How can construction companies improve their regional operating capabilities?

The construction industry is an industry that relies on fixed asset investment and is a very typical "demand side" dependent industry. Against the background of the current slowdown in the growth rate of domestic infrastructure investment, construction companies can only build a solid foundation for corporate development through a series of measures such as expanding market areas, expanding corporate value chains, and consolidating their own core capabilities. In this process, enterprises blindly adopt the "big and comprehensive" development model in order to pursue an increase in scale, leading to frequent phenomena of "clustering" and "following the trend".

After studying the excellent regional management practices of construction companies, Da Lao Service can find that in the process of outward expansion, companies usually present "opportunistic scattered operations - regional operations with disorderly competition - orderly planning "Regional Layout" three-stage development stage, that is, from the initial project department as the implementation and management body due to the great opportunities and instability of the project, to the scattered business outlets gradually connecting the dots into a line, from the line to In this way, regional companies will form cross-operations in one region after another, and finally the regional companies will form a reasonable and efficient regional management system. Therefore, in terms of expanding market areas, we can only proceed one step at a time, adhere to the principle of making progress while maintaining stability, have the local market as the basis, scientifically select the layout areas, and build a reasonable and complete regional organization system.

— 1 —

Develop practical regional layout strategies

Construction companies have not only formed a national awareness of development, but also formed a strategic plan for economic development. ***Knowledge of area travel. The trend of concentration in eastern, southern, coastal areas and urban agglomerations is very significant. These economically developed areas have high market economic vitality, great market potential, and high demand in the housing construction and infrastructure fields, which can bring more development opportunities to construction companies. Large-scale construction companies generally adopt a convergent national regional layout strategy:

The headquarters of China Construction Third Engineering Bureau No. 1 Company is located in Wuhan. Its business covers 30 provinces, autonomous regions and municipalities in six major regions across the country, and it has regional branches: South China, East China, Central South, North, West, Shenzhen and Malaysia branches. Revenue mainly comes from the South China region, East China region and Central China region, with the South China region accounting for the highest proportion.

Shanghai Construction Engineering is headquartered in Shanghai. It has developed from a layout with Shanghai as the main market to a layout in the "Yangtze River Delta", "Pearl River Delta" and "Bohai Rim", and then to the Yangtze River Delta region, as well as the South China region and Beijing. The "1 5 X" national layout strategy consists of the Tianjin-Hebei region, the Central Plains region, the Northeast region and several other key cities.

Suzhong Construction is headquartered in Nantong, Jiangsu, with its old bases in the northwest and northeast, and its business is relatively stable. At present, a nationwide layout strategy is adopted to develop the overall region from north to south, and a southern regional company and a Guangdong regional company have been established.

When choosing a strategic development area, companies must not only judge the region’s market capacity, competition intensity, local protectionism and other factors, but also fully evaluate the company’s own capabilities. If you find that your business structure cannot obtain rapid development opportunities in China, you can consider overseas markets as appropriate based on the actual situation of the company.

— 2 —

Build an effective market organization system

The development of regional markets for construction companies is mostly the result of the docking of high-end resources that team members are responsible for. Project, in this case, the vitality of the enterprise cannot be fully released, and the degree of marketization cannot be rapidly improved. Therefore, construction companies should build a reasonable market organization system as the basis for efficient operations.

1. Diamond market organization system

The diamond market organization system includes the information layer, business layer and decision-making layer from bottom to top. The information layer is responsible for obtaining and collecting project information in the market. It is based on the reasonable layout of the regional business network, deepening and broadening, and capturing market project information to the greatest extent. On the other hand, by appropriately integrating the operating networks of different business lines, we can reduce the waste of market resources and avoid the duplication of operating outlets.

Under the diamond-shaped market organization system, enterprises need to continuously strengthen the comprehensive quality and capabilities of market front-end personnel and fully tap their sensitivity and tracking capabilities for market information: the business layer is responsible for the distribution and preliminary screening of information; market front-end personnel will obtain The information is transmitted to business units in different lines according to specific systems, and then the business layer performs preliminary screening; the decision-making layer is responsible for making decisions and project approval based on the market information reported by each business layer.

2. Three-dimensional marketing organization system

The core of the three-dimensional marketing organization system is the three operations of front-end operation and full-process operation.

