Colorado Real Estate Journal - November 4, 2020
The fourth quarter typically is when companies reflect on the past year and look ahead to establish projections, forecasts and goals for the upcoming year. In 2020, this process will challenge business leaders to effectively prepare for the future after such a tumultuous year. The impacts of the COVID- 19 pandemic hit members of the real estate, design and construction community, each in their own unique way. Brokers, project managers and architects were some of the first to be impacted as deals and projects in the early phases went on hold or were canceled altogether. Meanwhile, the construction industry experienced lagging impacts, initially keeping some momentum in the spring and summer due to its classification as an essential service and a backlog of projects. As the year has progressed, active projects have decreased, creating a competitive environment for service providers. And yet, not all companies have experienced a slowdown. For example, those focused on infrastructure work saw their projects fast-tracked to take advantage of decreased road traffic during the stay-athome order. One constant most companies are grappling with this year: The realities of 2020 are vastly different than those we anticipated in annual plans for the year. From the pandemic and its severe e c o n o m i c impacts, to rising social unrest, a presidential election and various other hurdles 2020 presented, it is no surprise that leaders may lack confidence in their ability to anticipate what is to come in 2021. While no one can predict the future, strategic planning can help leaders manage risk, create more certainty and provide opportunities to be more proactive – a certain need in today’s environment. Value comes from planning, not the plan. Planning may seem like an ineffective and cumbersome activity, especially if the plan is static and sits on a shelf untouched for 11 months of the year. When done holistically and with intention, strategic planning creates a roadmap with clarity and direction to aid decision-making and adapt quickly when we encounter new challenges. 2020 aside, the commercial real estate industry always has been i n f l u e n c e d by a variety of uncontrollable factors – from tariffs and labor costs all the way down to weather. Even in the best of years, we cannot plan for every eventuality, which is why it’s important to plot multiple courses to the same destination to help avoid setbacks from unforeseen impacts. Steps to strengthen your planning muscles. To start, leaders must define key levers of their businesses. What is central to the business? What can stay on the periphery? With a clear view of these boundaries, organizational core competencies and their application in a variety of scenarios, leaders have greater latitude to respond to the unexpected. With that framework, leaders need to set a clear direction. This requires time to reflect, analyze and question what worked and what did not. It’s human nature to focus on areas to improve, but you cannot overlook your successes. It is equally important to understand the actions that led to those successes in order to increase the potential of repeating those efforts to build on past successes. Next, conduct visioning sessions, scenario brainstorms and consider hypotheticals to help analyze current and potential needs. What if a company’s most important asset goes away or becomes irrelevant? Nothing is a static core competency, so this exercise of strategic planning helps inform how companies can pivot during times of change and strengthen their corporate roots to build a resilient organization. Taking time to explore different outcomes and practice pivoting prepares leaders to act quickly when there is no other option but to change course. Finally, involve everyone. This is an often-overlooked step in strategic planning, however it is not solely an activity for senior leadership. The entire team’s hard work and talents dictate an organization’s success, so it is important to factor the entire team’s ideas, perspectives and needs into the strategic plan. Reframing how we think of strategic planning. Based on 2020, companies might be tempted to go without a strategic plan in 2021. However, this critical investment of time and resources can have tangible return on investment into the future if done effectively. Instead of creating “the plan” in a one-time exercise, consider strategic planning as a mindset to actively engage all the time in order to react to unforeseen events with ease. Companies that regularly exercise this planning muscle will be most successful. We’ve seen this play out for a number of companies across the industry. By leveraging existing skill sets and readjusting their approaches in response to market shifts created by the pandemic, companies found new avenues to create revenue and activity: Architects pivoted to provide COVID-19 signage and workplace planning; real estate brokers incorporated new technologies to support virtual touring; furniture dealers tapped into the home office market. Never before has there been a more opportune time to embrace innovation, reflect on your business and plan for the future. By prioritizing planning, industry leaders can move away from the reactionary decision-making that 2020 forced. Strategic planning is the key to minimizing disruptions and navigating the unexpected to come in 2021.