Episode 437: What the P-38 Fighter Plane Can Teach You About Business Strategy

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Hey, Todd DeWalt here from constructionleadingedge.com. Thanks for listening to the Construction Leading Edge podcast. And let me start by asking you a few questions, four questions for you. How clear are you on your strategy for the next 12 months? Whether you’re a business owner or an employee, maybe you’re a college student, wherever you’re at, how clear are you on your strategy to be successful over the next 12 months? And then what would it be like if you had a clear strategy for the next year to have

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detailed performance specifications for your business or your job, and then know what you need to do to make that happen. Number three, what if you had clarity on what your business looks like in the future and the types of projects you want to focus on, what your role in the business looks like, if you’re an employee, what if you had clarity on what your role looks like? And then the fourth question is, what would it do for you and if you have a team, what would it for your team if you could share your vision

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and strategy with them. If you have a team, what would it do for them? For them to know exactly what your vision and strategy is for the future. That’s what we’re to talk about today. Let me tell you a story about something that happened about 80 years ago. Now it was 1937 and the U S army air core sent out what they called the U S army air core circular proposal X dash six zero eight.

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They sent this out to the leading aircraft manufacturers for the design and manufacture of a new pursuit aircraft. would be a radical departure for existing fighters and required the following specifications. Okay. This is what they did. They created these detailed performance specifications that included a few key things like it needed to be able to fly 360 miles per hour airspeed at 20,000 feet elevation. It needed.

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to be able to fly at 290 miles per hour airspeed at sea level. It had to sustain full power for one hour at 20,000 feet. It needed to be able to climb to 20,000 feet altitude in six minutes. And it needed to be able to take off and land within a 2,200 foot runway while clearing a 50 foot obstacle. These were the detailed specifications that were in this proposal. And this kicked off a design competition for a plane

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that ultimately changed the course of World War II. And there are lots of business lessons. We’re going to talk about what this plane is, what it was, the impact it had, and more specifically, what are some of the business applications, some of the lessons we can learn from this story. So this circular went out to a few different airplane manufacturers back in 1937.

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And ultimately it culminated in the Lockheed P-38 Lightning. was the plane. And according to the interwebs, here’s what it says. Lockheed’s P-38 Lightning is in a league of its own as one of the most influential fighters during World War II. The quote, fork-tailed devil flew more than 130,000 missions and theaters across the globe and was a crucial weapon in the American

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Arsenal. Used in aerial reconnaissance role, the P-38 would account for 90 % of the aerial film captured over Europe. Over 10,000 P-38s were built and it was the preferred aircraft for America’s two top aces. First gentleman’s name is Dick Bong. It’s his real name. And he had over 40 aerial victories and Tommy Maguire, also a P-38 pilot, was credited with 38 victories. Some historians

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would even say that the P-38 Lightning tipped the balance of power in the war against Japan in the Pacific. And it all started with that circular. So let’s talk about some of the lessons that we can take away from the story of the P-38 Lightning. So the first lesson is that the design started with performance specifications. The Army Air Corps said, this is what this plane needs to be able to do.

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It established, it answered the question, what can it do? Specifically airspeed at 20,000 feet, airspeed at sea level, had to be able to climb to 20,000 feet in six minutes and it had to be able to take off and land on a runway of certain length. Those were the performance specifications. There are a few other things they specified, but this was really pushing the envelope because at that time, no plane could fly 360 miles per hour.

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The lesson here is that the specifications or what you might call constraints, they put constraints on this plane. had detailed performance specifications. They drove innovation. The lesson here is they created detailed specifications, detailed performance specifications that drove innovation. They put constraints on this plane. Some people think constraints are bad, but constraints actually drive innovation.

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So the air core specified what they wanted it to be able to do, how it needed to be able to perform. And then they left up, left the, the details up to the aircraft manufacturers. We’ll talk some more about that in a minute. Here’s the business application. Number one, if you are a business owner, you get to create the performance specifications for your business. As a business owner, you get to create.

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the performance specifications for your business. All right. As I like to say, somebody is going to determine how successful your business is. Somebody’s going to determine how much income you earn. Someone will determine how much wealth you create. Someone will determine what your lifestyle looks like. I say it might as well be you. Somebody is going to determine the performance of your business. Maybe it’s, you might think it’s.

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the economy or customers or your subcontractors or whoever’s in the White House or whoever’s at the helm of the Fed. But the truth is you get to determine your lifestyle. You are in the driver’s seat. So you get to answer the question that the Army Air Corps asked, which was, what do we want this thing to do? When you look at your business, you need to ask and you get to ask, what do I want this thing to do?

