Revealed: The importance of strategic planning in construction companies and projects

Written by LetsBuild

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Strategic planning is a crucial aspect of higher management in any company across all industries. Strategic planning includes designing a company’s response and behavior in a competitive market, creating a market strategy, and adapting company resources to support the strategy.

The continuous process of strategic planning defines a company’s future. A strategic plan is developed to record the company goals and outline the steps needed to take and the milestones needed to achieve to reach those goals. In this article, we hope to impart great appreciation in having a strategic plan to keep your company right on track with all the needed tasks and activities, identify areas for improvement, make course corrections, avoid execution pitfalls, and lead all activities to get you in the right direction. Allow us to contribute our knowledge and help you develop your own strategic plan for your construction company.

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What should be the goals of a construction company?

Most often than not, great strategic planning starts by defining a company’s mission statement. A great mission statement is one that is imbibed as a living asset by the company and its members. As you define your company statement, you will start to have an idea about your company goals and ambitions. As you start drafting and outlining your strategic plan, some adjustments will have to be made with your mission statement. However, you have to make sure that your strategic plan does not stray from your company goals.

Your company goals are usually the fuel to your strategic plan. There are many different types of goals to set: they can be (1) organisational, (2) financial, (3) human resource, (4) leadership, (5) marketing, and (6) sales. For a construction company, here are the few competitive goals:

  • Deliver high-quality projects
  • Keep construction projects on time and within the budget
  • Be data-driven
  • Connect the worksite to the office in an effective manner
  • Standardise construction systems and processes
  • Invest in staff and team training
  • Customer satisfaction

Your goals define your strategic plan, your mission statement and everything else you do within your project. The more specific you are with your goals, the better. Don’t stop with “we will improve productivity”. Be more exact. “We will improve worksite productivity by 50% by improving communication through the implementation of construction collaboration software.”

What is strategic planning in construction?

Strategic planning in construction usually involves a six-step framework. This is not a one-size-fits-all model but a recommended process that has reaped equal benefits for a lot of construction companies.

1. Studying the company mission: The company mission expresses the project owner’s perspective when it comes to the scope of company activities and goals. By defining your company mission, you establish an internal baseline. Maybe start asking yourself these questions:

  • What are your company and project objectives?
  • What is your company good at? List all your core competencies.
  • What is your commercial objective?

2. Examining the business environment of the company: Economic factors that affect the business activities and related factors particular to the construction industry. The business environment survey reveals specific project opportunities and calls attention to risks and possible threats to a company’s activities. By studying the business or market environment and trend, you establish a healthy external baseline.

  • What are the external factors that impact your construction business?
  • What are the identifiable market dynamics?
  • What are your customer demographics, behaviours, needs, etc. that could help you with your decision making?
  • What competitive variables can you analyse?

3. Analysing company resources: The main resources in construction include the construction capacity, the procurement system, the marketing system, the organisation, personnel, finances and knowledge. Following the identification of these main resources, their strengths and weaknesses are also defined.

  • What makes you better than the competition in terms of your resources?
  • How can you innovate?

Read more: What is lean construction?

4. Developing strategies: By mapping the variegated possible activity areas, a strategy is developed and may follow one out of several general strategy types that must be adjusted accordingly to particular market and company conditions, and company resources. In choosing the most optimal strategy, the careful analysis of costs and benefits must be mainly considered in the strategy implementation.

  • What market and company conditions should be considered?
  • In what logical order should activities be done?
  • Who is going to do what?

Find also: How to ensure that your 3-6 week planning will be delivered on time

5. Aligning and executing strategies: Your strategic plan will balance all your company’s short and long-term operations and goals to meet your overarching mission. The key is to communicate your strategic plans internally at every level and every possible opportunity. External communication with subcontractors must be aligned as well. Your stakeholders and teams should understand the roles they have to play and the decisions they have to make in executing the plan.

  • What steps are needed to take to support further actions?
  • Do you have the correct staff to support the actions needed to accomplish a milestone?
  • What are the activities needed to accomplish before reaching a goal?

6. Review, measure, modify: Your strategic plan will result in strategic processes and systems that will need to be evaluated and measured. Those that work must be learned from and standardised, while those that don’t must be adjusted.

The importance of strategic planning in construction

Strategic planning is essential to determine the direction for your construction company. Having a well thought out strategic plan focuses your efforts and ensures that all your stakeholders and project team members are working towards a common goal.

  • Strategic planning assures that all your actions are logical and planned to contribute to the efficient delivery of the project and your overall standard construction process.
  • Strategic planning aligns all resources for optimal results.
  • Strategic planning prioritised financial needs.
  • Strategic planning builds your construction firm a competitive advantage.
  • Strategic planning engages with your stakeholders and project teams and communicates effectively what needs to be done.

Another significant aspect of strategic planning is to help you manage and reduce risks. Construction strategic planning helps you:

  • Analyse potential construction and business risks.
  • Implement risk control measures on a business level and in the worksite.
  • Eliminate uncertainties.
  • Consider how to mitigate the impact of risks, if ever they should occur.

What are the objectives of construction planning?

The objectives of construction planning revolve around the basic management and balancing of three aspects: scope, time and cost. Construction planning, ideally, is a continuous process, which should be revised and modified as the execution of a construction project progresses in real time. Good construction planning should be within the boundaries of the defined scope, cost and schedule without compromising the quality of your construction project.

Following the representation of the Project Management Triangle, the peripheral objectives contributing to the balance of these three aspects include these typical project planning objectives:

  1. Your construction plan should involve the planning of each activity in the entire construction project process.
  2. Your construction plan should define and detail all construction methods involved.
  3. Your construction plan should have an outline of all construction machinery and equipment needed to execute the project.
  4. Your construction plan should include your procurement details of all the needed materials.
  5. Your construction plan should also detail human resources and employee skills.
  6. Your construction plan should also include all required documentation and drawings.
  7. Your construction plan should also have financial planning integrated alongside all construction activities.


Now that you have a clear idea of what strategic planning is and why it is important in improving your construction outcomes and growing your construction business, it is time to sit down and start writing your own. It is not an easy task but it is going to be a roadmap towards huge success. If you found this article informative, you will enjoy learning how we can help you be more efficient and effective in project execution, which will ultimately bring you more projects in your portfolio.