Sun Tzu Ebook - PDF Version

Acknowledgment
The translation by Pan Jiabin and Liu Ruixiang, Peoples Republic of China, is used for the
quotes that appear at the beginning of each lesson.
A complete copy of that translation can be found in the book Sun Tzu for Execution: How to Use
the Art of War to Get Results by Steven W. Michaelson
Strategies for Contractors from Sun Tzu

by Ted Garrison
Published by:
New Construction Strategies
Ormond Beach, Florida
1-800-861-0874
Copyright 2014 by Ted Garrison, all rights reserved
Table of Contents
Introduction
Lesson #1: The Importance of a Superior Strategy
Lesson #2: The Offensive Strategy
Lesson #3: Knowledge & Experience Critical to Planning
12
Lesson #4: The Strategy of Massing or Focus
15
Lesson #5: The Strategy of Flexibility
18
Lesson #6: The Strategy of Opportunity
21
Lesson #7: Know Yourself
25
Lesson #8: Understand Your Situation
28
Lesson #9: Strategy Requires Commitment
32
Lesson #10: Strategy Is About Picking the Right Battles
34
Lesson #11: Planning Dictates Who Will Win
37
Lesson #12: Make Speed Your Ally
41
Lesson #13: Defeat Your Opponent at Its Strengths
43
Lesson #14: Be Careful of Frontal Attack Against Entrenched Competition
45
Lesson #15: Seize on Opportunities
48
Lesson #16: Planning
52
Lesson #17: Be Prepared
55
Lesson #18: Understand Your Situation
58
Lesson #19: Perception
60
Lesson #20: Understand the Competition
63
Conclusion
65
About the Author
68
Introduction
There are those who object to using The Art of War, written in the fourth century BCE, as
a business book, but it merely illustrates they have not read the book. Sun Tzu certainly
understood the perils of war and, therefore, his book emphasized the need to avoid war because,
as he points out, if you fight enough battles, you will eventually lose. If you doubt that theory,
consider two of the worlds greatest generals, Napoleon and Hannibal, both lost their last battles.
However, Sun Tzu was a realist and further advised that if one is forced to fight, one
must be prepared in order to increase one's chances of winning. It is no different in business;
planning will improve your chances of success. Numerous studies indicate that contractors that
preplan their projects are more profitable. For example, one of my clients that emphasizes project
preplanning has been able to reduce his labor costs by 30 percent.
Clemson University professor Dennis Bausman in an NCS Radio interview stated that his
research indicated that contractors with a strategic plan are 35 percent more profitable than those
without one.1 (To listen to the entire interview go to: www.TedGarrison.com/ncs-radio/strategychange/why-you-need-a-business-strategy/)
For those who think a war analogy is not appropriate, consider that though contractors do
not typically shoot at one another, a price war has casualties just like military wars, and these
wars often result in the death of a business in the form of bankruptcy. When contractors attempt
to compete on price, instead of by outthinking their competitors, they are in a war. So maybe the
analogy is justified. One misunderstanding about the analogy is you are at war not with your
Dennis Bausman, NCS Radio interview, 9/4/07 (www.TedGarrison.com/ncs-radio/strategy-change/why-you-needa-business-strategy/)
customer, but with your competition. Most military wars are usually over land; in business, the
battle is over the right to service the customer.
The term strategy comes with a significant military reference because the term was
initiated by the military. As military campaigns became more and more complex, the generals
learned there were many hidden costs that intensified without an effective plan or strategy, often
leading to exhaustion and destruction of even the victor. Its no different in business. Companies
that dont have an effective strategy end up wasting their valuable resources, which often leads to
self-destruction.
Strategy comes from the ancient Greek word strategos, or the leader of the army. In
essence, it was the commanding generals role to plan the entire war effort, including the
formations to deploy, the terrain to fight on, and what maneuvers to use. In a business the CEO is
responsible for the strategy. The business commander must plan what products or services to
sell, where to sell them, and to how to position the company in the marketplace. Business leaders
have learned, just like military leaders, the more thought and planning, the greater the chance of
success.
Just like innovative military strategies have allowed smaller armies as Alexander the
Greats to defeat the larger Persian army, an innovative business strategy can enable smaller
companies with fewer resources to succeed against larger competition.
Helmuth von Moltke, the chief of staff of the Prussian Army from 1857 to 1887, stated,
Strategy is more than a science: it is the application of knowledge to practical life, the
development of thought capable of modifying the original guiding idea in the light of everchanging situations; it is the art of acting under the pressure of the most difficult conditions.2 In
Robert Greene, The 33 Strategies of War, Penguin Books, 2006, xvi
essence, in business we need a practical approach on how to use our knowledge in lieu of greater
force to achieve our goals. Whats needed is a rational approach to defeat ones competition by
managing the situation through deft and intelligent maneuvers.
As explored in Sun Tzu Lesson #1, Sun Tzu wrote, Those skilled in war subdue the
enemys army without fighting. Their aim must be to take all under heaven intact through
strategic superiority.3 In other words, contractors need to outthink their competition instead of
attempting to outmuscle them in battles over price.
The common ways that people deal with [conflicts]trying to avoid all conflict, getting
emotional and lashing out, turning sly and manipulativeare all counterproductive in the long
run, because they are not under conscious and rational control and often make the situation
worse.4 In contrast, the effective strategist plans ahead to avoid conflict where possible,
prepares properly where its essential, and does it all in a controlled emotional state.
One obstacle to creating effective strategies is the fact that most people are tacticians, in
other words we are meshed into the day-to-day battles and find it difficult, even unnatural, to
focus on the long-term objectives. However, the effective strategist understands the need to
balance long-term and short-term objectives. Strategic planning and more specifically strategic
thinking needs practice and needs to be developed.
Since strategy is the art of getting the desired results, it is a valuable skill for everyone.
This skill is important whether someone is responsible for developing the company business
strategy, developing a project strategy, or even solving a problem. They all require a strategy to
achieve the desired goal. Therefore, Strategy by Sun Tzu for Contractors should be required
reading for all construction industry executives and managers.
3
4
Sun Tzu, The Art of War, Chapter 3

Robert Greene, The 33 Strategies of War, Penguin Books, 2006, xvi
Strategy by Sun Tzu for Contractors is divided into twenty individual lessons. Each
focuses on one piece of advice by Sun Tzu.
Sun Tzu Lesson #1

The Importance of a Superior Strategy
Those skilled in war subdue the enemys army without fighting. Their
aim must be to take all under heaven intact through strategic
superiority.
Sun Tzu, The Art of War
Chapter 3: Attack by Stratagem
As indicated in the introduction, contractors need to avoid competing on price as much as

possible because that is the equivalent of going to war in business. To do this on a consistent
basis, contractors need to develop strategies that allow them to compete on value by
differentiating their services from the competitions.
Its important to understand even if you are forced to fight, you are fighting with your
competitors, not your clients. In war, armies fight over land to give to their sovereignin
essence, their client. In business, we fight our competition for the right to serve the client.
To differentiate their services, a contractor must outthink its competitors by doing one or
both of the following:
Do what they do not do.
Do what they do, but do it significantly better.
Unfortunately most contractors focus on the second option, but its difficult for a builder to be
significantly better than other good builders.
The solution is to do something different. To provide services your competitors do not

provide, you must become a Blue Ocean Contractor, a contractor that does different things than
the competition. Being different requires expanding how we define construction services. For
example, contractors need to offer value from the day the project is being considered all the way
through the projects life cycle until its torn down. Why is this essential? First, the time frame of
the construction process in most cases is only a few percentage points of the projects life cycle.
Second, the construction cost typical ranges between 10 and 18 percent of the total lifetime cost
of the building. When a contractor expands its services beyond the narrow construction phase, it
opens up many opportunities to provide clients superior value.
Many clients understand this concept. For example, my NCS Radio interview with Robert
McCoole, vice president of the Facility Resource Group at Ascension Health, offered some
insights. When I asked how contractors could do business with his organization, he responded,
The only firms that would get through the filters we have would be really good firms to start
with, really strong firms that we know are that just from their reputations in the industry. But the
real thing that I look for that would perk up my antenna is preconstruction expertise. Expertise in
the preconstruction phase with very reliable early pricing capabilities and to be able to sit at the
early design table with the client, architects and engineers, and a few user groups and contribute
in that early phase when its being programmed and designed into the schematic phase and not
just wait until there are lines on paper and then take those back to their office to price. We need
real-time pricing and constructability and scheduling input as the project is being developed, and
so I look not at their ability to build the buildingthats a givenI look at their ability to
contribute in the preconstruction phase.5 (To listen to the entire interview go to:
www.tedgarrison.com/ncs-radio-clients-delivery-methods/)
What does this mean for contractors? It means they must be experts not only on
construction because, as McCoole said, that is a given, but also on the clients needs so they can
help provide solutions that maximize the value for the client.
Of course, if you are successful, others will try to copy you. However, Al Ries and Jack
Trout explained in their best-selling marketing classic, Positioning: The Battle for Your Mind, if
you introduce a new idea, you will create a superior strategic position. Being first at something
will be explored in greater detail in the next lesson, but for now its sufficient to understand that
you need to initiate new values then work hard to constantly improve that value to maintain your
leadership position.
At the end of the day, if you are not making sufficient profits because the competition is
too intense, I hate to tell you, but you do not have a superior strategy. Of course, there are bad
economies and other issues that affect the marketplace, but in those situations, you need a
strategy that addresses those issues. A great strategy for a boom period might not be a very good
strategy in a recession. However, even in the tough markets that occurred from 2008 through
2013, I have seen contractors not only survive but thrive and grow substantially as a result of
their superior strategies.
Avoiding competing on price starts with the creation of a strategy that differentiates your
services by understanding your clients current needs and creating superior solutions that address
those needs.
Robert McCoole, NCS Radio Interview, 9/21/11 (www.tedgarrison.com/ncs-radio-clients-delivery-methods/)
Sun Tzu Lesson #2