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What do I want it to create? What are the performance specifications for my business? So at its most basic form, if we boil it down, you need to, and you get to answer the question, what do you want? What do I want? And this reminds me of a story. I talked to a guy sometime in the last year and he was uh a painter. He was a painting contractor. And I was asking him what some of the things

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were that he wanted to change about his business. And he said, well, you know, I’m I’m always the last guy in and I get delayed by everybody else. And I’m the last guy into the job. I’m the last guy to get paid bitching and moaning about this sort of stuff. And I said, what do you expect? You’re a painter. If you want to be the first guy into a project, you probably don’t want to be a painter because the painter is the last guy in. So it had never occurred to him that he had the choice to change his business.

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He just felt like he was stuck somehow. The universe made him a painter and there’s nothing he could do about it, which is ridiculous. So you get to ask, what do you want? What does your lifestyle look like? What does your personal income look like? What type of clients do you want to work with? What type of projects do you want to do? Where in the world do you want to operate? Where in the country do you want to operate? What type of people?

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Do you want to work with a type of clients? Do you want to interact with? And then what parts of the business do you want to be involved with? Do you want to wear all the hats in the business? If you’re like a lot of the clients we work with, you’re a visionary, you have big picture goals, but you feel stuck in day-to-day operations, stuck doing things that you hate, you suck at, like estimating or bookkeeping or keeping up with all of the details. So what parts?

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What do you want? What do you want your role to look like? What do you want your lifestyle to look like? What do you want your business to look like? This is what I call right to left thinking. Okay, this is right to left thinking. The first question you answer in right to left thinking is what do you want? You go out to the right side of the page and you say, what do I want my business to look like? What do I want my lifestyle to look like? What do I want my income to look like?

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What do I want my role in the business to look like? That’s basically what the U S army air court did. they embraced right to left thinking. They went out to the right side of the page and they said, we need a plane that will do these things. These are the performance specifications. It needs to be capable of a few things. And there was a strategy behind that, but they clearly defined what the performance specifications were and you can do the same thing.

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for your business. somebody’s going to determine how successful you are. I say it might as well be you. So the first lesson is that you get to establish the performance specifications of your business. That’s where it all starts. In fact, that’s how successful businesses grow. That’s how they do it by having a clearly defined

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vision and a clearly defined strategy to get there. And then they embrace right to left thinking and they work backwards and ask the question, they start with the question, what do I want? And then they ask the question, what would it take to make that happen? And they work backwards or they work from right to left to make it happen. All right. Lesson number two is that the visionaries at the Army Air Corps clearly defined the what and then they

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left the how up to the people with more expertise. Okay. The visionaries, let’s call them visionaries because they clearly articulated the vision for this plane. Visionaries at the army air core clearly articulated the what and then they left the how up to the people with more expertise. Their process went something like this. Step one, they developed the strategy to win. They figured out, they looked

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into the future, which we’ll talk about that in a few minutes. And they said, here’s our strategy to win. We’re going to need a plane that is a high speed, high altitude interceptor in order to win the war. was step one. That was their strategy that they needed to win. Step two, they clearly articulated the vision for this plane and what it should be capable of. The performance specs.

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the speed, the altitude, the takeoff distance, those sorts of things. They clearly articulated the vision for the plane and what it should be capable of. Clearly articulated the performance specs that would allow it to execute the strategy that they developed. And then step three, they engaged the people who would design and build the planes to take care of the details. This was a design competition with the companies who designed and built the planes. These are the people who…

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knew all of the ins and outs and the nuts and the bolts of designing and manufacturing planes. So they engaged them and they left the how up to those experts. In other words, they clearly articulated the performance specifications and they delegated results. This is probably similar in the construction world to a design build approach. Instead of a design bid build approach, it’s a design build.

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approach. So what that looks like on a commercial construction project, the way I used to do it, we would make the MEPFP package, mechanical, electrical, fire protection, plumbing packages, design build. So we would create performance specifications for the HVAC system, for example, and then leave it up to those design build contractors to work out all of the details. what these guys did,

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they delegated results. Hey, it’s Todd here and we’ll get back to the episode in just a minute. But if you’re like most builders and remodelers I talk to, maybe your business feels chaotic. You’re working too many hours, you’re not making as much money as you should, and it seems like every problem lands in your lap and too much depends on you. That sound familiar? You may be thinking, what you need to do is drill a series of one inch or one and a quarter inch diameter holes around the perimeter of your office, insert sticks of dynamite and blow the whole thing up and then start over.

