Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Advantage Rok

On the face of it, Rok’s figures this week don’t contain a lot of cheer - turnover down 33 per cent and profits 47 per cent. Ouch. But there’s two things to pick out of what might seem a terrible mess.

There’s a salutary tale – CEO Garvis Snook has said that the severity of the recession “took them by surprise”. This should serve as a warning to companies of all shapes and sizes that keeping a careful eye on the future is seriously important. Could Rok have avoided some of the £1m of restructuring costs they incurred in the first half of this year if they had been a little more farsighted in 2008? Of course. They will have spent money, and started projects that they now regret, and while such regrets are likely to be felt all over the industry, if the amounts concerned were smaller, then so would be the regrets.

Marketing teams should be your eyes and ears. They should be always thinking about next year – collecting information about the likely shape of the market and feeding it in to the executive decision making process. If your Marketing Team isn’t doing this, then get a new one.

Rok’s story also gives us a positive lesson about how to handle commercial difficulty. Chairman Stephen Pettit says that Rok will “focus on our positions of strength and advantage”. This is a good company, which has achieved strong competitive advantage in a particular market sector, now focussing on that sector at the expense of others in response to tough trading.

What’s competitive advantage? It’s the ability to make more money through efficient working and/or the ability to command a premium price while delivering better customer satisfaction than your competitors, and this is what Rok do in the social housing sector. So their decision to focus on that sector, turning away less profitable work in others, is a sensible one.

When times are tough, competitive advantage will keep you alive. Have you got any?

Ross Sturley is principal of Chart Lane (www.chartlane.co.uk), a strategic marketing and communications consultancy, and a believer in the power of long-term strategic thinking. He is a committee member for the Chartered Institute of Marketing Construction Industry Group (CIMCIG – www.cimcig.org), whose conference in December – Strategy 2010 – preparing for the upturn – may be of interest to anyone who’s got this far in the article.