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Construction Business Development Meeting New Challenges, Seeking Opportunity

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hat are the business development skills required in the construction industry of the early twenty-first century? This book examines the opportunities and distinct challenges of doing business in this highly competitive and market-driven environment. 

Construction has changed. It requires new and innovative approaches from its business leaders and managers. Each chapter represents the insights of construction business development practitioners, consultants and researchers. The text uses illustrations and cases to describe the approaches and strategies required.

Each chapter provides some practical approaches to the development and implementation of business development in construction organizations. 

Chapter 2 looks at strategic business issues. The construction industry has not escaped the new more dynamic and faster changing environment. The business models of the past are being replaced by faster, flexible and more dynamic versions. The buyers of construction services, both public and private, have changed their attitudes to the performance of construction.

 They want fast, efficient, high-quality and reliable construction with better value for money. Construction is expected to be more collaborative and responsive with a longterm customer service driven approach On the other hand, investors in construction organizations expect better returns on their investments.

 There are many alternative options for investors and construction is expected to provide similar returns to other investments. It is not longer an option to operate in the boom and bust cycles of the past. Such pressures mean that construction organizations need to look at their underlying short-term profitability and as well as their long-term strategic positions and business models.

Chapter 3 stresses the importance of a planned and strategic approach to marketing. This entails understanding the organization’s wider goals and how they are going to be achieved; setting marketing objectives in relation to those corporate goals and corresponding marketing strategies to deliver on those stated marketing objectives. It is argued that it is only by adopting such a logical and reasoned approach can marketing rationalize its right to be at the heart of the management decision-making process, a cross-functional discipline that ‘…is too important to leave to the marketing department’.By being both logical and strategic in nature, it will help to dispel its current image held by many in the construction industry of it being about advertising, public relations (PR) and general promotional activities. 

Chapter 4 presents a marketing/business development case study of a small/medium-sized enterprise in construction. The writer conducted research into how the firm could improve its approach to enable it to move away from a heavy reliance on public sector housing and to break into new markets, raise turnover and profit margins, and overcome an image problem. The research adopted a ‘classical’ marketing methodology employing an internal and external audit of the firms, market research, SWOT analysis and establishment of marketing objectives. Finally, the preparation of a marketing strategy and plan. The chapter also looks at issues concerning implementation.

 Chapter 5 identifies the application of marketing and business development to engineering consultancies. Consultant practices have had to become more market oriented due to the lifting of codes of practice to allow competition, the increasing involvement of overseas based consultants and the increasing use of non-traditional forms of procurement. Previously, when there was enough work for each company to share, long-term, steady and stable relationships between client and contractor were developed. Companies then focused on product and technological excellence, but now that is not enough. The attitude and understanding towards marketing appears to be changing.

 Chapter 6 looks at Customer Relationship Management (CRM). The key to successful CRM implementation depends on two things. Firstly, recognizing that apparently similar customers may behave in different ways according to their culture – so, segmenting them is necessary, but not easy. It requires data on soft, behavioural issues as well as the regular classifications of size, sector, SIC code, etc. Secondly, with such a high failure rate and high cost, you need to go into this with a well thought through plan and a high level of preparation, before even thinking about potential consultants and vendors of CRM systems. 

The headlong rush into new CRM systems was driven initially as a by-product of IT departments facing up to Y2K compliance problems. But with the ensuing lack of success, it is clear that marketers need to be driving the process, to ensure that customers are put at the focal point. There will be many vested interests from field sales, call centres, IT and finance departments, each with its own way of working and own systems. This means that you have to take a holistic approach – it is not a bolt-on situation or a quick fix.

 Chapter 7 asserts that companies in construction have been slow to develop customer- or client-care programmes, which may provide a number of important benefits. It may help to differentiate them from the competition in highly competitive markets, improve perceptions of their clients and their professional advisors, increase client satisfaction with the services provided, encourage loyalty, and create a reputation for being a caring and clientorientated organization. Internally, the construction company may benefit from improved staff morale, increased employee participation and foster internal customer/supplier relationships. By introducing a client-care programme, a construction organization may bring about continuous improvements to the operations of the organization .

Chapter 8 looks at bidding strategy. Understanding where bidding fits into the bidder’s business and growth strategy is important in preparing to bid for work. Bidding is an investment in a specific opportunity, and brings a need to bring diverse skills and aptitudes together. In responding to the invitation, the bidder needs to recognize the complex nature of the procurement, and how this has changed over the recent years, and be prepared to devote focused effort and resource to their response.

