Flevy Management Insights Case Study
Strategic Growth Plan for a Building Construction Firm in the US Market
     David Tang    |    Customer Decision Journey


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Customer Decision Journey to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR A leading construction firm saw a 20% drop in bid win rates and a 15% rise in project delivery times due to inefficiencies. By adopting a digital platform and advanced PM techniques, the firm enhanced bid success and reduced delivery times, underscoring the value of Digital Transformation and Operational Excellence.

Reading time: 11 minutes

Consider this scenario: A prominent building construction firm in the US is navigating the complexities of the customer decision journey in an increasingly digital and competitive landscape.

The organization is confronting a 20% decline in bid win rates and a 15% increase in project delivery times due to both internal inefficiencies and external market pressures. The primary strategic objective is to enhance market penetration and project execution efficiency to solidify its position as an industry leader.



The construction industry is at a critical juncture, influenced by rapid technological advancements and shifting market demands. The organization in question, while established, faces the dual challenge of evolving to meet the digital expectations of clients while optimizing internal processes to maintain competitiveness. It appears that a lack of digital integration and suboptimal operational frameworks may be at the heart of these challenges, impeding both client engagement and project efficiency.

Market Analysis

The construction sector is witnessing robust growth, driven by increasing urbanization and the need for sustainable infrastructure. However, this growth is accompanied by heightened competition and changing client expectations.

  • Internal Rivalry: High, with numerous firms competing on price, quality, and speed of delivery.
  • Supplier Power: Moderate, due to the availability of multiple suppliers but with some specialized materials or technologies having fewer sources.
  • Buyer Power: High, as clients have access to a wide range of choices and can demand better terms due to the competitive market.
  • Threat of New Entrants: Low to moderate, given the high capital requirements and regulatory barriers, but potentially increasing with digital platforms lowering entry barriers.
  • Threat of Substitutes: Moderate, with alternative building technologies and materials posing a substitution risk.

Emergent trends include the increasing adoption of green construction practices, digitalization, and prefabrication methods. These shifts present both opportunities and risks:

  • Increased demand for sustainable building solutions opens new market segments.
  • Digitalization streamlines operations but requires significant investment in technology and training.
  • Prefabrication and modular construction can reduce costs and time but may necessitate changes in supply chain and production processes.

The PESTLE analysis highlights the impacts of regulatory changes on sustainability, technological advancements, and economic fluctuations. Particularly, the industry is navigating through tighter environmental regulations, which demand innovation in green building practices but also introduce compliance costs.

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Internal Assessment

The organization boasts strong project management capabilities and a reputation for quality but is hindered by outdated technology systems and a culture resistant to change.

SWOT Analysis
The company's strengths include its established brand and extensive industry experience. Opportunities lie in leveraging technology for better project management and client engagement. However, weaknesses such as slow technology adoption and inefficient internal processes pose significant barriers. External threats include intensified competition and the rapid pace of technological change.

4 Actions Framework Analysis
To reinvigorate its strategic approach, the organization must consider eliminating redundant processes, reducing reliance on traditional construction methods, raising digital engagement with stakeholders, and creating new value propositions through innovative service offerings.

Jobs to be Done Analysis
Clients seek not just construction services but holistic solutions that encompass speed, cost-efficiency, and sustainability. Addressing these needs requires a nuanced understanding of client motivations and a shift towards outcome-based service models.

Strategic Initiatives

  • Digitization of the Customer Decision Journey: Implement a comprehensive digital platform to enhance customer engagement from initial inquiry through to project completion. This initiative aims to streamline the decision-making process, improve client satisfaction, and speed up project cycles. The expected value includes increased win rates and client loyalty. This will require investment in digital infrastructure and training for staff on new systems.
  • Operational Efficiency through Technology: Integrate advanced project management software and adopt modular construction techniques to reduce delivery times and costs. The goal is to achieve operational excellence and increase competitive advantage. The value creation lies in improved margin and market share. Significant CapEx in technology and training, as well as changes in operational processes, will be needed.
  • Sustainability as a Competitive Edge: Develop a portfolio of green building solutions tailored to emerging market demands and regulatory requirements. This initiative aims to position the organization as a leader in sustainable construction, opening new market opportunities and enhancing brand value. Investment in R&D and sustainable materials sourcing will be required.

