Self-Taught MBA: Stay in Sync: How to Avoid Strategic Misalignemnts
Military generals are often accused of “fighting the last war.” And there’s a little more truth to this than you would think. Examples abound, such as during the disastrous frontal assaults of the European powers during World War I, where tens of thousands of soldiers died in face-to-face confrontations that only made sense back when armies fought using muskets instead of rifles. We’ve made past war mistakes many times since, but this is not a condition that affects only military strategists. If affects builders, too.
Builders Can Embrace Change
Builders work in a tradition-bound industry where old habits stick around for generations. Take stud spacing in 16-in. on center framing, which was designed to provide the backing needed for wood lath and plaster finishes. Some builders swear by it still, as if this spacing had a structural or perhaps even sacred roll to play. If you still finish your homes with wood lath and plaster, then by all means. If you use drywall, then frame with 24-in. centers, or you are like those generals “fighting the last war,” as the saying goes, using outdated tactics.
Unfortunately tradition-bound thinking is not limited to building practice. Building business practice can suffer a similar malady. For example, you’re fighting the last war when you buy an advertisement in the yellow pages or newspaper rather than set up a Facebook page, place an ad on Craig’s List, or promote yourself through a Twitter account. One reason that overtly green builders have done much better than traditional builders in recent years is not that people demand ecology, it’s that green builders tend to embrace the new in all aspects–including their methods of promotion.
You can find yourself in a strategic misalignment simply because the world around you changes and you don’t. To keep up with changes, companies often try patches, without getting involved the bosses try to plug in new and trendy add-ons, such as the Facebook pages and Twitter accounts I just recommended, but they assign others to do it, such as the office secretary or bookkeeper, and they neglect learning and understanding the new mediums to reevaluate their core strategic relationships and competencies as they relate to the new social trends and technology.
This is common in our industry–and my personal life–because we builders tend to become task oriented, rather than big-picture strategic thinkers.
Getting Back to the New Basics
In a recent post, I interviewed Steve Mouzon, who described an integrated business strategy–harnessing elements of contemporary social media and social science, such as internet outreach and community building–to the very traditional objective of growing his customer list. The underlying difference between Mouzon’s approach and the more traditional one came with the packaging of promotional material and the number of people required to make one sale.
When I used to bid remodeling jobs, I realized it took 10 to 15 presentations to make one sale. This meant I had to generate 10 to 15 good leads for every sale I needed to remain in business and turn a profit. This sort of calculation remains valid, but in the internet age, the new equation may be something like, I need about 10 new Twitter followers to generate one visit to my website. I need 10 visits to my website to generate one lead. This means that, to get 10 valid leads, requires I generate 100 new visits to my website by engaging 1000 new Twitter followers in my area. Same game, different numbers. A new strategy using new means to exploit a core competency–my ability to sell a job when face-to-face with a client.
Of course, the job I sell today and the client concerns I must respond to have also changed. To remain abreast of the changes requires further strategic changes in my approach to business. For one, rather than rely on decades of experience, I must pursue new business by engaging in vigorous continuing education. You would not buy a phone with “three decades of proven technology.” Why do you think clients would want a builder who builds the same house he was building 30 years ago, 20 or even 10?
Here’s were Mouzon’s ideas begin to make sense. If you recall, instead of taking notes with pencil and pen while at building and design conferences, Mouzon Tweets his notes so his client base will see what he’s up to, new followers will take interest and synergy develops between the need to keep up with evolving techniques and technology, engaging potential clients in conversation (albeit a virtual one) and expanding the list of potential customers. He is showing folks he’s up on the latest trends and technology by advertising through new mediums his “beginner’s mind,” curious and learning, rather than his “old man mind,” stuck in old ways. And this is more appealing to most clients. Steve, by the way is about my age, us old dogs can and do learn new tricks.
But what if you’re not up on social media, and have no inclination to become a proficient smartphone zombie?
Leveraging Internet Superstars
One way builders have managed to stay up with the new while not losing sight of their core competencies involves setting up strategic partnerships. The home-improvement business is worth about $800 billion annually, by some accounts, and internet giants like Amazon and Google have seen the success of Angie’s List. They want in on a large slice of that home-market pie. They know how to advertise online and they have a loyal clientele (Disclosure: I buy many of my goods at Amazon, and now even watch my favorite TV shows through their channel). To bring the efficiency and outreach available on the web to home improvement, many builders–and especially handymen–have found plenty of work offering their services through Google’s and especially Amazon’s “installed sales” services. There’s plenty of room for you, too, at least right now.
And that will be the subject of our next blog, how some builders have become the hands and hammers of internet sales services, such as Google Express, Amazon Prime, Porch, and pro.com.
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