The Offensive Strategy
Generally, he who occupies the field of battle first and awaits the enemy is at
ease; he who arrives later and joins the battle in haste is weary.
Chapter 6: Weakness and Strength
The prior lesson introduced the importance of being first to propose something new, and
this lesson from Sun Tzu reinforces that concept. Reis and Trout reported, History shows that
the first brand into the brain, on the average, gets twice the long-term market share of the number
two brand and twice again as much as the number three brand. And the relationships are not
easily changed.6 When their book was published, the conventional wisdom was that they
offered some revolutionary marketing strategies, but their most powerful marketing position
wasnt a new strategy. Sun Tzu had introduced the strategy nearly twenty-five hundred years
earlier, demonstrating that great strategies have a long life.
All three authors argued the leadership position established by being first creates a strong
competitive advantage. Reis and Trout stated, You just get there first with the mostest.7 Other
studies support this position as they find that companies that benchmark against other firms
slowly fall behind their competitors. The problem is that benchmarking against the leader has
you playing catch-up because while you are attempting to catch the leader, the leader is moving
further ahead.
6
7
Al Reis and Jack Trout, Positioning: The Battle for Your Mind, Warner Books, 1981, 43
ibid
For the customer, the question is simple: If the leader is better qualified, why should I
even consider someone else? The only reason is for a lower price. When the follower attempts to
promote the initiatives value that he is copying, he often ends up promoting the leader. If the
client agrees with the value being presented, why shouldnt he select the leader to provide it? So
the first company to stake out a position is the leader. The next best position is goes to the lowcost provider. Everyone else falls in the unsustainable position of the undefined middle.
To be able to create a new environment of limited competition, or become a Blue Ocean
Contractor, requires planning. Planning is about identifying your companys direction, or North
Star. You must ask yourself what you are trying to accomplish. Once you have that answer, you
need to ask, if you deliver on that, how you will differentiate yourself from your competitors. In
addition, the planning process needs to identify potential opportunities that can add value for
clients then develop a strategy to maximize that value. It should also identify the risks to that
strategy then determine what needs to be done to eliminate or at least minimize those threats.
One danger of planning is paralysis by too much analysis. Since the company is
attempting to sail into unchartered waters, there is a tendency to want more and more
information, which postpones action. Instead, just consider the major factors and develop a plan
to address them; then take action. Your initial plan will not be perfect, but you can keep
improving it from the knowledge gained from the action. Thats OK! General Dwight
Eisenhower said, The plan is useless; its the planning thats important.8 The key is to learn
from the process and keep adapting the plan to the conditions as they unfold. A sailor wouldn't
set the sails in the proper position to get out of the harbor then just leave the there for the entire
trip across the ocrean. The rigging needs to be adjusted as new environmental factors pop up.
Dwight Eisenhower, www.chacha.com
10
However, the planning process enables you to anticipate problems, so you are better prepared to
deal with them when they occur. The unknown was no different for the great explorers. Not
knowing what they would encounter, they trained and prepared as best they could, so they were
better able to adapt to the actual situations they encountered.
The real opportunities begin to reveal themselves when contact is made with the client.
Instead of telling clients what you can do for them, it is critical to discuss what challenges they
are facing then explore how you can work together to solve the issues. Open dialogue builds trust
and a sense of common purpose. Prospects are more likely to bring you into the process as a
partner when they believe there is a common goal. A sound business relationship with clients
helps to protect you from attacks by competitors.
11
Sun Tzu Lesson #3

Knowledge and Experience Are Critical to Planning
Those who do not know the conditions of mountains and forests, hazardous
defiles, and marshes and swamps cannot conduct the march of an army. Those
who do not use local guides are unable to obtain the advantages of the ground.
Chapter 7: Maneuvering
In the previous lesson, we discussed the importance of planning. In this lesson, Sun Tzu
emphasized effective planning requires one to be on the ground and to understand the situation.
How often do we see people who are far removed from the event giving orders? How often do
we see people giving orders when they do not understand the situation even though they are on
the ground?
The sad answer is far too often.
Alan G. Robinson and Sam Stern reported in their book Corporate Creativity that when a
company wins an award for innovation, more than 50 percent of the time the idea was initiated
by someone not in management. They added that ideas generated by the rank-and-file typically
have a greater effect than those generated by management.9 This happens not because the
frontline people are smarter or because management does not know what its doing. It occurs
because the frontline people often have a better understanding of the situation as a result of
dealing with it on a day-to-day basis. Therefore, they are able to develop the best solution. The
Alan G. Robinson and Sam Stern, Corporate Creativity, Berrett-Koehler Publishing, Inc., 1997
12
Japanese have a term genchi genbutsu, which means go and see. This is an important concept
of Lean construction.
The dangers of not being on the ground can be disastrous. For example, in one case an
estimator for a contracting firm bid a project and won the bid. When the operations manager
went out to the site, he was surprised to see an existing building because there was no mention of
it in the estimate. When he asked the estimator about it, the response was, There was nothing on
the plans about an existing building. The operations manager pointed to the note indicating that
the contractor was responsible for clearing the site as necessary. Clearly a site visit was required.
This mistake resulted in the estimators being fired. In Sun Tzus terms, he fell into a swamp he
did not know existed.
But maybe a bigger problem is having people without sufficient experience making
decisions. Despite my civil engineering degree, I was shocked at how little I knew when I arrived
on my first job site. Sure, I knew a lot, but probably just enough to be dangerous. Fortunately, I
survived my ignorance because I was mentored by several men who knew the lay of the land and
had the experience to guide me. In essence, they were my local guides.
In reality, companies can get themselves into trouble by doing the same thing, namely,
taking on types of projects where they have little or no experience or knowledge. Different types
of projects have different minefields. The problem is if you are unfamiliar with those types of
projects, you are likely to step on a mine. Its not only about navigating the minefield
successfully. The greatest-value contractors and designers bring their experience and knowledge
to the project to help the owner make the right decisions. If you are like Lewis and Clark, with
everything totally new, you are not likely to anticipate potential threats or opportunities. This
practice is costly for clients, who deserve better.
13
The contractors job is more than knowing how to install the bricks and mortar; it is
knowing if the bricks and mortar are the best solution.
Of course, contractors want to expand on their experience and not get frustrated by a
catch-22. If you do not have experience, you cannot get the job, and if you cant get the job, how
do you get the experience? The answer is to find your local guide, someone who has the
necessary experience who will do that first job with you. When new types of projects come along
where no one has the exact experience that is required, its important to find someone who at
least understands the type of terrain. In other words, they may not have traversed the actual
marsh in question, but they are at least familiar with the challenges presented by marshes.
Experience building foundations on bedrock is not of much help when attempting to build a
foundation in New Orleans, where you are building on unstable soil.
14
Sun Tzu Lesson #4

The Strategy of Massing or Focus
We can form a single united body at one place while the enemy must scatter his
forces at ten places
Chapter 6: Weaknesses and Strength
The massing of ones forces has been a basic military tactic for at least twenty-five
hundred years. In recent years, General Colin Powell was noted for his position that whenever
the United States deployed troops, they should be in a position of overwhelming superiority.
Massing of resources is an important concept because every army as well as every business has
limited resources and needs to focus those resources where they can do the most good, or they
will dilute their strength. When the military spreads its forces too thin, it becomes vulnerable,
while businesses lose their competitive advantage.
In business its typically not about massing sheer numbers of people or capital. Instead,
its about bringing the necessary knowledge or expertise to bear to deliver superior value to the
client. However, its essential that a company provides sufficient human resources and capital to
implement the initiative. Attempting to pursue any initiatives without sufficient resources is the
equivalent of being spread too thin, and it weakens the contractors competitive advantage.
Another problem is revealed when contractors are asked, What do you build?
Unfortunately some respond, We can build anything. Its true a quality commercial builder can
most likely build any type of building, but thats not how a high-performing contractor provides
its greatest value. Every type of building has its unique minefield, and the high-performing
contractor knows those unique problems. Not only can it anticipate the potential problems, but it
knows how to prevent them from occurring. The solution is about accumulating knowledge and
15
experience by focusing on certain types of buildings, not by doing a little of everything. In

essence, contractors need to mass their learning experience.
Some contractors become experts on the local market. This local market expertise occurs
where the environment is sufficiently different to create problems for contractors that are not
familiar with its irregularities. Whats important is massing ones expertise by focusing on a
limited number of specialties. Large contractors have the resources to develop more specialties,
but even the largest contractor cannot do everything, especially at a high level.
Its no secret that in many industries today, upstream activitiessuch as sourcing,
production, and logisticsare being commoditized or outsourced, while downstream activities
aimed at reducing customers costs and risk are emerging as drivers of value creation and
sources of competitive advantage.10 This opinion is especially true in the construction industry,
where construction activities are believed to be a commodity. However, when contractors can
mass their knowledge about their clients needs, they deliver superior value. In this way, they
become more profitable because their clients are willing to pay more to receive a superior value.
How does a contractor mass its necessary expertise? It starts with identifying what it does
better than its competitors and focuses on that. Companies as well as people create breakouts by
focusing on improving their strengths. It also helps to talk to clients. One contractor I
interviewed in writing Strategic Thinking did just that and asked, What could we be doing for
you that were not currently doing? Based on those conversations the contractor adjusted its
services and was able to increase its profit margins by 4 percent.
Contractors should determine their strengths then work on further improving them. However,
dont make the mistake of trying to focus on too many things. According to the Pareto Principle,
10
Niraj Dawar, When Marketing Is Strategy, Harvard Business Review magazine, December 2013, 101
16
better known as the 80-20 rule, 20 percent of what you do will generate 80 percent of the results.
The equivalent of massing your resources is to focus your effort on the most valuable 20 percent
of opportunities.
17
Sun Tzu Lesson #5