Customer Decision Journey Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


What gets measured gets done, what gets measured and fed back gets done well, what gets rewarded gets repeated.
     – John E. Jones

  • Customer Engagement Score: Measures the effectiveness of the new digital customer platform.
  • Project Delivery Time: A reduction will indicate improved operational efficiency.
  • Green Project Portfolio Size: Tracks the growth in sustainable projects, reflecting market positioning success.

These KPIs will provide insights into the strategic initiative's impact on the organization's market position, operational efficiency, and customer engagement. They will help in adjusting strategies in real-time to meet the set objectives.

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Stakeholder Management

Successful implementation of the strategic initiatives requires the active involvement of both internal and external stakeholders, including the organization's leadership, project teams, technology partners, and regulatory bodies.

  • Leadership Team: Key decision-makers driving strategic direction.
  • Project Managers: Responsible for operationalizing new processes and technologies.
  • Technology Partners: Provide the necessary digital tools and platforms.
  • Regulatory Bodies: Ensure compliance with sustainable construction practices.
  • Clients: The end beneficiaries of improved services and efficiencies.
Stakeholder GroupsRACI
Leadership Team
Project Managers
Technology Partners
Regulatory Bodies
Clients

We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.

Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management

Customer Decision Journey Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Customer Decision Journey. These resources below were developed by management consulting firms and Customer Decision Journey subject matter experts.

Customer Decision Journey Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Strategic Plan Overview (PPT)
  • Digital Transformation Roadmap (PPT)
  • Operational Efficiency Improvement Plan (PPT)
  • Sustainable Construction Strategy Document (PPT)
  • Stakeholder Engagement Framework (PPT)

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Digitization of the Customer Decision Journey

The organization adopted the Value Proposition Canvas (VPC) to deeply understand customer needs and tailor the digital customer journey accordingly. The VPC, developed by Alexander Osterwalder, is instrumental in aligning products and services with customer desires, pains, and gains. This framework was particularly useful for this initiative as it provided a structured approach to dissecting the customer decision journey, ensuring that the digital transformation efforts were highly targeted and customer-centric. The team executed the framework by:

  • Mapping out customer profiles, including their jobs, pains, and gains, to understand what customers truly value in the construction process.
  • Designing the digital touchpoints and features of the platform to directly address the identified customer pains and gains, ensuring a seamless and engaging decision journey.
  • Iteratively testing the digital platform with a small group of clients and incorporating feedback to refine the value propositions.

Additionally, the organization utilized the Customer Experience Journey Mapping (CXJM) to visualize the entire customer journey across all touchpoints. This tool helped in identifying critical moments that matter to the customer and ensuring that the digital platform addressed these effectively. The implementation process involved:

  • Identifying all possible customer touchpoints and mapping out the current state of the customer journey, highlighting areas of friction and opportunities for digital enhancement.
  • Designing the desired future state of the customer journey with the digital platform, focusing on simplifying and enhancing the customer experience at each touchpoint.
  • Developing a phased rollout plan for the digital platform, prioritizing features and touchpoints that addressed the most significant customer pains and had the highest potential for impact.

The results of implementing these frameworks were transformative for the strategic initiative. The Value Proposition Canvas ensured that the digital platform was precisely aligned with customer needs, leading to increased engagement and satisfaction. The Customer Experience Journey Mapping provided a blueprint for a seamless digital customer journey, significantly reducing friction and enhancing the decision-making process for clients. These strategic efforts led to a marked improvement in bid win rates and client loyalty, validating the effectiveness of the approach.

Operational Efficiency through Technology

To enhance operational efficiency, the organization turned to the Theory of Constraints (TOC) and Lean Six Sigma methodologies. The Theory of Constraints, developed by Eliyahu M. Goldratt, focuses on identifying and addressing the single most limiting factor (constraint) in any process to improve overall performance. This approach was crucial for this initiative as it helped pinpoint critical bottlenecks in project delivery processes. Following this insight:

  • Conducted a thorough analysis of the entire project lifecycle to identify the most significant constraints that were causing delays and cost overruns.
  • Implemented targeted technology solutions, such as project management software, to address these constraints, focusing on improving flow and reducing project cycle times.
  • Monitored the impact of these changes on project delivery times and costs, making further adjustments as necessary to optimize performance.

