is of the organization -- what are you, what is the ultimate goal, what are you trying to be, who are you trying to be as an organization -- to really contextualize. And that might mean defining you’re going to work within a certain city, a certain county, a certain state.

Sweet: Who should be involved in crafting the strategic plans: just the owners? Owners and managers? Do you bring in employees from all levels of the company?

Leonard: Well my personal view is I think it’s worth involving everyone in the organization. I think it gets easier as you do it. The first time you do that it can feel laborious and a little structured and difficult, but it becomes easier and more fluid. The strategic plan is the same way: I think perhaps the first time you do it, it really is the key leaders sitting down and having a discussion amongst themselves about where they think the organization is going.

I think that’s a good way to start it, and then involve other employees.

Particularly in this industry, the people who have the greatest intelligence gathering capabilities are your employees. I’ve worked with construction and production managers who have been with the company for 30 years, 40 years, and they’ve seen the recessions and the booms a number of times in the past. Not listening to them is a huge loss.

Case: The way we’ve tried to do some of this is to almost picture a target with the small inner core ring, and then you have rings going outbound. And so, right or wrong, we started with more the senior management group.

Then think of the next ring; we have different advisory groups for sales and production and PMs, brought it to them, talked to them and got their input -- what’s right, what’s wrong with it, let’s tweak it, let’s adjust it. You know, really work it through. Then we had a series of town halls, so that’s sort of the next ring where we brought larger-size groups together. At least the way we’ve worked on it, we’ve gotten everybody’s input but in a different series of steps and tried to keep the groups smaller because I really do want that honest, deep buy-in and questions and concerns brought up.

Sweet: How often should you revisit this plan and look at it?

Iantosca: My sense is that these end up on the back shelf because they’re too hard to work on. They feel too intangible, and it’s a remarkable process to get from a vision to a strategy to an action plan to an execution plan.

We have spoken of it in our company much like the execution of a project. You have the idea of a kitchen, and it’s beautiful, and there’s a vision to it, and it’s going to glow … and there’s just this wonderful idea -- that’s what the clients call us with.

And then there’s a strategy around how we’re going to deliver that -- a strategy that ties with the vision -- and then there’s an action plan around getting numbers from each of the trades and building a budget and getting to a place where we are signing a contract. And then even beyond that, something very specific: the real who, what, when, where and how test. Can you answer all of those questions for that particular action so that it’s being executed?

I think that’s how you maintain a vitalness and a vitality to your plans so it doesn’t end up on a back shelf, saying we are going to grow; we are going to have 10 new clients next year; we are going to be the top of mind brand in our market. Those are all awesome, awesome strategies, but they need to be as specific and as in-the-moment as possible to get the execution piece happening. Then it feels like a document you really are visiting regularly because it’s your pathway.

Leonard: Kind of a good acid test for your strategic plan is not just how much dust is on it but, did you review it at the end of the year/ In terms of what did you learn from last year’s strategic plan and from last years operations, how on track were you? How good was your vision? And how good was your planning? What was the variance between what you wanted to achieve and what you achieved?

So first of all, looking at how you actually did versus planned is very important, and then learning the lessons from that. What went wrong? I mean, did certain things happen in the market that are outside of our control, but what was within our control that can we learn from? What can we adapt to? What can we change from that we learned from last year that we can put into this year’s plan and help us be more focused in this coming year? I think that backward-looking learning opportunity is so often missed in strategic planning because by definition it’s about looking forward.

Iantosca: Well, back to the employee piece, they want to see that. They want to work with you on that; they want to know that they’ve moved forward and that they’ve had a part to play in that and that they can check some of this stuff off. It’s not just sort of big leader speak about who we’re going to be and where we’re going to go, but did we get there and how did we do it and did we do it together and how can I be a part of it, and if you bring it out on a regular basis, there’s an accountability there as a collective that also gives it some renewed energy.

Leonard: I think that’s a great word, accountability, and it’s back to what you talked about earlier, Allison, about individuals’ being accountable and the steps that it takes in the execution to actually make it happen. Otherwise, you’re essentially pontificating and you’re putting some terms out there and putting numbers out there and it looks like a great plan, but if there isn’t the nuts and bolts, the steps to help you make that happen, it just all falls apart.

And you’re right: people want to know how did we do. We worked hard this year; how did we do based on plan? And if that next year just seems like another number that was pulled out of the hat, you’re just going to kill motivation. You know, I’ve seen a lot of companies when they’re setting their strategic goals for the coming year or two years having, lets use the term stretch goals, what their referring to is their goal is really a stretch goal its really beyond what their capacity is to actually achieve. But they’re not putting it there as a stretch goal, they’re putting it there as the actual goal. And you almost demoralize your people immediately because they’re thinking, how the heck do we achieve that? So when you’re talking about strategic planning it’s useful thinking in terms of what your ideal goal is, and then if you can exceed those expectations, what’s a stretch goal? Something that will stretch you but is not impossible.

Sweet: OK, annual goals was something I was going to ask about, so I’m glad you brought that up, Denis. Are there any common mistakes that you have made in your own business when crafting a plan or you’ve seen other companies make? For example, putting a stretch goal out there as your only goal.

Case: A couple we’ve made -- the stretch goal is one. Another one is some people try to use the plan to motivate the team to try to get to (the stretch goal). I’ve found short-term that that may or may not work, depending on the people, but long-term at least I’ve found that that’s not the way I believe in.

That’s one thing; the second is doing the plan and setting it on the shelf, versus living and breathing it. A third one that has been apropos for us lately is how often we revise it. Some people never revise it and put it on the shelf, which is a mistake. But at the other extreme, if it’s revised quarterly or too often, I think you lose the foundation of the plan. It needs to be adjusted to reflect reality, so … we look at it every month and look at how we are doing versus actuals. But every six months we sit down and say, OK, do we need to revise the plan for what’s reality? We used to do it every quarter, sometimes every month. And then you lose all bearings, in my opinion.

Iantosca: I think one error that could be made is too much of drinking your own Kool-Aid and setting up this whole plan around who you think you are and who you think you want to be without gathering some data about how the market sees you and if you can go down that road.

We had a third-party person call our clients and say, what do you think of F.H. Perry Builder? What do you know about them? Who are they?

She also called people who did not hire us – prospects and projects that we had lost -- and asked, why didn’t you hire F.H. Perry Builder and what was it about the process that you didn’t like or didn’t work for you? And so if the answers to those questions didn’t align with this great self-image that we had, there was some work for us to do on either figuring out how we were going to realign our message to the market such that they could know who we are, or say, great, we’re on the right track and we’re just going to blow that out of the water and make sure that our brand really does represent that because that’s what people are seeing and wanting.

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Blogs by Allison Iantosca, Bruce Case, Douglas Shipman and Denis Leonard