Front-end operations focus on high-end operations and ordinary operations. High-end operations are carried out from the top down, mainly relying on the leadership of construction companies to sign framework agreements with governments and major customers to obtain relevant information in advance. High-end operation is the most effective market operation method, which can avoid entering the fierce public operation stage. Lower-level cooperation units must promptly track and implement the framework agreement to ensure that the agreement is converted into projects and contracts. Ordinary operations are conducted from the bottom up. Project information is widely obtained through the market information acquisition system. Contracts are obtained after full competition in the open market by relying on the competitiveness of the enterprise in terms of capital, cost, technology, brand, etc. Subordinate business units must Adhere to the principle of “spread the net widely and catch more fish” and seize every potential project opportunity.

The three operations of the whole process have different business concerns, and the corresponding responsible entities are also inconsistent. The core entities of primary operations are organized in the market system, and marketing department personnel of units at all levels extensively search for project opportunities, select advantageous bidding projects, and negotiate business contracts; the entities responsible for secondary operations and tertiary operations are in the project department, and can only save costs through management improvements. Business management expands sources.

3. Integrated/substantial/localized market organization system

With the improvement of market operation needs, market operation organizations represented by single regional companies are increasingly unable to To meet the current market operation needs, the positioning of regional companies in the future will show a transition trend from a single market development subject to a multi-functional organization. For example, most regional companies are given investment and construction functions. For example, the regional companies of China Construction and China Railway are As the “second brand” of an investment company, it can be seen that investment drives construction share has become more and more common in the construction industry, and relying on capital to obtain projects has gradually become one of the core means for the development of construction companies. In addition, regional market operations can no longer stop at the level of obtaining market information, but also need to deeply explore the needs of owners and have a deeper understanding of the project.

Contract performance and completed delivery in project unit projects are the best endorsement for construction companies to develop new markets, new customers, and new projects. Secondary cooperation with old customers also depends on the quality of early project performance. Physical operations can better form integration, strengthen connections with local areas, provide more local contributions, and gain more support.

Usually, regional companies serve as an extension of the functions of the headquarters marketing department and are mainly responsible for project performance and market operation and development. However, the actual situation is that regional companies are less localized and most of their staff are directly dispatched by the headquarters. They have little understanding of the region. Poor understanding and lack of solid social resources. In the future, regional companies must strengthen localization, promote localization of personnel, and strengthen ties with local areas.

— 3 —

Accelerate the construction of territorial legal persons

A territorial legal person refers to an enterprise with independent legal person status registered and established by a regional company in the territory. Speed ??up the construction of territorial legal persons. It has many benefits for enterprises to develop in the region: First, it can enhance the recognition of the enterprise by local governments, universities, and social organizations. It has a certain symbolic significance to participate in bidding and project construction as a "local enterprise" rather than a "foreign enterprise". Second, it can deepen the sense of belonging of localized employees to the enterprise, allowing regional companies and management to completely abandon the ideological dependence of each company on the group headquarters under the divisional organizational model; the local legal person expresses the company's long-term roots in the local area. Development attitudes and trends, the stability of employees' work has been further guaranteed. Third, it can solve the thorny problems faced by many regional companies, such as the review of intermediate and senior professional titles, evidence collection for safety category three personnel, etc.

In order to do a good job in the construction of local legal persons, construction companies must first do a good job in human resource planning and talent reserve work. The human resources department of the local legal person must proactively plan the company's future human resource needs, continuously expand the talent "reservoir" of the local legal person through recruitment, internal training and other means, and fully ensure that the quantity, quality and structure of talents can keep pace with the company's future development and development. Match the hard personnel indicators required for qualification upgrade. The second is to do a good job in enterprise qualification upgrading and maintenance management. According to regional market conditions and future development plans, corresponding qualifications should be completed in a timely manner and follow-up qualification management should be strengthened. Enterprise leaders should attach great importance to it ideologically and set up special qualification management posts or working groups to clearly define responsibilities.

— 4 —

Strengthen headquarters management and control functions

Construction company headquarters should strengthen macro-control and issue guidance on the group’s promotion of talent development in regional companies and local legal persons. and implementation details to provide clear direction for the regional layout of human resources management. By selecting well-developed and representative regional companies in each region, summarizing the work experience and achievements in localized human resources management, a set of human resources management models can be replicated and promoted in various regions across the country. The headquarters should strengthen the coordination and linkage between sub-groups in the same region, avoid fighting each other, and achieve a good situation of maximum sharing of advantageous resources, effective information exchange, and reasonable flow and distribution of high-end talents.

Regional operations are one of the effective ways for construction companies to achieve scale growth in the future and are an effective carrier to achieve “separation of jobs and jobs”. Enterprises should be based on the needs of development strategy and market competition, and think about how to solve the problems of dispersed operating resources and insufficient organizational coordination in the short and medium term, so as to lay a solid foundation for the company's long-term development.