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The subtle art of strategic assumptions
Every plan is built on assumptions. The best builders know which ones matter.
This is part 2 of a 3-part series on building a stronger annual strategic plan for your construction business.
If you missed the first one (on the four hallmarks of bad strategy) you can read it here.
Welcome back!
As promised, we’ll dig into the details of exactly how to build a good strategic plan in the next issue.
But first, we need to talk about an unavoidable reality of the planning process:
No matter what you do, you will always have to make decisions with limited information.
Because to run a successful construction business, you have to make a lot of assumptions, all the time.
You can never 100% guarantee:
When clients will sign their construction agreements
Whether your subcontractors are going to perform properly
If the scope of a project will stay the same after it’s underway
And the list goes on.
This is part of why construction is such a challenging industry — you’re always making decisions based on factors you can control, vs. ones you can’t.
What separates top construction companies from the average ones is this:
They don’t try to eliminate assumptions from their business entirely. (That would be impossible anyway.)
Instead, they factor all of their assumptions into their decision-making process.
They’re constantly asking themselves: “what assumptions am I making that must be true in order for us to reach our objectives?”
For example:
“This job over at ABC street is going to sign their construction agreement by X time, and we’re going to get all of the building done in 16 months.”
“The project manager that I just hired made a great first impression, and I believe that they’re going to continue to perform well.”
“This new flooring system that we’re installing in this house (which we’ve never tested) is going to be installed correctly, and there won’t be any mistakes that push our job back.”
Sometimes, you have to just hope for the best.
But any assumptions that might make or break your long-term plans need to be identified and accounted for ahead of time.
This will give you the best possible chance of hitting your strategic projections!
What’s next?
Now that we’ve laid the groundwork, we’ll show you how to build a strategic plan that works in the real world.
That’ll be the topic of the next issue.
Until then, if you want more hands-on guidance on how to master construction business management, so you can:
Fix the operational bottlenecks that are keeping your business stuck
Turn your construction company into a self-managing, profit-generating machine
Build generational wealth by becoming a vertically-integrated real estate development and investment company
Consider joining us inside Highspire Coaching.
Forward always,
Highspire