For most builders, strategic planning entails sitting on the deck, frosty mug in hand, and daydreaming about what their company could be if they just had enough breathing room to put together a plan. In fact, the only real breathing room for builders often is that brief respite on the back deck.
It is essential to devote time to strategic planning. Just imagining you'll expand into a new market doesn't get you there; it's the business equivalent of closing your eyes, tapping your heels three times and saying, "There's no place like home."
So why don't more builders have clearly defined strategic planning processes? Why do so many believe planning is merely associated with a single development, new service or market?
I think it has to do with the cyclical nature of home building. Home builders feel there are so many forces beyond their control affecting their businesses that planning is almost impossible — better to be prepared to react to the buffeting winds than to plot a course.
Now that I've established that straw man argument, let me knock it down. First, the cyclical nature of home building is nothing compared to what it was in the 70s and 80s. Then, a five-year span could include the peak of production and the nadir. Now, we suffer mini-peaks and valleys. Second, strategic planning does far more than plot a course for your company. In truth, I believe its value is greater for the cohesive effect it has on your employees than for the strong direction it gives your business.
Consider this. When you go through a strategic planning process, you engage your entire staff in the future success of the business. The result is employees either buy the plan or reject it. I can't tell you how exciting it is to see a freshly energized staff member who sees a clear future for both the business and his or her own. When employees know where the company is going they can identify a vital role for themselves in that success.
Equally important is the ability to identify employees who are not on the bus. You know the person; he sits in the meetings, tight-lipped and barely participating. Often he is a long-tenured employee who others view as vital to the operation. But after a couple of strategic planning sessions, you know this person doesn't believe in the vision.
This person, who may be a cancer in your company, often opts out because he recognizes there is no future within your walls. At the very least, strategic planning allows you to tie employee performance to company goals, making it easier to transition (what a lovely phrase) the employee.
The communication of a common vision to all employees is the most valuable tool you have. Strategic planning is the method for both establishing the vision and communicating it. At the very least, it's more effective than drinking and daydreaming on the back deck.