Strategic plans require buy-in and solid tactics to succeed

Remodelers need to update their plans regularly to be successful

March 11, 2011

Strategic planning removes hunches and guesswork that often lead to dead-end initiatives, says Serge Ogranovitch, a housing quality consultant with the Potomack Group based in Bethesda, Md. Over the past 15 years he has served as the lead judge in the annual National Housing Quality Awards, which identifies top builders, remodelers and trade contractors who are engaged in total quality management. He offers some straightforward advice on getting started.

PR: How does strategic planning fit into a quality management process?
Ogranovitch: Strategic planning is very tied into leadership and the direction that a company wants to go. Strategic planning is an activity that should be conducted on a regular basis. We recommend an annual activity where you have the key members of the management team look at what they have done during the last year and make some decision as to where they want to go. They look at what differentiates them from other competitors in the area.
The second part of that is execution: What needs to happen internally to make a strategy reality. There needs to be an assessment of the skills the organization needs in order to accomplish a strategy. Do we need a different structure to better execute that strategy? Are there people and skills that we need to bring in to make this plan efficient?

PR: Do you have your long-term and your short-term planning at the same time or are those two separate events?
Ogranovitch: Over the long term we are talking about a vision and mission of a company. A vision is a long-term activity or a long-term plan and a mission is part of it. But you also have goals. And your goals should be both short term and long term. A lot of companies update their five-year plan every year and it remains a five-year plan. It is usually easier if both of those go together because they support each other. If they are not supportive of each other, they are not going to work.

PR: When we think about small-volume diversified remodelers who would you recommend they include in this process?
Ogranovitch: I am going to go with titles that would be most common. If you have partners and they are active in the organization, they need to be involved. There should be a VP of operations, a VP of marketing and sales, a warranty manager. Finance should be there. If you have an in-house architect, they should be there.

PR: What if you are a two-person shop organized around key trades? Do you bring trades in?
Ogranovitch: If I was a remodeler and I depended on my key trades I would not bring them in for my strategic plan.  A strategic plan should be internal.  But I would have meetings with all of them and tell them about your planning process and solicit their input on the future: “How do you see us growing together?”

PR: Let’s say you have firm that is already on the quality-management journey, what types information is gathered to prepare for such a meeting?
Ogranovitch: There are two parts. First of all, I very highly recommend to any group — small or large — to bring in someone from the outside to moderate. In that situation it can become a one-way conversation instead of broad strategic planning. So a moderator is very important. Not all organizations can afford it, but if they can, they should.
The second part is that each participant should be assigned certain activities to help them prepare for the strategic planning session. One should be, looking backward, what has worked and what has not worked in the past? What are our strengths and weaknesses from their point-of-view? Each person should come to the meeting prepared to talk about strengths and weaknesses.
The second activity they should do is to evaluate the competition to see what is working as a possible idea to consider. The third activity is, “What is nobody doing that we should consider for the future?”

PR: Where would someone go to get good benchmarking information?
Ogranovitch: Anything that is available in the industry should be used. For example, you can go to the NAHB Research Center. Peer groups like the Remodeler 20 offer this as well. If you belong to one, you will have some of that information. Third would be to look outside of the industry for benchmarks. If you want to examine good customer service there are some companies that pop up right away as having really good customer service — Disney, Ritz Carlton — those are the best and you might discover ideas you can translate to the remodeling business.

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