The Strategy of Flexibility
In battle, there are not more than two kinds of posturesoperation of the
extraordinary force and operation of the normal force, but their combinations
give rise to an endless series of maneuvers.
Who can exhaust the possibilities of their combinations?
Chapter 5: Use of Energy
Invariably there are those companies that are looking for a simple solution to solve their
current challenges. Unfortunately there is no silver bullet because clients cannot be placed in
simple boxes either. They are almost as many different types of clients as there are clients. They
each have their own set of priorities, biases, and needs. Its the responsibility of the contractors
and designers to sort through them and offer a proposed solution that best fits the clients
circumstances.
The two postures that Sun Tzu addressed can be applied to business today. The first is
what you do, and the second is how you do it. Businesses should compete on value because that
approach is more profitable. Unfortunately that statement leads to some confusion or
misunderstanding. Some contractors will argue that they are forced to compete on price. Since
their work is awarded to the lowest bidder, they must compete on price. If two products or
services are exactly equal, then the one with the lowest price has the best value. However, if a
contractor can find a better way to do something that lowers its costs, the contractor can lower its
18
price and still maintain its profitability, which is an example of competing on value even in the
low-bid environment.
The solution is to start with the right thing to do. This approach is what allows the
company to maximize the value it gains from its knowledge, experience, and wisdom to
differentiate its services from competitors. A client of mine, a road builder, earns higher-thanaverage profit margins because they bid only work their competitors do not know how to do. The
competitors throw money at the uncertainty, while my client puts the right number on the work
and adds a higher fee because he knows he will get it.
No matter how much we would like to avoid price, its impossible. Virtually all clients
have budgets that define what they can afford. We might like the value offered by a Rolls Royce,
but for most of us, it exceeds our budgets, so it does not matter how good a deal it is. This brings
us to the how of the equation.
Lean construction, best-value procurement, and integrated project delivery are all about
delivering what the clients want at minimum cost or maximizing what they can have for their
budgets. It is not about squeezing the players but about creating an atmosphere of collaboration
to squeeze out the waste from the construction process. The mistake that most people make when
attempting to reduce costs is focusing on improving the efficiency of the tasks. While there is
always room for improvement in the tasks, the greatest opportunity for improvement is between
the tasks. For example, Clemson professor Roger Liska has discovered there is a 20 percent loss
in construction workers efficiency due to waiting for materials, information, equipment, or
supplies. Another 15 percent is lost due to poor scheduling, resulting in work areas that are too
congested. Both of these problems affect the workers efficiency in performing his work, but the
cause is outside the task.
19
The two above examples account for more than a third of a workers potential
productivity and result from poor planning. In contrast, a union electrical contractor eliminated
the 30 percent loss by better planning its projects. The planning anticipates the potential
problems that would cause delays, which allows the company to take the necessary actions to
prevent the problems from occurring. This contractor gets the work because he has a lower price,
but he has a lower price because he brings superior value to the project through superior
planning.
The contractor has an almost endless list of ways to differentiate itself by the way it combines
what the company does and how it does it. Its the contractors job to identify the mixture that
will best fit the needs of a particular client then deliver those results.
20
Sun Tzu Lesson #6

The Strategy of Opportunity
The commander must create a helpful situation over and beyond the ordinary
rules. By situation, I mean he should act expediently in accordance with what
is advantageous in the field and so meet any exigency.
Chapter 1: Laying Plans
Often value-based contractors identify their uniqueness as their ability to manage

complex or difficult projects. Its not just that high-performing contractors do a better job on
complicated projects, but on complex projects, they have less competition. In other words,
because of their special expertise and knowledge, they eliminate competition. Since their
competition often doesnt know what to do, they increase their contingency that gives the highvalued contractor a cost advantage. This fact is supported by the Performance Based Studies
Research Group at Arizona State University, where their studies indicate that the more complex
the project, the more likely the high-performing contractor offers the lowest cost. Professor Dean
Kashiwagi states, Price is always most important because the high performer can always
perform at a lower price.11
Kashiwagis statement causes confusion because some people think it means they can
simply accept the lowest bid. Unfortunately if the contractors ability to perform is not
considered as part of the determination, it can result in a low-performing contractor turning in a
lower bid because that contractor does not understand whats required. When the low-performing
11
Dean Kashiwagi, Ph.D., PE, 2014 Best Value Standard, Kashiwagi Solution Model, 2104, 3-2
21
contractor runs into unanticipated problems, it usually results in cost and/or schedule problems.
Unanticipated problems help explain the results Nadine Post uncovered during her research for
an Engineering News Record article. She found that 33 percent of construction projects were
over budget, 42 percent were completed late, and 13 percent had claims and litigation pending.12
In contrast, the Performance Based Studies Research Group has documented that when the
contractor was selected based on performance and not just price, 98 percent of the time, there
were no time delays or contractor-generated change orders.13
Its important for every contractor to understand how it maximizes the value it delivers to
its clients. Clients who understand this value will be willing to pay the contractor more;
therefore, the contractor should focus on these clients. The previously mentioned contractor who
increased his profit margin by 4 percent by asking what else he could do reinforces this point.
Contractors should use their special expertise as the companys North Star to indicate the
direction they should pursue.
Focusing on the companys North Star will afford opportunities to help create client
value in ways beyond the mere construction activities. In other words, if a contractor has special
knowledge in the operation of a warehouse facility, the contractor can help to ensure not only
that the building is built to the highest standards of construction but also that the completed
facility operates at peak efficiency, allowing the building operator to maximize its profitability.
Ive seen buildings with numerous truck bays, similar to warehouses, which have turning radii in
the delivery area that prevents trucks from using all the truck docks at the same time. This
mistake is expensive and could have been prevented. When a contractor brings expertise beyond
12
13
Nadine Post, Building Teams Get High Marks, Engineering News Record, 240(19), 3239
Dean Kashiwagi, Ph.D., PE, 2014 Best Value Standard, Kashiwagi Solution Model, 2104, 1-3
22
pure construction activities, it becomes helpful beyond the ordinary rules. While this type of
expertise is not directly related to the construction process, it certainly offers contractors an
opportunity to differentiate themselves from the competition.
The other advantage of this expertise is the ability to plan better to meet any exigency.
Unfortunately too many contractors do not properly plan their projects. They create a schedule
and a budget and determine a method of operation, but they fail to perform a thorough risk
analysis. If a contractor doesnt follow through with risk analyses of its projects, including risks
to schedule, budget, and quality, the contractor misses an opportunity to differentiate itself. My
client that decreased his labor costs by 30 percent did this by eliminating delays and issues
caused by unanticipated problems.
There are several potential reasons for this failure to plan properly. First, they do not
understand the value of planning. How often have we heard the comment from people when
asked if they spent time planning, My boss expects me to hit the ground running! My response
is, What if you are running in the wrong direction? Second, they do not understand how to
properly plan, including effective risk analysis. Third, they dont have the experience and
knowledge in a specific type of project to anticipate the potential risks.
The problem with poor planning is that when problems are not anticipated, the contractor
is surprised when they occur. Surprises result in higher costs and delays. While many contractors
attempt to address the major problems, they ignore the smaller ones and fix them as they occur.
But the solution, which is probably not ideal, tends to be more of a Band-Aid and costs more to
implement after the problem surfaced. Field people often complain the same problems occur on
every project. The costs from correcting these routine problems are often merely included in the
23
companys unit prices and hide their true cost. Eliminating these problems can drastically reduce
a contractors costs.
24
Sun Tzu Lesson #7

Know Yourself
Know the enemy and know yourself, and you can fight a hundred battles with
no danger of defeat.
When you are ignorant of the enemy but know yourself, your chances of
winning and losing are equal.
If ignorant both of your enemy and of yourself, you are sure to be defeated in
every battle.
Chapter 3: Attack by Strategem
It does not matter what kind of competitive situation you are in, the above words of
advice by Sun Tzu are obvious. Unfortunately its often ignored at ones peril.
Leadership is the ability to perceive ones situation and align ones resources, both
human and capital, in the most effective way. Alignment requires understanding ones own
capabilities as well as ones competitors capabilities. The most successful strategies are those
that pit ones strengths against ones competitors weaknesses.
Every person and every organization is perceived in three distinct ways:
1. Who you think you are
2. Who others think you are
3. Who you really are (This one is the most important.)
Too many people and organizations spend too much time on their weaknesses instead of
focusing on their strengths. The reality is if you are weak at something, you will probably never
become dominant in that area, so it is difficult to compete successfully in that arena. However, if
you are deficient in a critical skill, you must bring that skill up to an acceptable level. For
25
example, if your estimates have many errors, its important that you create a procedure that
eliminates that problem, but its not necessary to become the worlds greatest estimator; you
merely need to do a satisfactory job.
Your strengths are where your opportunities lie because your strengths are what will give
you a competitive advantage. For example, if you build projects in less time than your
competitors, then on projects where speed is critical, you would have a competitive advantage.
Owners might even be willing to pay a slight premium for your speed. However, if you are going
up against someone who is faster than you, then you are probably wasting your time.
Marcus Buckingham and Donald Clifton explained in their book, NOW, Discover Your
Strengths, To excel in your chosen field and to find lasting satisfaction, in doing so, you will
need to understand your unique patterns. You will need to become an expert at finding and
describing and applying and practicing and refining your strengths.14
In other words, once you identify your strengths, its your job to continuously improve
those strengths because that is how you can create a world-class advantage. Of course, most
contractors do not need to start out by being world class at something; they simply need to be the
best in their niche, whether geographical area or type of work. As that expertise increases, their
sphere of influence will increase.
The other part of this process is identifying where that competitive advantage delivers the
greatest value. The process starts by understanding what your clients need and which clients can
benefit the most from your competitive advantage. Matching your advantage to what is important
to your clients is critical because if your clients value your strengths, they may be willing to pay
a premium to gain that advantage. The process must also include an analysis of your competitors.
14
Marcus Buckingham and Donald O. Clifton, Ph.D., NOW, Discover Your Strengths, The Free Press, 2001, 3
26
For example, you are thinking of expanding your geographical area. There appear to be several
opportunities in a city on the other side of the state, but that city has a company that has strengths
very similar to yours. This new city might not be a good place for you to attempt to compete
because if you are similar, they have the advantage of being a local contractor. However, if you
can bring something extra to the client, you might be able to break into the market. Another
approach would be to have a past client, who used your services in another location, select you to
do a project in the new city.
There is no way I can cover all the potential scenarios because they are virtually endless.
Therefore, its your job to honestly evaluate your strengths and opportunities against your
competitions. One way to develop an accurate evaluation is to talk with your past clients and
prospects and ask the following:
Why did you hire us in the past?
Why are you considering hiring us in the future?
What are your concerns about using us?
This information will allow you to develop the best strategy based on your strengths.
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Sun Tzu Lesson #8