 Managing the process becomes critical as increasing pressure is put on both clients and bidders in order to deal with increasingly complex procurements. The need to understand the client and his objectives are key issues in bidding for and winning work. There is some conflict and tension in that bidders would wish to avoid bidding, yet clients seek benefits from competition. Chapter 9 examines the range of key PR activities that are now an integral part of the construction industry’s business development. 

It will cover the conventional PR functions in passing, briefly referring to press relations, internal communications, corporate affairs, customer liaison, supply chain liaison, communicating health and safety. However, it is not intended to review the whole plethora of the public relations remit or to even list what should or should not be part of the function in the construction industry. What is important is to examine the most influential roles of the PR practitioner in support of the business development function in the construction industry today and how recent developments have radically altered priorities in this interface. Thus, we will look in some detail at the impact of PFI/PPP upon the function as well as examining community relations and its vital role in the business development context.

 Chapter 10 looks at the management of change. The advent of specific change programmes such as TQM, BPR and Culture change with their own specific programmes and philosophies marked a significant departure in the treatment of change. It gave managers specific products to address specific operational issues and moved the focus from the macro(strategic) to the micro(operational) level. The risk inherent in this development was the separation of action from strategy. Schaffer and Thomson (1992) term the preoccupation of actions without clear goals, particularly in the area of performance improvement, as a modern form of the ‘rain dance’.

 They argue that there is a fundamental flaw that confuses ends with means and processes with outcomes. To counter this preoccupation with mindless actions they advocate that ‘successful change programmes begin with results’. With results driven improvements a company only introduces innovations in management methods and business processes that help achieve specific goals. 

The review of change in its many forms highlights that there are no universal change models or formulas. Consequently, a key consideration is not about endorsing a particular methodology than at helping people ‘do’ change effectively while in the middle of the change process. 

They postulate that the more they have studied change ‘the more humble we have become about dictating the “best” way to do it.’ Chapter 11 considers the impact of the Internet and e-business on construction. E-business applications designed to increase competitiveness are numerous and continually evolving, but they do not come with an ‘increase competitiveness’ label on them.

 Instead, the Internet has taken every discipline within an organization – be it client handling, design, planning, estimating, buying, recruitment, project management, cost control, construction, maintenance or support services – into a period of turbulent change which is set to last for a decade or more

Once the people in a particular discipline have accepted the possibility of a new e-business way of working, and are prepared to listen to possible solutions, they will have entered a period of constant evaluation and implementation. This radically changes the role of the construction business development manager too.

Chapter 12 looks at the importance of knowledge. As information becomes more important, the role of knowledge takes on a more important role. Convergence in broad strategic goals and production capability means that new ways of gaining strategic advantage must be found. Knowledge and its management has become the new arena for competitive advantage and differentiation. Businesses of all types can no longer escape the importance of knowledge in their development. 

Commentators commonly refer to a new era of business activity based in a knowledge economy. It is clear that knowledge has a role to play in business development. Chapter 13 looks at the challenges and opportunities in collaborative working. It briefly reviews the background to the concept of ‘collaborative working’ and its gradual adoption by some within the industry. Progress has been hampered by both cultural and technological barriers. If organizations are to adopt more collaborative approaches (some, of course, may not wish to, but they risk a desperate race to catch up if collaboration becomes the norm rather than the exception), they will need to change their internal culture and develop new ways of working with other organizations. 

This will prompt changes to business development activities to reflect the growing importance of long-term relationships, both up and down the supply chain (could ‘alliance competence’ become a new area of market differentiation?).

 As collaborative working is built on a combination of people, processes and technology, the lack of an infrastructure to support new approaches has also hampered progress, though the advent of new collaboration technology could hasten the necessary supply chain integration – and provide further potential for businesses to develop competitive advantages. 

Chapter 14 asserts that construction business development is all about market and customer knowledge, strategy and tactics, relationships, teamwork, marketing, proposal preparation, commercial acumen, contract terms and conditions, risk assessment and analysis, technical know-how, time management, project experience, networking, listening …and more. It is a demanding, but ultimately rewarding role. 

This chapter explores the role and responsibilities of the business development manager. More accurately, it paints a picture of the possibility for the role and highlights the opportunities for the business development manager to excel. The business development manager has the opportunity to be a strategist, an account executive, a champion of change, a winner, a leader – and, ultimately, a hero.