If you don't create a vision of success, you will have a comparitive rather than competitive advantage over your competitors, which means you'll end up looking just like everyone else.
by William M. Dillard
When the economy changed a few years ago, we at Mechanical Services of Central Florida saw how we could no longer thrive just being “order-takers,” and that great changes in our strategy and company culture were needed for our continued success.
What we wanted to become was a sales-focused organization, which could generate more Design/Build relationships. Like all businesses we have limited resources, so in order to change we needed a great plan to get us there.
Therefore, we put together a team of nearly 15 business leaders and decision makers from within the company and spent more than 40 hours hours meeting together as a team devising a strategic plan. The journey was well worth it.
Creating the Strategic Plan
Instead of performing a traditional SWOT (strength, weaknesess, opportunity, and threat) analysis, the team’s first goal was to take a step back and establish our visions for the company. This involved identifying our strategic choices in four major areas:
- First, defining our core capabilities. Whta are we good at today?
- Second, performing a competitive analysis of competition. What sets us apart from our competitors?
- Third, performing a market forecast. What will our market look like five years from now, and what will our strategic choices be based on our market forecast?
- Fourth, devising our personal definition of success. What is ownership’s vision of success, and what are our strategic choices based on this vision?
Creating a vision for success is all about selecting strategic choices that build competitive advantage over your competition versus comparative advantage.
We then turned to our customer base for further study. Because 20% of a company’s customers normally provide 80% of its profit, it’s crucial to understand the characteristics of those key customers.
Looking at both our project and service customers, we saw that our customers with the most Design/Build promise all had mission-critical requirements and came from sectors such as health care and data processing.
After establishing our company visions and zeroing in on our most promising customers, we have a clear picture of our company today and what resources we will need to attain our vision. We can also focus on our mission knowing which customers to target, what sevices to provide, and how we are going to differentiate ourselves from our competitors.
Strategic Account Management
When developing our strategic plan, we set about creating results¯oriented objectives that were both measurable and trackable.
Part of that implementation involved further solidifying existing customer relationships through strategic account management. To do so, we chose six project customers and six service customers that we felt represented tremendous opportunities for growth and Design/Build relationships. They were also accounts that, if lost, would have a seriously negative effect on our company.
For those reasons, we developed detailed plans for these accounts. Each plan includes a customer profile of the decision makers, how best to communicate with them, and how to keep this information current.
We also have a strategy to uncover hidden project opportunities by matching up our company’s strengths with their needs.
From here, we put together a year- long contact management plan that details how and when the members of each account managment team will interact with the decision makers, as well as what they will discuss.
As a result, we stay firmly connected to our most crucial customers and we don’t overlook prospective opportunities.
A Successful Sales Process
When a new Design/Build opportunity presents itself, it’s important not to just jump at it. Instead, ensuring a successful sales process involves asking the client, and ourselves, many questions in order for the prospect to qualify as a solid opportunity. For example:
- Is this a good opportunity for our company?
- Is it a winnable opportunity for us?
- How does it compare to the rest of our opportunities?
- Why have we been asked to submit? Is it because there’s a procurement process requiring several bids? Is price the only qualification?
- Is the project part of this or next year’s budget? Do they have the ability to pay?
- Who holds the power in the decision making process?
- Will this business happen for anyone?
- Is the pain worth the gain? In other words, can we solve their problems profitably and better than our competition? Can we provide value?
- How could the competition defeat us? What are their strengths?
- What’s the time frame and approval process?
- What could go wrong? What could fail?
Once you’ve answered these questions, you’ll know whether to accept or pass on the project. It’s important not to take on work that’s not a good fit, because it can be a waste of time and money.
In fact, we’ve spent a significant amount of time and efforts in the
pre-construction process only to find out that the project was never going to materialize. That’s why the qualification process is so important.
In addition to choosing your project opportunties carefully, it’s equally important to realize that service work doesn’t always translate into the most successful Design/Build relationships.
For example, there are clients where the relationship is strictly service focused. Although you have a great relationship, these clients may have a stringent procurement process requiring them to go out for bid on every project. Therefore, pursuing more than service may put you in a less-than-advantageous, less profitable position.
Nevertheless, whether you want to increase your Design/Build or service workload, it’s important to take the time to establish your company vision, set up a plan, and execute it. Be
prepared, and ask the right questions, and you’ll ensure a profitable present and rosy future.
William M. Dillard is president of Mechanical Services of Central Florida, a 30-year-old mechanical service firm in Orlando, FL. He is also president of Business Strategy First, a management consulting firm. He can be reached at 407/857-3510.