Competitive advantage is moving to construction firms that continuously innovate. Technology is causing this shift, and it’s happening in every industry. But that doesn’t mean that all the old ideas about competitive advantage no longer apply. Instead, construction companies need to hold on to what still works, while testing and adopting new competitive advantage strategies. As you review your business plans for another year, consider these aspects of staying competitive.
It’s a Journey, Not a Destination
Today’s competitive advantage is not sustainable. New technologies, deregulation, re-regulation, globalization, imitation, and a rapidly changing construction marketplace all conspire to make your competitive advantage obsolete. For example, many coastal communities change their building codes in the wake of severe coastal weather. If your competitive advantage is your expertise at delivering the ‘old’ code, then your competitive advantage just slipped away. In fact, Rita Gunther McGrath, associate professor at Columbia Business School said the new focus should be on transient competitive advantages. When using this model you view your business in cycles as you gracefully exit one declining competitive advantage while building the next one.
If you take some time to read what other construction companies claim as their competitive advantages you’ll think everybody hired the same writers. They all say their work is top quality, that their prices are competitive, and they’re trustworthy. Integrity comes up a lot too, as does professionalism. But, this is stating the obvious. Those descriptors aren’t competitive advantages; they’re simply must-haves if you want to succeed at contracting. So, stand out by stating what really makes your approach to building so much better than everyone else’s. Or, tell them why your way of doing residential lowers risk and increases certainty. Then, walk the walk, so that what you say, is really what you do.
It’s Very Much About Who You Know
Construction is a relationship business. That’s because construction projects are high dollar, one-off, and long-term. If you’ve been building long enough, you know it’s the project participants that determine project success. Throw together a loose band of inexperienced builders and you end up with chaos. But, bring together a group of experienced builders who’ve been successfully building together for a few years, and construction magic happens. If they are mature in their building and business abilities, the other builders you work with become a competitive advantage. The same is true for your suppliers and equipment providers. When you take to the field with professionals, you are part of a team that can deliver the right people with the right skills, the specialized equipment that support the schedule, and the materials that stand the test of time.
Get Multiple Advantages Working for You
You can have several competitive advantages. In fact, when you have more than one, you future-proof your business. Perhaps you are strong in one construction niche like timber framing. Or, perhaps you are quick to harness technology to improve outcomes. For example, when you adopt jobsite video technology for security, safety, or quality control, you add a new competitive advantage. As you extend the technology’s use to project management functions, you add another competitive advantage. Taken together, these moves showcase a business that’s constantly innovating. And, that’s yet another competitive advantage.
Finally, make your competitive advantages obvious. That means attending to all the necessary requirements of running a legitimate construction business. Your competitive advantages must stand on a foundation of professionalism. So make sure all your customer-facing materials like brochures, websites, and business cards emulate your commitment to the profession. Run clean, orderly jobs and project a clean, professional image. All the competitive advantages in the world won’t make up for a poorly run construction business.