Lean Six Sigma was also employed to systematically eliminate waste and reduce variation in construction processes. This methodology complemented TOC by offering a structured approach to continuous improvement. The organization implemented Lean Six Sigma by:

  • Mapping out all construction processes and using the DMAIC (Define, Measure, Analyze, Improve, Control) framework to identify areas of waste and inconsistency.
  • Applying Lean tools to streamline processes and Six Sigma techniques to reduce process variation, thereby increasing efficiency and quality.
  • Establishing a culture of continuous improvement by training project teams in Lean Six Sigma principles and empowering them to identify and implement improvements.

The combined use of the Theory of Constraints and Lean Six Sigma significantly improved operational efficiency. Projects were completed faster and at a lower cost, without compromising quality. These improvements not only enhanced the organization's competitive edge but also increased client satisfaction by delivering projects on time and within budget.

Sustainability as a Competitive Edge

For the strategic initiative focused on sustainability, the organization adopted the Triple Bottom Line (TBL) framework and the Natural Step (TNS) framework. The Triple Bottom Line, which emphasizes the three Ps: People, Planet, and Profit, guided the organization in balancing economic, social, and environmental objectives. This framework was pivotal in integrating sustainability into the core business strategy, ensuring that green building solutions were not only environmentally beneficial but also socially responsible and economically viable. The implementation process involved:

  • Assessing the environmental impact of construction projects and identifying opportunities to reduce carbon footprint and resource use.
  • Engaging with stakeholders, including clients, employees, and the community, to understand their sustainability concerns and expectations.
  • Developing a portfolio of sustainable building solutions that met these needs, creating value for both the organization and its stakeholders.

The Natural Step framework provided a science-based approach to sustainability, helping the organization to systematically reduce its ecological footprint. By following TNS principles, the organization:

  • Conducted a comprehensive assessment of current practices to identify areas where they were contributing to environmental degradation.
  • Set clear, measurable goals for improvement based on TNS's four system conditions for a sustainable society.
  • Implemented changes in project planning, materials sourcing, and construction practices to align with these goals, tracking progress and making adjustments as needed.

The adoption of the Triple Bottom Line and the Natural Step frameworks transformed the organization's approach to sustainability. It not only enabled the development of innovative green building solutions that appealed to a growing market segment but also positioned the organization as a leader in sustainable construction. This strategic shift resulted in increased market share, improved brand reputation, and a stronger competitive advantage.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Implemented a comprehensive digital platform, enhancing customer engagement and increasing bid win rates significantly.
  • Adopted advanced project management software and modular construction techniques, reducing project delivery times by 15%.
  • Developed a portfolio of green building solutions, leading to a 20% increase in sustainable project engagements.
  • Integrated the Theory of Constraints and Lean Six Sigma methodologies, achieving a notable reduction in operational costs.
  • Utilized the Triple Bottom Line and the Natural Step frameworks, enhancing the firm's market positioning as a leader in sustainable construction.

The strategic initiatives undertaken by the organization have yielded substantial improvements in operational efficiency, customer engagement, and market positioning. The digitization of the customer decision journey and the operational efficiencies gained through technology adoption have directly addressed the initial challenges of declining bid win rates and increased project delivery times. The significant increase in sustainable project engagements underscores the successful alignment with market demands for green building solutions. However, the results also highlight areas for improvement, particularly in fully realizing the potential cost savings from operational efficiencies. The initial investment in digital infrastructure and training, while necessary, has yet to show a full return on investment in terms of operational cost savings. Additionally, the resistance to change within the organization's culture may have slowed the adoption and optimization of new technologies and processes.

For next steps, it is recommended to focus on enhancing the return on investment from digital and technological initiatives. This could involve a more targeted approach to training that is directly linked to operational cost-saving outcomes and an internal marketing campaign to foster a culture more receptive to change. Further, exploring strategic partnerships with technology providers could accelerate the adoption of innovative solutions and reduce upfront costs. Continuous monitoring and adjustment of the strategic initiatives based on real-time data will be crucial to maximizing their effectiveness and ensuring the organization remains competitive in the evolving construction industry landscape.


 
David Tang, New York

Strategy & Operations, Digital Transformation, Management Consulting

The development of this case study was overseen by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.

To cite this article, please use:

Source: Customer Journey Optimization for a Growing B2B Tech Firm, Flevy Management Insights, David Tang, 2024


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