Understand Your Situation
One must compare various conditions of the antagonistic sides in
terms of five constant factors:
1.
2.
3.
4.
5.
Moral influence
Weather
Terrain
Commander
Doctrine
These five constant factors should be familiar to every general. He

who masters them wins; he who does not is defeated.
Sun Tzus five constant factors can be translated as follows for business:
1. Moral influence is the equivalent of the companys mission.
2. Weather is the equivalent of the outside forces that affect the business.
3. Terrain is the equivalent of the marketplace.
4. Commander is the equivalent of the leader (CEO).
5. Doctrine is the equivalent of guiding principles or ethics.
Companies that fail to address these critical factors in their business planning will place
themselves at risk. Lets examine each of them.
28
Mission
As I wrote in Strategic Planning for Contractors, The most important thing concerning
a mission statement is that it must reflect the business owners commitment and passion. Those
are what create the staying power to overcome the inevitable obstacles on the way to the gold
ring. You need to ask yourself, What is the company promising? What does the company
guarantee? In essence, your mission should be your North Star.
A sustainable competitive advantage is attained by creating a win-win environment,
which means there must be a balance between the companys and the clients needs. Therefore,
the mission is not about money, but ideas and beliefs. The good news if you have the right ideas
and beliefs, the money will follow.
Outside Forces
The outside forces that are affecting the construction industry are almost endless. Gary
Hamel and C. K. Prahalad addressed this challenge in their book, Competing for the Future,
when they wrote, If a top management team cannot clearly articulate the five or six fundamental
industry trends that most threaten its firms continued success, it is not in control of the firms
destiny.15 Each company is affected differently by the events swirling around it because each
comes with a different set of strengths, weaknesses, and circumstances. Your role is to identify
the trends that you can turn into opportunities and those that require protection.
Marketplace
Understanding the marketplace comes down to three simple questions:
15
Gary Hamel and C. K. Prahalad, Competing for the Future, Harvard Business School Press, 1994
29
1. What are you selling? (Hint: It better not be construction services.)

2. Who are you selling to? (Hint: It better not be whoever will buy.)
3. How do you differentiate yourself from your competitors? (Hint: It better not be
price.)
The idea is to stake out a portion of the marketplace where you have a competitive
advantage because you provide better value to the client than your competitors do. When the
client understands the value you are delivering, he may even pay a premium for your service.
However, if you merely do what your competitors do, then you will be forced to compete on
price. Differentiation is the key.
Leadership
Leadership is not about command and control. The command and control stifles
ingenuity of those below the leader and is counterproductive in the long term. When command
and control leaders leave an organization, the organization usually flounders. Effective
leadership is about perceptionthe ability to understand the current conditions and align the
resources, including both human and capital, in the most effective manner. What makes this
approach so powerful is all the participants now know what they are supposed to do, and if
anything happens to the leader, they can still function and perform as required.
Outstanding military leaders understand the importance of alignment over command and
control. The commanding general of the division considers the mission before him then aligns
his brigades in the most effective manner. He then explains to the brigade commanders their
mission within the larger division mission. The brigade commanders do the same thing with their
battalions. The battalion commanders do the same with their companies, and so on down the line.
30
In this process each leader defined the mission, developed a master plan, and aligned his
resources. It should be noted the leaders did not tell their subordinates how to do their jobs; they
merely told them what mission or job they had and how it related to the bigger picture. This last
step is critical because the various entities do not operate in silos. Everyone needs to know what
those around him are doing, so appropriate plans can be made and support can be provided.
Just think how more effective projects could be if they followed the above process.
Guiding Principles or Ethics

The definition that I prefer for client is someone under the protection of. It should be
obvious that a business must treat its clients fairly and honestly. The above definition of client
embraces that concept. While clients may deal with you if you do not follow that philosophy,
they will avoid you if they have a choice. If you doubt that, consider the following questions.
How long would you keep your doctor, attorney, or CPA if he or she were not protecting you? I
would venture to say not long, so why should they keep you as a contractor if you are not
protecting them?
So how are you addressing those five factors?
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Sun Tzu Lesson #9

Strategy Requires Commitment
To win battles and capture lands and cities, but to fail to consolidate these
achievements is ominous and may be described as a waste of resources and
time.
Chapter 12: Attack by Fire
Obviously contractors do not fight battles for land, but they do fight battles for marketing
turf. Breaking into a new market area or niche is usually difficult at best. Why? Because those
entrenched have an advantage. Then why do contractors work so hard and put so much effort
into obtaining a particular project in a new city then not make the necessary commitment to
remain?
Its even crazier when you consider that often the conquering out-of-town contractor has
to make concessions to get the initial project because otherwise the incumbent would win the
job. Unless one has a plan to take advantage of the success created by the initial project, a
considerable amount of resources and time will be wasted. That time and effort could have been
better spent in obtaining work in markets where the contractor was already established.
Unfortunately too often contractors go after a project because the project is appealing or
they simply need work and are forced to take work anywhere they can find it. In reality, this is
not a business acquisition plan; it is a reactionary plan that can be very costly. If the obstacles are
too great for the contractor to overcome and it does not get the project, then the entire effort is a
waste. If the contractor spends the extra time and money necessary to win the initial project in a
32
new city or niche but doesnt have a plan in place to leverage that success into additional
business, then its also a waste.
Often contractors establish their project job site as the companys office in a new city.
But the truth is that the people on the job site are focused on the current job, not on getting new
work. The result is no new work comes about, and after the project is over, the contractor closes
its office and wonders why it had trouble breaking into new market.
The first step always should be to decide what markets you want to pursue, whether you
are talking about geographical markets or some particular market niche. Once you identify
potential growth markets, then you should develop a plan to exploit that market. If the project is
not in one of those markets, you should pass on the project. The exception would be if the project
is for either a past or current client because your client relationship might level the playing field,
if not tilt it in your favor. However, this situation is not the same as trying to break into a new
geographical market because, in this case, the market is the client. But if this new location is
attractive, then you should not only mobilize for the project but make the necessary effort to
obtain additional work and take advantage of the leverage the current project created.
Every company, no matter how large it is, has limited resources; therefore, it cannot
afford to waste them. Not taking advantage of opportunities that you have created is a big
mistake. Strategic planning is about identifying opportunities, but once those opportunities are
identified, they must be prioritized. Starting at the top of the list, you should commit sufficient
funds and effort to the highest opportunities to maximize their chance of success. Any less of a
commitment, as Sun Tzu would say, is a waste. When there are insufficient people or funds to
prosecute an opportunity properly, it should at least be postponed until sufficient people and
funds are available.
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Sun Tzu Lesson #10

Strategy Is about Picking the Right Battles
If you are not sure of success, do not use troops. If you are not in danger, do
not fight.
Chapter 12: Attack by Fire
Unfortunately too many contractors chase any job that comes along then wonder why
they are forced to compete on price. Typically road builders make less than the average for all
general contractors, yet one of my clients makes more than the average. He explained, We only
bid jobs our competitors do not know how to do. In essence, he picks his battles.
Of course, I understand that when contractors do not have work, they are forced to be less
selective or, even worse, not selective in the jobs they seek. When people or companies are
desperate, they will do whatever is necessary to survive. We have all heard stories where
someone cut off his own arm to survive. Contractors get into this situation for a variety of
reasons. Sometimes management is negligent, not identifying the companys strengths and
positioning it as the expert in that particular niche or geographical area. Other times it is simply
bad luck. For example, the economy simply turns bad and there is virtually no work of any kind,
so one must chase what little there is. Finally, there is the possibility of a combination of those
two situations.
However, I am not writing about those situations. Contractors in those situations are
desperate, and they do not have many options. Their problem was getting caught in that situation,
but that is a discussion for another day.
34
When I talk to contractors and ask how many bids they must turn in to get a job, their
answers are all over the place. They range from three (33 percent of bids accepted) to twenty (5
percent of bids accepted). My question is, What is it costing the contractor to turn in all those
bids? When the contractor finally is awarded a project, he is recovering only his estimating costs
if he is getting fewer than one out of ten bids. Sun Tzus advice was not to commit troops unless
you were sure of success. In the contractor wars, contractors should not commit manpower or
money to bids unless there is a reasonable chance of winning the bid. A 10 percent or less chance
is not reasonable.
In contrast, one contractor in Montana and Wyoming has 96 percent of his bids
acceptedthats right twenty-four out of twenty-five bids. He gets that kind of ratio because if
the prospects start talking price, he does not even bother to turn in a bid. He knows he is wasting
his time, so he does not commit the resources. This approach is not hindering his business. He
has more work than he can handle, and he is certainly not the cheapest contractor in town. He has
built a reputation for delivering quality work, being reliable, and providing a fair price that
represents great value for his clients when all factors are considered. While many of his
competitors offer lower bids, his clients realize the savings cannot justify the problems the lower
bid brings. They realize in the long run, he is the lowest-cost contractor.
While not everyone buys his value proposition, he finds more than enough clients, and
most of them are repeat customers. He is very profitable because he does not waste resources
chasing low-probability projects, and he earns a fair profit on the projects he gets. He does this
by focusing on things he does better than his competitors.
So what are you doing to stand out from your competition so you do not have to chase the jobs
that are not a good fit? Answer that question, and you will begin to improve your profitability.
35
Sun Tzu Lesson #11