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Well, here’s the good news. You’re probably just two or three simple adjustments away from a completely different business. This is what I’ve found. It’s not about working harder. It’s not about selling more jobs. You don’t need to fire everybody. You don’t need to do a complete overhaul. There are not a thousand things you need to fix and you don’t need dynamites. You just need a few moves that give you maximum results with minimum effort. And that’s what I wanna help you with. I wanna help you uncover those things on a free business evaluation call.

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with our team. Here’s what we’re gonna do on your business evaluation call. We’ll uncover the hidden profit that’s already in your business. We’ll outline the two or three simple adjustments that are gonna give you the most bang for your buck. We’ll map out a simple plan so you can have more profits, more control, and ultimately have a business that runs without you. And if it makes sense, we’ll talk about how we can work together to help you make that happen. Here’s the deal. We only offer a few of these calls a week and not everyone qualifies. So if you have a wave of work,

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coming at you or you’re planning to grow, now is the time to make those adjustments. Click the link in the show notes right now to schedule your free business evaluation call. Here’s another way to look at what their process was. Step one, they came up with the why. Why do we need to build this plane? How does this plane help achieve the strategy? Why do we need to build it? So step one was the why. Step two was the what. What?

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does it need to be able to do? These were the performance specifications. And then step three, the how, how do we build it? How do we manufacture it? How do we test it? This was the design and the manufacturer of the plane, which they left up to the people who do that stuff every day. Business application goes something like this, that the visionary’s job in a company is to understand the strategy, okay? Somebody in every organization,

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needs to look into the future, see the opportunities that are coming, or maybe to see the problems that are coming or the problems that need to be solved for, and to understand the strategy and have a clear vision of where the company needs to go and develop a strategy to get there. Number two, that visionary then shares the vision of what the company needs to be able to do or what a

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process or a system needs to be able to do or what a specific role in the company needs to be able to do. In other words, they establish the what, the performance specifications of maybe the entire business or some part of the business. Then step three, they delegate results to the team. They delegate results to the people who will be developing the process, who will be doing the work. So step one, develop the strategy and understand the strategy, create the vision.

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Step two, share the vision and clearly articulate the what needs to happen in order to execute that vision. And step three, delegate results to the team. So here’s what that looks like. If you’re wondering, all right, that’s interesting, but what does that look like in a construction business? Let me give you a couple of examples. Steve, we’ll call him as an owner of a business and his business focuses on high-end custom homes and remodels. The type of work really doesn’t matter, but just for the sake of this example,

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Steve owns a construction business that focuses on high-end custom homes and remodels. So Steve needed to develop the strategy. All right. So here’s the strategy. Steve recognizes that there’s uh a shift coming in the custom home and the remodeling market. He believes that customers expect a great experience throughout the process, not just a quality product, with a subpar experience that they’re willing to tolerate. Right.

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He can see it coming in other parts, other industries that customers are no longer just satisfied with a something that goes like, well, we built our home, the house is great, but the experience was a nightmare. There’s a, he sees a trend coming that customers want a good experience and a good product. They want to enjoy the process, not just have to endure the process. So that’s the strategy.

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We need to be able to provide a great experience. need to differentiate ourselves from the competition. These other guys who were the chuck in a truck, the guys who were just focused on building, but they’re not focused on the experience. They’re going to get left behind. There’s a disruption coming. That’s, that’s the strategy. Then Steve says, okay, what’s, what’s the what? What, how do we develop the what? So Steve does some root cause analysis.

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and looks into what’s affecting the customer experience and comes to the conclusion that most of the problems can be traced back to one thing. When he does a root cause analysis of what is frustrating customers, what’s causing delays, what’s causing confusion, what’s causing stress for the client during the build process, he realizes that it comes back to one thing and that one thing is

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a good handoff. He came to the conclusion that a solid, a full 80%, maybe more of the problems that show up on job sites, missed expectations, uh stressful situations for clients, profit bleeds for him can be traced back to the handoff. And he realizes the key to solving a lot of his problems is to have a good handoff from the office to the field. This is a disciplined.

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When he looks at the industry, he realizes, okay, these, companies that are scaling, they’re growing, they’re providing a great experience. They’re not just a great construction company, but they’re a great pre-construction company. There’s an emphasis on pre-construction. And speaking of which, I interviewed a gentleman named Wes Palmisano a few episodes back, and he talked about…

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One of the keys to growing his company to $250 million was focusing on pre-construction. That was episode 309. Go check episode 309 out. So back to our example, Steve realizes, all right, the key, the shift is we need to provide a great experience for our customer. When we do that, we’re going to differentiate ourselves from the competition and we’ll dominate our market. So.

