SETTING YOUR STRATEGY IN THE CONSTRUCTION
INDUSTRY IN KENYA

I used to think of strategy as a very complicated process which involved bringing in a few key people in the company, inviting external strategy experts, making 1-week reservations in remote hotels and analyzing slides upon slides of presentations on what the company’s future looks like.

While this might be true to some extent, this approach is very expensive and not functional to SME’s, especially in the construction industry in Kenya. However, very few companies in the construction industry have solid documented strategies in place. (Hope is their strategy). It’s the
reason why firms in the industry remain stagnant or decline in terms of performance.

So, how do you approach strategy in a simple and effective manner? How do you set strategy?
In my view, the way to set strategy is to simply seek answers to the following 3 questions:
1. Where and when do you invest resources in a validated new product or service (or an idea or opportunity)?
2. What or where are the potential threats or challenges that could have devastating effects on the company?
3. How do you continuously improve your existing products or services?

So, how does a company invest resources in a validated new product or service or idea? After successful Iterations of the new product or service. Successful companies in the field of construction have in the past made few but exceptionally good business choices at one point. For instance, Mombasa
cement limited, a Kenyan company that manufactures cement leveraged on new types of cement which caters for different application in construction. Key takeaway here is companies need to validate new products, services, ideas or opportunities by first proving the concepts on a small scale
first.

In the second question, the concept here is how does a company survive in the long run? This is what differentiates enduring companies from others. They survive epidemics, political unrests or changes, technological disruptors, etc. This question seeks to address what companies do in advance before any disruption occurs. This part of the strategy aims to assess both the internal and external environment and make urgent changes to the company.

In the third question, the aim here is to incrementally improve your current products or services. This involves relentlessly creating, evolving, exploiting, or expanding your products or services. A lot of companies make the mistake of chasing new “shiny objects” and ignore the primary products or
services.

Therefore, with these set of these simple but strategic questions, it is evident that setting a strategy should not be complicated process. Remember, the strategy of a company sets the methodologies of achieving the company’s clearly stated mission.

Some of the issues commonly faced by construction firms in Kenya that forms the basis of strategy include:
 -Revenue & profit growth
 -Focus versus differentiation — when and by how much

- To be a market leader or follower

The construction industry in Kenya is highly competitive and volatile and therefore no strategy is perfect. Yes a company should have a clear vision and a set direction for attaining that vision. It’s impossible to perfectly execute every laid-out plan but then again, every company should act and innovate on the plan, nevertheless.

It is important to note that strategy is not the only thing that will make a company thrive in the construction industry in Kenya. Other aspects that need to be executed well include leadership, cashflow, sales, marketing and overheads.