Planning Dictates Who Will Win
The commander who gets scores during the calculations in the temple before
the war will have more likelihood of winning.
By examining the situation through these aspects, I can foresee who is likely to
win or lose.
Planning, planning, and planning are the three keys to project success. Exaggeration?
Maybe a little but it is almost impossible to overstate the importance of planning. And Im not
repeating myself by listing it three times. There are three specific levels of planning. The first is
the strategic planningthe companys plan on what types of projects it will pursue. The second
level is the project planning required for a specific project. The last level is at the field level and
is often referred to as pull planning. Here the people actually performing the construction work
plan their activities. Sun Tzus quote in this situation focuses on the first two levels of planning.
Many of the problems that contractors get themselves into are a result of not taking the
time to define their strategy in terms of what types of projects they should pursue. Contractors
should always attempt to compete on value, even in a competitive bid situation. Therefore,
contractors must identify where they have a competitive advantage and focus on those types of
projects. For example, some contractors have developed systems that allow them to build faster
than their competition, so they focus on projects where speed of delivery is the most important
issue. A client of mine, who happens to be a road builder, makes higher than average profit
margins on its projects. They accomplish this because they focus on bidding on projects that their
competitors do not know how to do. The value they bring to the project is their experience and
36
knowledge. This allows them to properly plan the project, including the right costs, and increase
their fee because they know they can get it. If their competitors do get the job, the competitor is
at risk because they do not know how to do the work and are not sure what it will cost.
Project planning is the key to the projects success. An electrical contractor improved its
project planning process and was able to reduce its labor costs by 30 percent. This contractor
does not wait until he gets the project to start the planning process; instead, he starts before he
turns in a bid. The planning process is actually a risk analysis. In other words, the planning
process is used to identify the potential problems and to develop strategies to eliminate or at least
minimize them. If a problem causes sufficient risk and can't be reduced to an acceptable level,
then the contractor should pass on the project.
Therefore, by identifying all the potential problems on the project, the contractor can
ensure that he is capable of overcoming them and ensure the estimate includes the necessary
resources to complete the project. While this approach might appear to increase the estimated
cost of the project, it does not. The project is properly estimated and scheduled, instead of
relying on figures that have hidden contingencies to deal with unknown problems.
When contractors do not properly preplan their projects, they tend to experience
problems in the field. Since many of the same problems occur on every project, they are thought
to be normal and fixing them is built into the unit prices. Unfortunately fixing problems after
they occur costs more than preventing them from occurring. Therefore, contractors that address
these problems in the preplanning phase are able to reduce their costs and lower their estimates.
Many contractors resist fixing the problems because they do not believe their unit prices
are inflated. A recent McGraw-Hill Construction report confirmed how many contractors even
believe there is a problem, and there is a huge difference between those practicing lean
37
construction and those that do not. Their report titled Lean Construction found that 62 percent
of Lean practitioners believe the construction industry processes are either inefficient or highly
inefficient, while only 14 percent of non lean practitioners believe the same. While only 19
percent of lean practitioners believe, the industry practices are efficient or highly efficient as
compared to 62 percent of non lean practitioners.16
Another example is explained in Glenn Ballard's doctoral thesis on Last Planner. He
reported, a key early finding was that only about half of the assignments made to construction
crews at the beginning of a week were completed when planned.17 Good contractors dont
believe that information until they test it themselves. They cant understand how they can finish
their projects on time yet have tasks be late. They dont take into account additional people
and/or overtime used to catch up. The problem is adding costs, but since this is standard practice,
the unit prices reflect these extra costs, and no one seems to notice or care. Why is there so much
resistance to fixing the problem?
Harvard professor John Kotter, author of Leading Change and other books on change,
explains the problem. He wrote, I became more than ever convinced that it all starts with
urgency. At the very beginning of any effort to make changes of any magnitude, if a sense of
urgency is not high enough and complacency is too low, everything else becomes so much more
difficult.18 In other words, contractors need a sense of urgency to make the necessary changes.
The good news is more and more contractors are feeling that pressure.
16
Smart Market Report, McGraw-Hill Construction, Lean Construction: Leveraging Collaboration and Advanced
Practices to Increase Project Efficiency, 2013, 6
17
Herman Glenn Ballard, The Last Planner System of Production Control, Doctoral Thesis at University of
Birmingham, 2000, 316
18
John P. Kotter, A Sense of Urgency, Harvard Business Press, 2008, ix
38
Sun Tzu Lesson #12

Make Speed Your Ally
There has never been a case in which prolonged war has benefited a company.
Chapter 2: Waging War
Speed is an ally. Learn to use it wisely!

If you reduce a projects duration by one-third, you can double or even triple your
profitability. For example, if you take a project that normally takes six months and reduce the
time to four months, you could do three similar projects in a year instead of two. The short cycle
means you would have three profits instead of two, and the overhead that was originally
expended over two projects would be spread over three. In essence, the faster schedule increases
the volume of work while improving the overhead efficiency. The resulting increase in
profitability comes without reducing the direct costs.
In many cases, the faster schedule can be achieved simply through better planning.
However, the amount of waste in the construction industry is substantial. Clemson professor
Roger Liska has estimated that the average construction worker operates at about 40 percent
productivity. Waiting for material, information, or equipment results in 20 percent loss in
productivity. The use of poor systems or procedures results in another 20 percent loss. And poor
scheduling of the work, resulting in congestion and interference, results in another 15 percent
loss. In other words, by reducing the waste in the schedule that prevents the mechanics from
doing their jobs, the work can be completed faster without the mechanics having to work faster.
39
The pull planning process can help contractors reduce these time wasters. The Lean
Construction Institute has discovered that more than 50 percent of the tasks that are assigned in
any given week are not finished on time. The number one reason projects do not finish on time is
because they could not start on time. Lack of coordination and collaboration among the various
stakeholders is a primary reason for delays on the project.
However, when the various stakeholders use a pull planning process, such as the Last
Planner process developed by LCI, significant improvements are experienced. For example,
the percentage of tasks completed on time on a weekly basis increases to about 80 percent.
However, maybe more important, LCI consistently reports reduced costs of 15 to 20 percent on
projects that implement this and other lean construction practices.
One of the major problems with the construction industry today is the high cost. This puts
a damper on the construction market, so if contractors can reduce their costs by eliminating
waste and speeding up their projects, they will lower costs and experience an upswing in
construction work. With faster schedules, contractors will be able to do more work with fewer
people, also increasing their profitability.
Do not misunderstand; speed just for the sake of speed is not necessarily beneficial. We
are not talking about just increasing the speed of the treadmill. We are talking about eliminating
the waste factors that delay the projectin essence, things that stop the treadmill. Good planning
increases project speed.
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Sun Tzu Lesson #13

Defeat Your Opponent at Its Strengths
The best policy in war is to attack the enemys strategy.
The second best way is to disrupt his alliances through diplomatic means.
The next best method is to attack his army in the field.
The worst policy is to attack walled cities. Attacking cities is the last resort when
there is no alternative.
Chapter 3: Attack by Strategem
This is interesting advice from Sun Tzu, but how does this affect a business strategy?
In essence, in business as in war, the best strategy is to trump your competitions
strategies. When you develop a strategy that takes away your competitors strength, they have
nowhere to go, which puts you in a powerful position. Of course, if it were easy, everyone would
do it.
You cannot be just a little better; you need to make their strategy irrelevant, or they will
still be able to sell their strength. In other words, if your competitor has established its strength in
a particular area, you must demonstrate that strength is no longer the best value to the client. If
you attempt to claim you are a little better than someone who is already established, it is a tough
sell. Since you are an unproven entity and offer only a little more, why should the client take a
risk working with the unknown? It is much safer to stick with the proven entity since there is
little to be gained by taking the risk to work with you.
However, when you can introduce a new way to substantially lower cost, speed up the
schedule, or improve performance, you will have a powerful position. This position can even
enable you to take clients away from your competitors.
41
The second best approach is using referrals to penetrate your competitors market. But
even with good referrals, it will be difficult to take clients away from your competitor unless
there is a substantial difference in what you provide. However, the referrals can help you
compete for clients that are not already aligned with your competitors.
The next best approach is to get into the trenches and battle your competitor. The
problem is this approach typically becomes a price war, and if there is not a significant
difference between you and the competitor, the battle will continue to be fought over price.
Unfortunately this is possibly the most common strategy in the construction industry, and it has
resulted in an industry with low profit margins and high turnover of contractors as reported by
Ken Simonson, Associated General Contractors of America's chief economist. However, if the
contractor can create a substantial difference, he can transition to a better approach. For example,
a road builder bid a project then worked with the city to speed up the project as much as possible
to earn the early completion bonus, but the town was still delighted by his successful
collaborative approach. In fact, other cities then began calling the contractor and asking the
contractor to design-build their next road so they could take advantage of its aggressive schedule.
Finally, contractors need to avoid taking on competitors that are well entrenched. In
business, it means companies that have established their superiority and own the market. Unless
you find something that a prospective client highly values and is not being provided by the
market leader, you will typically be unsuccessful. Unfortunately too many contractors attempt to
compete in this type of market by competing on price. This results in a bloody battle at best.
In the end, the best strategy is able to provide something the client values in a manner
superior to the competition. The further you are forced away from that position, the less
profitable and desirable the strategy.
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Sun Tzu Lesson #14

