b'Business Managementto recruit and retain human capital to succeed in themarkets in which they work and strategically diversify rapidly changing marketplace. into expanding markets to successfully ride the tides This is the first in a series of articles on humanof growing markets.capital in Midwest Roofer, beginning from a wideStrategic diversification happens when you redirect viewpoint to address the critical need to have a well- your sales and marketing efforts to align with growing defined strategy in place. In this article, we answermarkets and move away from those in decline. For the questions: example,ITREconomicsITRTrendReportfor What is strategy? November 2019 indicated that both education and How do you evaluate the potential for success? hospital spending will experience accelerating growth in 2020, while office and warehouse construction Why does strategy matter in a discussion onspendingisforecastedtosignificantlyslow. (3)human capital? Companiescantakethisdataandstrategically diversify toward education and hospital markets, A Well-defined Strategy Is the Starting Point foraway from those on a decline. Diversifying your All Value Protection markets can help stabilize your company so that Baker Tilly has developed a performance model thatwhen one market turns, you have others to rely on.providesaframeworkforbest-in-classbusinessBuilding a Framework for Strategic Growthpractices(seeFigure1).Atthecenterofthe performance model is strategy. In an industry thatImproving profitability starts with a clear picture of is rapidly changing due to new technologies, ownerwhat you want your company to be and answering demands, tighter project timelines, and workforcethese key questions:shortages, strategy addresses how you will succeed.Which markets or service line offerings are we Having clearly defined strategic initiatives allowspursuing?your company to be successful in the competitiveWhich customers do we want (or not want)?marketplace. Without defined strategic goals, it is impossible to build an organizational structure andWhat advantages do we bring to this market?hire or train employees to meet the organizationsIs growth focused on the top line or bottom line?changing needs.Answering those questions can give you a better idea By looking at new markets and diversifying their portfolios, roofing companies can better prepareAnswering those themselvesforaneconomicdownturn.Growth opportunities are unique to each company and mayquestions can give include any of the following: you a better idea Revenue growth, of what kind of growth you Geographic expansion, want to see in the future New service lines, and where you want your Merger or acquisition, and company to be before an Bottom- versus top-line growth. economic downturn hitsEconomic Indicators and Construction OutlookEconomistsmonitormanydifferenteconomicof what kind of growth you want to see in the future indicatorswhenpreparingoutlooks(consumerand where you want your company to be before an price index, interest rates, unemployment, etc.). Alleconomic downturn hits. When you think about your market segments experience a continuous cycle ofcompanys growth plan, making a strategy framework expansion and retraction, the depth and length ofcan be a helpful way to keep your vision, mission, and which signal a recession. values at the forefront of your mind while including all Contractors should watch changing trends in theContinued on page 22www.mrca.orgMidwest Roofer 21'