Strategy Execution Life Cycle – Identifying and Defining, Analysing and Syndicating, and Formulating and Documenting.
Background context – The process of building a residential house consists of over 150, largely sequential, steps performed by more than 20 different building trades. The house is a stage with many trades needing to come on and off stage at just the right time to allow the performance to roll on seamlessly. This happens rarely with the average time to build a single story residential house taking more than twice as long as the theoretical time for each process step. Each process step is subject to variability which leads to the build plan being in a constant state of flux. As builders increase in scale, this process variability and planning flux can quickly lead to a chaotic build management process. The outcome of these inefficiencies for the consumer is longer construction times and higher cost to build. Given the highly fragmented industry structure (a ‘cottage’ industry) of the trade services there is limited capacity within the supply network to improve efficiency in the build process.
Strategic Challenge – Guberno worked with a large construction materials manufacturer that owned a contracting services company that coordinated installation trade services of its manufactured products for residential home builders. The business was providing project management services that involved engaging, coordinating, and project managing installation service providers for its products to improve responsiveness and reduce variability in the installation process step for the benefit of the residential builder. The contracting business was a channel to market for only a small share of the manufacturer’s product with the opportunity for material growth. The project objective was to refine the contracting strategy and to articulate both an improvement and growth pathway for the business.
Strategic Activities – Guberno provided strategic support to the construction materials company across a range of workstreams. Key activity workstreams included;
- Diagnostic assessment – Guberno performed a diagnostic assessment of the contracting business to understand its current state, its strategic positioning in the competitive market, and its current level of operating performance.
- Strategy development – At the heart of developing the strategy for the business was refinement and testing of the business value proposition with customers, suppliers and with the contracting company’s owners. Also key to development of the strategy was identifying the business capability platform of four critical success factors required to be successful in the market.
- Improvement and growth planning – Guberno worked with the business operating team to frame the key elements of an improvement and growth plan.
Outcomes – The project delivered a clear business strategy, identified critical success factors for the business, and articulated a structured improvement and growth plan. The strategy was approved by the Executive and is currently progressing through implementation phase.
Key Learnings – A key learning from the strategic review was that the contracting business provided the construction materials manufacturer with an important differentiator in its channel-to-market and customer relationships relative to its manufacturing competitors. This service differentiation enhanced the market position of an otherwise commodity like construction material and in doing so enabled the manufacturer to overtrade its manufacturing share in the market. This outcome was achieved within a profile of acceptable contracting risk. By bringing a scalable project management platform to a fragmented supply industry for trades, the company had the opportunity to become the UBER equivalent of the residential construction sector with immense opportunity to grow both horizontally (greater share of the existing product installation) and vertically (with a broader array of residential trades) with increasing economic returns from scale.