Be Careful of Frontal Attacks against Entrenched Competition
The art of employing troops is that when the enemy occupies high ground, do
not confront him uphill, and when his back is resting on hills, do not make a
frontal attack.
Chapter 7: Maneuvering
Sun Tzus advice should be self-evident, but too many contractors do not heed this sound
advice.
In their classic marketing book, Positioning: The Battle for Your Mind, Jack Trout and Al
Reis explained that marketing is about the battle for the customers mind. They went on to say
whoever establishes themselves first in the customers mind is in the strongest position.
Bear in mind that customers are inherently risk averse. Therefore, they are leery of trying
someone new if they are at least satisfied with the current vendor. In the 1960s there was the
saying: You cannot get fired for hiring IBM. IBM, as the established computer company, was
the safe bet. The Rogers Curve demonstrates the uphill battle one has to introduce new ideas.
Only about 2.5 percent of people create innovations while another 13.5 percent are what he calls
early adopters, people who like trying new ideas or products. In other words, fewer than one out
of seven people are interested in exploring new ideas until they are well established.
To overcome their entrenched position, you need to offer something substantially
different and more valuable to the client. However, even this approach can face obstacles
because if what you offer is too new or revolutionary, it may not be accepted or even believed.
Trout and Reis pointed out that the mind tends to reject information that doesnt compute.
43
Therefore, you need to lead customers in little steps because large steps make them very
uncomfortable. Unfortunately if the prospects do not understand or they are uncomfortable, they
will reject the idea. However, in most cases little steps will not allow you to differentiate yourself
from the leader sufficiently to get the work.
The situation is not hopeless. There are strategies to address this problem, but they do not
rely on a frontal assault, which could be suicidal.
One option is to establish your credibility in a market where there is not a dominant
leader. Credibility allows you to establish past performance standards that would support your
claims and provide credibility. It will also allow you to establish references and referral
opportunities in the new marketplace. The combination of strong supporting data and referrals
can certainly help level the playing field. Remember, unless you offer something different, you
will still run into a challenge: Why should I change vendors if Im happy with my current
vendor?
Option two addresses this problem. What contractors need to do is find a window into the
clients mind, a concern that is not being addressed. If the problem you are addressing is
important enough to the prospect, you have a good chance of getting him to change vendors, not
because you beat the current leader at its game, but because you changed the game. Your
position would be substantially stronger if you combined both options. In other words, if you
have documented proof that you can solve the clients problem and you have referrals that
support that claim, you will find yourself in a strong position. We see this occur in the
technology arena as the leader constantly changes as companies introduce new and different
products.
44
In the end, any strategy must be about providing superior value that is not only different
but can be substantiated. This condition is true whether you are the leader or someone
challenging the leader.
45
Sun Tzu Lesson #15

Seize Opportunities
Take advantage of the enemys unpreparedness, make your way by unexpected
routes, and attack him where he has taken no precautions.
Chapter 9: The Nine Varieties of Ground
In the previous Sun Tzu lesson, he advised not to make a frontal attack on a wellestablished enemy. His advice in this lesson could be considered a corollary of that lesson. In
essence, he is advising to attack where the enemy is not or at least where he is not well
established. What does this mean in business terms?
Typically it means entering a market where the competitor is not entrenchedin essence,
a marketplace he is not prepared to defend. This can be accomplished in several ways. One
approach is to enter a geographical area where your competitor is not established. However,
there is certainly someone in that geographical area that will provide competition, and since they
are already there, they will have an advantage unless you bring a strong reputation that can open
doors. This reputation can be achieved by having done high-profile projects that the local
community is aware of, or obtaining referral letters addressed to potential clients in your new
market. Just changing geographical areas might solve the problem with one competitor, but then
suddenly you are confronted with new competitors, so nothing has changed. The solution is for
contractors to introduce new values for the client.
When you introduce something no one else offers, you have little or no competition
because any potential competitor is unprepared. W. Chan Kim and Rene Mauborgne identified
a strategy they referred to as Blue Ocean Strategy, which is a euphemism for a market without
46
competition. They explain an intensely competitive market, such as the construction industry,
becomes a blood battle that turns the ocean red. In contrast, when there is limited or no
competition, there is no blood spilled, and therefore, the water remains clear blue. If contractors
want to escape the blood battle of hypercompetition, so common in the construction industry,
they need to strive to become Blue Ocean Contractors.
How does one become a Blue Ocean Contractor? It starts by redefining the contractor's
role, which means contractors must stop thinking of themselves as just builders. Unfortunately
for contractors, construction activities are perceived as a commodity, resulting in many people
feeling they can simply buy that service based on price. Contractors disagree with that mentality,
and though I agree with the contractors, the truth is our opinions do not matter. If the client
thinks you are a commodity, you are a commodity. However, maybe construction activities are a
commodity. If your competitor placed concrete properly and on time, how are you going to
differentiate your service? That would be difficult, and that is at the heart of the problem for
contractors, which is why contractors need a major shift in their thinking. They must stop
thinking of themselves as just builders and start positioning themselves as problem solvers.
While there are opportunities to solve problems and offer increased value in the
construction process, such as faster completion, this represents only the portion of the iceberg
that is visible above the water line. Contractors need to look at how they can improve the
building for its operational life, not just during the construction. They need to focus on how to
reduce operating expenses, including maintenance, energy consumption, and even operational
efficiency of the building user. The savings the contractor can generate in these areas can far
exceed the savings they can generate in construction. The reason is that construction costs
represent only about 10 to 18 percent of a buildings total lifetime cost and the construction time
47
frame is even a smaller percentage of the buildings life. Obviously its easier to find savings
when one considers 100 percent of the building costs, instead of just construction costs.
As an example, let us examine energy costs. Reed Construction Data states that the
national average square foot cost for a ten-story office building, including architectural fees, is
$163.48 per square foot.19 The energy costs for an office building run between $1.75 and $3.50 a
square foot per year.20 This means that every year an office building spends 1 to 2 percent of its
construction budget on energy, and this is before we build in the increasing cost of energy.
Therefore, if a contractor could eliminate all energy costs, in around fifty years, the energy
savings would cover the cost of the building. Compare this to a typical value engineering
exercise that finds a few percentage points in construction savings, which is only equivalent to a
few years of energy costs. You may argue that you cannot eliminate all the energy costs, but that
is not true. The Department of Energy built the National Renewal Energy Laboratory in Golden,
Colorado, in 2012, and it is an energy-neutral building. In other words, it produces all the energy
it needs. Further, this highly energy-efficient building was built within the DOEs original
budget. Originally this project was bid conventionally and came in over budget, but when the
DOE went to the design-build approach, they got everything they wanted for their budget.
Of course, when you factor in present worth and inflation and the other variables, it is
impossible to predict the exact savings, but I think the above example demonstrates that the
potential to create value outside the construction work is significant. This is true even if you do
not get to a net-zero-energy building but only create significant energy savings. In another
example of adding value outside the construction work itself, a contractor used a lean-
19
20
Reed Construction Data, www.reedconstructiondata.com/rsmenas/models/offices4/

Alphonse DellIsola and Stephen Kirk, Life Cycle Costing for Facilities, Reed Construction Data, 2003, 92
48
manufacturing expert to reduce the size of the factory and improve the factorys operating
efficiency. This example will be discussed later in greater detail.
Many contractors are afraid to specialize, or create niches, where they can build a strong
reputation and, therefore, a defensible position. They are afraid that if they do, they will lose
work outside that specialty. That is true, but when they go outside their specialty, they will be
forced to compete on price. When they provide unique solutions, their profitability increases
because there is no competition, and they provide superior value for clients. The trick is to ensure
that you create niches that have sufficient volume to support your organization.
The greatest opportunities today for contractors exist before the construction starts. By
contributing in the design phase of the project, they can provide significant value to the client,
and by using their knowledge and experience, they can differentiate themselves from the
competition.
While contractors often know the most cost-effective type of wall to use, they should also
help determine where that wall should be installed because that decision may create more
savings than the type of wall.
Competing on value, contractors need to not only be experts on construction, as that is a
given, but they need to be experts on their clients issues. By offering a better solution to a
problem, they can differentiate themselves from their competition. In essence, contractors need
to seek out client problems that are not currently being addressed. Filling these needs with
unique solutions offers the Blue Ocean Contractor outstanding opportunities that will make their
competitors defenseless.
49
Sun Tzu Lesson #16