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We need a discipline pre-construction process. And what we call this is nailing the handoff. So Steve establishes the performance specifications for a good handoff that include four things. Number one, all design and all selections are made before the handoff. And if you’re thinking that’s crazy, that’s impossible. You can’t make all selections for handoff. answer is yes, you can. Number two,

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The second performance specification is that the field team has everything they need to finish the job instead of just enough to start. A lot of the problems on your job sites can be traced back to, well, we did just enough to start. The field team didn’t have everything they need to finish. They had just enough to start. So the second performance spec is field team has everything they need to finish. Specification number three, there’s clear accountability for the handoff.

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There’s one person who is accountable for nailing the handoff. And then number four, it’s documented. Our pre-construction process is documented and the team is bought into it. And in parentheses in the team will actually follow it. So those performance specifications again, number one, all design and selections are complete and made before the handoff. Number two, the field team has everything they need to finish instead of just enough to start. Number three, there’s one person who is accountable.

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for the handoff and number four, this process is documented and the team is bought into it. Then Steve goes to the next step, which is the how. How do we do this? And this is where you get your team involved. Very common mistake is to go into the office, hammer out this process or schedule or have stacks of three ring binders with SOPs and then go try to gently cram them down the throats of your team and then be disappointed at why they don’t.

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how little they implement and how much they resist it. So here is what you would need to do. Here’s what actually works. The how of nailing the handoff is get your team involved. Outline the specifications for your team, particularly why you’re doing this. Maybe even get them to answer the question, hey, what’s in it for you? How is this going to make your life easier when we nail the handoff? And then you work with your team to develop your…

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nail the handoff process to make it happen. And this is what we do with our clients. We walk our clients through our nail the handoff framework to design their customized pre-construction process to give the field team everything they need to finish instead of just enough to start. And the key is that the team is part of the process. Another example, let’s say Steve, same company, same guy, Steve’s business.

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is currently at $7 million in annual revenue. He’s focused on custom homes and remodels. And he looks at the future and develops a strategy and realizes, okay, interest rates are coming down. So Steve says, all right, interest rates are coming down, which means that the demand for housing is going to pick up. And he says, all right, we need to be able to capitalize on this. We need to be able to ride this wave of growth.

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and not get smashed on the rocks. Some companies sell themselves into oblivion and they grow until they self-destruct. Steve doesn’t want to do that. Steve wants to ride the wave and be on top of it instead of allowing this wave of growth to crash him into the rocks. So the strategy is we need to be able to grow and handle this. So he develops the what? The performance specifications. In this case, it’s for the entire company. He says we need to be able to perform

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We’re at 7 million now. We need to be able to perform $10 million worth of work in 2024 and then $13 million of work in 2025 at a net profit of 15 % at the end of the year. We need to be able to commit to a move-in date 90 days in advance. Commit to a move-in date 90 days in advance. And then he decides when he looks at his business, he says, I…

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As the owner will only be involved in the visionary role and the sales role. And I will have somebody who is 100 % accountable for everything else, like pre-construction, estimating operations and finance. Steve looks at his unique gifts and says, I love selling. I want to be the visionary. I need to free up my time in order to grow and enjoy what I’m doing. I want to only be focused on the visionary role and the sales role in the organization.

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Now, the next step is the how, the how. So this is what we help our clients do here at Construction Leading Edge. When it comes to the how, we would help Steve design his organization for the future. Take those performance specifications and we ask, right, what would it take to perform $10 million a year? Then the next year, what would it take? We would actually design for two years in the future. What would it take to perform?

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$13 million worth of work at a 15 % net profit and be able to commit to a move-in date 90 days in advance and have Steve out of everything in the business except the visionary and the sales role. So what our framework looks like is ask questions like, what will be the major functions of the business? We’re designing the organization for the future, not just organizing people we have today.

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but designing the organization for the future and ask questions like, what are the major functions of the business? Who will be accountable for key roles in the business? And if you’re wondering, there are 25 key roles in a construction business and one person needs to be accountable for each of those roles. Somebody needs to be accountable for each of those roles and one person needs to be accountable. Because if two people are accountable, that means nobody’s accountable.

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We would need to look at how many field supervisors would it take to profitably put $13 million worth of work in place in two years? What does the organization look like? And then you would get your team together. We would walk you through this process of getting your team together, your leadership team together and design your organization with them. That is the how. Again, the strategy is we need to be able to capitalize on this wave of growth, the what.