Planning
A wise general in his deliberations must consider both favorable and
unfavorable factors. By taking into account the favorable factors, he makes his
plan feasible; by taking into account the unfavorable, he may avoid possible
disasters.
Chapter 8: Variation of Tactics
It should come as no surprise that Sun Tzu states that wise generals need to plan as
planning is just as critical to generals as to the business CEO. Sun Tzus recommendation
mirrors the planning process because it consists of two aspects: identifying both risks and
opportunities.
In an NCS Radio interview, Gregg Schoppman, a principal at FMI, discussed the
importance of planning. Their research confirmed that companies that plan properly are more
profitable.21 (To listen to the entire interview go to: www.TedGarrison.com/ncs-radio/projectmanagement-productivity/improving-productivity/ )As stated earlier, one of my clients reduced
his labor costs by 30 percent by improving his project preplanning.
The process of identifying potential risks to a project allows you to plan ways to
eliminate, minimize, or avoid risk. Its impossible to eliminate all risk, but if you cannot reduce
potential risk to an acceptable level, then you should avoid the project. The important point is the
planning process should begin before you bid the project. It may be too late to identify the risk
and properly address it after you have been awarded the contract.
21
Gregg Schoppman, NCS Radio interview, 10/13/10 (www.TedGarrison.com/ncs-radio/project-managementproductivity/improving-productivity/)
50
Risks occur as a continuous range from minimal to extreme. Many risks can be
eliminated by proper planning, such as long lead items being ordered in a timely fashion. Others
can be minimized through proper planning but still create exposure. For example, a complex
installation may take longer than estimated, therefore increasing the projects labor costs and
requiring acceleration in other areas, but this can be handled through a contingency that covers
the worst case. The real risk occurs when a problem has no remedy because this can cause severe
damage to the company.
The qualified or expert contractor has little risk related to technical issues because the
contractor knows what it is capable of doing and bids according to its capabilities. The real threat
is caused by nontechnical issues that the contractor does not control. An example is a client that
is insufficiently funded for a project, and after the contractor has spent a considerable amount of
its own money, it learns the client cannot make the necessary payments. Another example is a
client promising to provide the necessary permits and approvals by a certain date, but they do not
meet that schedule, and now the contractor will not be able to close in the building before cold
weather sets in, which would cause severe delays. While the contractor may get additional days
for the permit delay, they often do not get compensated for the shutdown that results over the
winter.
The need to avoid or at least minimize risks is obvious to most contractors. However,
maximizing opportunities is not as obvious to many contractors. Contractors need to focus on
maximizing value for their clients, which means exploring every opportunity to increase the
value for the client. It is more than just how to reduce construction costs; it is how the contractor
can build a better building that will either increase revenue or decrease operating costs. Today
there is a great deal of interest in sustainability, but reducing maintenance costs are just as
51
important. Potentially the greatest opportunity to provide value is in laying out the building in a
more efficient manner. On a factory project, one contractor used a lean-manufacturing expert to
increase the value for the client. After reviewing the clients existing factory, the lean consultant
advised the factory owner he did not need a new 100,000-square-foot factory. He reported they
only needed 90,000 square feet, and he could arrange the factory layout so they would be more
efficient going forward. The resulting construction and operational savings were substantial. The
above example is how contractors contribute outside of construction work to provide superior
value for their clients and at the same time become more profitable.
52
Sun Tzu Lesson #17

Be Prepared!
We must not rely on the likelihood of the enemy not coming, but on our own
readiness to meet him; not on the chance of his not attacking, but on the fact
that we have made our position invincible.
The Boy Scout motto is Be Prepared. Sun Tzu offers the same advice. Successful
people and companies do not rely on chance; they are prepared for all possibilities, so there are
few surprises. If all of that is true, then why are so many people unprepared?
The trap is caused by people thinking they are omniscient! Let us be honest, none of us is
all knowing. This false belief results in people making decisions. The problem with that is
information measurement theory argues that we should avoid making subjective decisions. The
resistance comes from the fact that many managers have been mistakenly taught it is their role
and responsibility to make decisions. Contrary to conventional wisdom, everyone should avoid
making subjective decisions because decision making increases risk.
I am not suggesting you do nothing. If you are a manager, it is your responsibility to be
properly prepared. I realize this may seem contradictory but its not. Let me explain. When
people know what to do, typically they do not need to make a decision to do the correct thing.
They just do! However, when you are faced with several options and you are trying to decide
which one to select, you are getting a message that says you are not sure what to do. Selecting
one is making a decision, which might be correct or it might not. The more decisions you make,
the greater the risk.
53
When you find yourself in this position, you have several options:
1. Find someone who knows what to do.
2. Do research to determine the right option.
3. If all else fails, you can experiment to determine the correct solution.
The last option is what innovation is all abouttrying new things. The key is to avoid making a
major commitment until the correct solution is determined, which is often the opposite of what
happens when someone makes a decision.
If you always want to be prepared with a minimum of effort, the best solution is to
surround yourself with the right people. Who are the right people? Typically they are the people
who must perform the work. Of course, this assumes that you are working with experienced and
qualified workers. However, too often we see a general contractor make a decision without
consulting the appropriate subcontractors. Expedience is often the justification, but if the
problem results from the wrong decision, any time saved in making a quick decision is lost.
Worse, more time and money might be lost. It is the proverbial penny wise, pound foolish
approach.
One myth that many managers believe is they are supposed to know all the answers and if
they do not, they will look weak. Obviously, good managers acquire a great deal of knowledge
and experience and, therefore, know many of the answers. However, their role is not to know all
the answers, but to know how to get the answer. The only thing that matters is getting the right
answer.
Managers need to rely on all their people. While doing research for my book on strategic
thinking, as reported earlier, the majority of innovative ideas came from nonmanagement
54
personnel. If you think about that, it makes sense because usually the people doing the work have
the best insights on how to improve the task.
In conclusion, the best way to be prepared is to involve the entire team in the planning
process! Involving many people gives different perspectives that might be overlooked without
the group effort. Further, it just makes sense because the group is always smarter than the
smartest person in the room.
55
Sun Tzu Lesson #18

Understand Your Situation
When the enemy is close at hand and remains quiet, he is relying on a
favorable position. When he challenges battle from afar, he wishes to lure you to
advance.
Not only armies rattle their sabers; companies do too.

A real estate development company was attempting to fight rumors that it was bankrupt.
Unfortunately they were having very little success in killing the false rumors. They hired a PR
firm to help. The PR firm simply suggested they announce a new project because companies that
are in financial trouble do not take on new projects. A press conference was held with a model of
the new hotel, and the rumors stopped.
Typically real estate developers announce their new projects as early as possible. Why?
They hope to discourage others from implementing their plans. For example, a community needs
another hotel, so the developer hopes by announcing his project, and by indicating the project is
far along, he hopes he might discourage others from continuing to pursue their project. In
essence, developers in this type of situation do not have a strong position because their product is
not unique. They rattle their sabers in an effort to scare away the competition.
In contrast, when a company has a strong position, it wants to keep its intent quiet. One
such example occurred when Disney wanted to build a theme park in Florida. It had several
people acquire property under names other than Disney. Disney did not want its name connected
to the property acquisition because it believed prices would rise and delays could occur. For
56
example, Disney was afraid if a property owner thought he had a key piece of property in the
theme park plans, he would hold out for an unrealistic price. That could have been expensive and
delayed the project. Disney did not have to worry about business competition, but it did need to
worry about rising land prices. For these reasons, Disney remained quiet.
While there are certainly no scientific rules about what people will do, as people are
highly unpredictable, Sun Tzus advice does offer some clues. If your competitor is quiet, he
might be planning something that could be a game changer, so be prepared. If your competitor is
rattling his saber, you should at least learn what he is planning, realizing he might be more
concerned about what you are doing.
In the end, your best defense is to constantly keep your ears to the ground by listening to
your vendors, subcontractors, and clients. Secrets are difficult to keep, so if you do your
homework, you might be able to avoid surprises.
57
Sun Tzu Lesson #19

Perception
Know the enemy and know yourself, and your victory will never be endangered;
know the weather and know the ground, and your victory will then be complete.
Chapter 10: Terrain
Leadership is not about command and control. It is about perception, or the ability to
understand the current situation, and the ability to align ones resources in the most effective
way. This means the leader must know himself, his adversary, the market conditions, and the
clients situation. The individual with the best perception of the situation has a competitive
advantage.
The first step in developing a value-based strategy is to identify the right prospects. If you
are not dealing with value-driven prospects, you will be wasting your time. In contrast, if you
focus on value-based clients, you will dramatically improve your percentage of successful
proposals. As mentioned earlier, one contractor I know gets 96 percent of his proposals accepted
because he ignores prospects that are focused on low price.
A common complaint from contractors is that prospects care only about price. This is not
true, but I certainly understand how some might have this impression. First, it is important to
understand that not all prospects are created equal. Thomas Winninger provides interesting
research. He reports that 27 percent of customers buy almost exclusively based on price. Another
17 percent are totally value driven and simply seek the best. It is the 56 percent in the middle that
58
are critical to the value-based contractor.22 They buy based on price when they do not understand
the value proposition, therefore, it is the contractors responsibility to ensure the prospect
understands the value proposition.
If the contractor does a poor job explaining value proposition, the middle 56 percent of
buyers will buy based on price. When you add these buyers to the 27 percent who buy only by
price and recognize that the remaining 17 percent who buy based on value are invisible, it does
give the impression that everyone cares only about price. However, if the contractor does a good
job explaining the value proposition to the middle group, they are converted to value buyers.
When you add this middle group of 56 percent to the 17 percent who always buy based on value,
you have 73 percent of buyers making decisions based on value. The 73 percent figure creates a
radically different perception from what most contractors have.
Therefore, if you want your company to be the leader, you need to understand what is
valuable to your prospects. Then you need to deliver a superior solution, in other words,
maximize the value they believe is important. Converting Sun Tzus weather and terrain into
business terms means understanding the market or, being more specific, your prospects needs
and whats most important to them.
Once you understand the market, you need to evaluate your companys capabilities. You
need to ask yourself, Of the needs the prospects have, which ones can we furnish where we
have a competitive advantage? As Sun Tzu said, Know yourself. It is not always easy to be
objective about oneself; therefore, it is suggested that you contact your past and current clients
and ask why they hired you. Ask what they liked about your project performance and how you
could have improved. Also, as we mentioned earlier, it would be a great idea to ask them what
22
Thomas Winninger, Price Wars, St. Thomas Press, 1994
59
you could do for them that you are not currently not doing. The better job you do aligning your
services with the needs of your clients, the more profitable your company will be. The key for
value-based contractors, as discussed several time in this book, is to expand their service beyond
pure construction activities.
Once you have identified where your strengths are, you need to put that into context with
your competition. Unfortunately too often contractors do not assess the strengths and weaknesses
of their competition. Even if you do something very well, if your competitor is better at that
activity, you will still be forced to compete on price. As stated earlier in the book, you want to
provide a unique service or a service where you are substantially better than any competition.
Perception is about accurately understanding the current conditions. Therefore, the
perceptive business leader understands the marketplace then develops a strategy based around
the companys strengths while considering the companys competition. With this information,
the leader can align the company in its most profitable way.
60
Sun Tzu Lesson #20

Understanding the Competition
It must be obtained from the men who know the enemy situation.
Chapter 13: Employment of Secret Agents
In the previous lesson, Sun Tzu discussed the importance of knowing the enemy or, in
our case, the competition. Understanding the competition can be challenging, but it is something
that must be done. Obviously in business we are not allowed to have spies in the normal sense,
but we can still obtain intelligence about our competitors.
Your best sources of information are from people who are working with the competition,
namely, designers, subcontractors, and vendors. You should not ask anyone to provide
information that would be considered confidential, but a lot can be learned from asking general
questions about their projects. How do they manage the job? What seems to be most important to
them?
Talking to buyers can be more challenging. You cannot simply ask them to tell you what
they like and dislike about your competition. However, you can obtain a great deal of
information by asking questions such as What services would like that are not receiving?
Obviously anything they tell you your competitor is not providing is something you can focus on
supplying.
You can look for articles about the competitor that might provide insight. By examining
the types of projects your competitor chases, you might begin to get some idea of its strategy.
61
Another method is to hire a past employee of your competitor. That individual might be able to
help you analyze the material you do find and provide greater insight.
In the end, there is no perfect way to learn everything about a competitor, but it is
something you should track because the better you understand your competition, the better you
will be prepared to outthink them.
62
Conclusion
Having written Strategic Planning for Contractors, I understand the importance of

strategic planning. Unfortunately one common mistake I observe in contractors is they want to
get into the planning stage too quickly. In reality the term strategic planning is a misnomer
because it is less about planning than it is about thinking. Failure to invest in the thinking process
results in plans that are merely extensions of what the company has been doing in the past. There
is no real analysis of whats working and whats not, nor do they attempt to determine what
should be changed or what new opportunities they should chase. Peter Drucker wrote, Strategic
planning is not a box of tricks, a bundle of techniques. It is analytical thinking and commitment
of resources to action.23
Sun Tzus lessons in this book help the reader to think about what is important in
developing a strategy. However, another critical factor in creating effective strategies is having a
system whether dealing with the corporate strategy, a project strategy, or even problem solving.
In my book Strategic Thinking, I identify the following a five-step system:
1. Get the right people involved.
2. Define the problem.
3. Develop possible solutions.
4. Identify the right solution.
5. Execute the strategy.
The problem is that too many business executives are trapped, fighting the daily battles.
They do not have time to think strategically about their companies. Peter Drucker wrote, Unless
23
Peter Drucker, The Daily Drucker, Harper Business, 2004, 342
63
the short-range plansthat is, the decisions on the here and noware integrated into one unified
plan of action, they will be expedient, guess, and misdirection.24 He further added, Long-range
planning should prevent managers from uncritically extending present trends into the future,
from assuming that todays products, services, markets, and technologies of tomorrow, and
above all, from dedicating their resources and energies to the defense of yesterday.25
An important variation of the original theme is that strategy is just the art of the generals.
In the days of Sun Tzu, the general often wanted to keep his soldiers in the dark with regard to
strategy to prevent mutiny or rebellion. He restricted their knowledge to just what they needed to
know to do the specific task assigned. However, in todays complex world, it is critical that
everyone be involved in the strategic aspects of the company. Therefore, this book is for
everyone concerned about the performance and profitability of the company.
It is critical that everyone understands that unless each individuals activities are
contributing value, that task or individuals job is at risk. This requires a fundamental change in
the way CEOs and management think about the workforce. Employees are not an expense. They
are a resource that delivers value, and their activities should measure the value delivered. The
question that should be asked about each employee is this: Does that employee deliver more
value than her cost? If the answer is no, ask this: Why does that position exist?
When looking at a business from a strategic perspective, it becomes evident that a
business is like a three-legged stool. One leg represents the client; another leg, the employees;
and the final leg, the company. If any one of the three legs fails, the stool falls over. Obviously if
the business does not take care of its clients needs, then it will have no clients and the business
will fail. If the business does not take care of the employees, then they will vote with their feet
24
25
ibid., 343
ibid.
64
and leave. In part, this explains why the construction industry has trouble finding enough
qualified and skilled workers and managers. Keep in mind it does not matter what management
thinks about the quality of the job; the workers opinion is the one that matters. They compare
their other opportunities against their opportunity in construction and draw their own
conclusions. Finally if the company does not take care of itself, such as make sufficient profit,
then it will not survive.
Strategies for Contractors from Sun Tzu is designed to help contractors obtain a more
balanced and profitable approach to business. The other two books mentioned in the conclusion
can also provide guidance. You can find both of those books at:
http://www.tedgarrison.com/store/books/
65
About the Author

Ted Garrison
Certified Speaking Professional
Catalyst for Change & Construction Industry Visionary

Consultant-Author-Speaker
Ted Garrison, CSP, has 25 years management experience constructing 10 million square feet of
commercial buildings. Since 1996, Ted has served the construction industry as a consultant, author, and
speaker on construction management topics.
In addition to his civil engineering degree and BA from Rutgers University, he has practical experience
working in framing, trim, and survey crews. Most of his experience has been working with general
contractors and developers in project management or senior executive positions in the development and
construction of hotels, office buildings and parks, storage facilities, and public buildings. During his last
construction project, he was the director of construction on the Pennsylvania Convention Center in
Philadelphia; it was Pennsylvanias largest nonhighway public works project in history.
He is author of Strategic Planning for Contractors, Strategic Thinking, and coauthor of five books on
marketing, customer service, and leadership as well as numerous construction industry magazine articles.
As the former host of the Internet radio program New Construction Strategies (www.NCS30.com), he
conducted hundreds of interviews on current industry issues with leading industry experts, which gave
him fresh insights into the industry.
He averages more than fifty presentations per year to national audiences including AIA, ABC, AGC,
MCAA, CFMA, CMAA, DBIA, IEC, NECA, SMACNA, NFSA, World of Concrete, and others. He has
conducted seminars in Dubai, Abu Dhabi, Saudi Arabia, Russia, Canada, the Bahamas, and Australia. He
is a member of ABC, AGC, and DBIA.
Ted GarrisonNew Construction Strategies

800-861-0874
Ted@TedGarrison.com
www.TedGarrison.com
www.NCS30.com
follow on twitter @TedGarrison
66

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Acknowledgment

Strategies for Contractors from Sun Tzu

Lesson #1: The Importance of a Superior Strategy

Lesson #2: The Offensive Strategy

Lesson #3: Knowledge & Experience Critical to Planning

Lesson #4: The Strategy of Massing or Focus

Lesson #5: The Strategy of Flexibility

Lesson #6: The Strategy of Opportunity

Lesson #7: Know Yourself

Lesson #8: Understand Your Situation

Lesson #9: Strategy Requires Commitment

Lesson #10: Strategy Is About Picking the Right Battles

Lesson #11: Planning Dictates Who Will Win

Lesson #12: Make Speed Your Ally

Lesson #13: Defeat Your Opponent at Its Strengths

Lesson #14: Be Careful of Frontal Attack Against Entrenched Competition

Lesson #15: Seize on Opportunities

Lesson #16: Planning

Lesson #17: Be Prepared

Lesson #18: Understand Your Situation

Lesson #19: Perception

Lesson #20: Understand the Competition

About the Author

Dennis Bausman, NCS Radio interview, 9/4/07 (www.TedGarrison.com/ncs-radio/strategy-change/why-you-needa-business-strategy/)

Robert Greene, The 33 Strategies of War, Penguin Books, 2006, xvi

Sun Tzu, The Art of War, Chapter 3

Sun Tzu Lesson #1

As indicated in the introduction, contractors need to avoid competing on price as much as

Do what they do not do.

Do what they do, but do it significantly better.

The solution is to do something different. To provide services your competitors do not

Robert McCoole, NCS Radio Interview, 9/21/11 (www.tedgarrison.com/ncs-radio-clients-delivery-methods/)

Sun Tzu Lesson #2

Dwight Eisenhower, www.chacha.com

Sun Tzu Lesson #3

Sun Tzu Lesson #4

experience by focusing on certain types of buildings, not by doing a little of everything. In

Sun Tzu Lesson #5

Sun Tzu Lesson #6

Often value-based contractors identify their uniqueness as their ability to manage

Sun Tzu Lesson #7

Why did you hire us in the past?

Why are you considering hiring us in the future?

What are your concerns about using us?

Sun Tzu Lesson #8

These five constant factors should be familiar to every general. He

1. What are you selling? (Hint: It better not be construction services.)

Guiding Principles or Ethics

Sun Tzu Lesson #9

Sun Tzu Lesson #10

Sun Tzu Lesson #11

Sun Tzu Lesson #12

Speed is an ally. Learn to use it wisely!

Sun Tzu Lesson #13

Sun Tzu Lesson #14