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is the financial specifications for revenue for profitability and Steve’s involvement in the business. And then the how would be designing this organization for the future and doing it with your team. Business lesson number three is that they started casting the vision. The Army Air Corps started casting the vision for the P-38 Lightning years before they needed it. If you look at history,

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You’ll know that Hitler invaded Poland in 1939 and the U.S. entered the war in 1941. And this design competition process started in 1937, two years before Hitler invaded Poland and about four years before the U.S. entered the war. So here’s the business application. The time to develop a strategy is before you need it.

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Right? The time to develop a strategy is not, well, in this case, the time to say, oh, we need a plane is not December 8th, 1941, the day after Pearl Harbor. In this case, they saw the need, they developed the strategy. They had the vision two years before Hitler invaded Poland, four years before the U S entered the war. So the time to develop a strategy is before you need it. You need to be able to look one year.

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two years, five years down the road, be able to see what’s coming and plan for it and to develop a strategy. You need to have a vision for where you’re going and have a strategy to get there. And in order to do that, you need to have the bandwidth, the time and the energy to think. That means you can’t be stuck in day-to-day firefighting. You can’t be stuck wearing all of the hats in your business.

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You just won’t have the energy or bandwidth. If you’re so busy looking at, if you’re stuck in the next eight hours, or maybe the next four hours, then there’s no way you’re going to be able to look down the road. So the time to develop a strategy is now, if maybe it never occurred to you to think about down the road, what might happen two years down the road? What, here we are at the end of 2023, and there are some things to consider. Interest rates are coming down. What does, what does that mean? There’s an election year coming.

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What does that mean? How does that impact my business? Where is my industry going? What are the trends for my customers? What are my clients looking for? You need to be able to put your ear to the ground and have some idea of what’s coming. Obviously nobody can see the future, but if you’re not even thinking about the future, will, there’s a 100 % chance you will be surprised by it. So here are a few questions for you to consider.

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Same questions I kicked this podcast off with. First of all, how clear are you on your strategy for the next 12 months? Do you have a strategy? Do you know where you’re going, where you want to be 12 months from now? Number two, think about this. What would it be like if you had a clear strategy for the next year to have performance specifications for your business?

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And to know what you need to do to make that happen. Just think about that. What if you, knew exactly where you want it to be at a clear picture of where you want to be 12 months from now. And then you had performance specifications. I want my business to be able to perform X amount of revenue at Y percentage net profit. And this is what I want my role to look like. And what if you, what if you had clarity on what your business looks like in the future? What if you had clarity on the type of projects?

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that you want to focus on the type of clients you want to work with and then had clarity on what your role in that business look like. then lastly, let’s think about your team. What would it do for your team if you could share that vision and strategy with them? What would it do for them to know, all right, this is where we’re headed. The ship is going somewhere. And we know how we’re to get there. What would it do for them to have the clarity?

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and the confidence that they’re headed in the right direction. If that sounds good to you, if you would like some clarity on your plan for the future, then we have a new offer, new uh download for you. can go download our strategic planning guide for free by going to constructionleadingedge.com forward slash planning. You’ll be able to download this PDF, strategic planning guide.

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that a few hundred of our clients have used to get clarity on what they want their business to look like in five years. It will take you through a process of going five years into the future, putting a stake in the ground, saying, is where we’re going. And it’ll ask you questions, help you get clarity on questions like, how do you feel about the business? What are the most important things in the business? What is your role in the business?

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And you’ll also have a walk you through a process to develop specific measurable goals that you want to achieve in the next year to create detailed performance specifications for your business. And I would encourage you to be very specific about your goals. So if you want to get your free copy of our strategic planning guide, go to constructionleadingedge.com forward slash planning PLA. uh

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That’s constructionleadingedge.com forward slash planning. And maybe you’re thinking that sounds great. I’d love to have a strategic plan, but I am so busy putting out fires. I don’t have time to work on my business. I’m working 60 to 70 hours a week and 25%, 50%, maybe 100 % of my time is in firefighter mode. So if that’s you.

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If you feel like you’re spending too much time in day-to-day firefighting, maybe you feel like your business is all in your head. If every problem comes to you, if the stress of the business is starting to get to you, if the business consumes more of your life than you would like it to, something needs to change, right? So if you want your business to run without you to some degree, so maybe you can just work.

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spend a few hours a day working on your business. Maybe you want to be able to take a long weekend. Maybe you want to take a proper vacation. Maybe you want to sell your business someday. Maybe you just want your business to survive. If something happens to you, then you need to have a few crucial systems in place. We talked about a few of those in today’s episode, Nailing the Handoff, number one, and Designing Your Accountability Chart. These proven crucial systems that have helped hundreds of our clients

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get out of their business to some degree. So if you would like our help installing those crucial systems in your business, so it’ll run without you. So you can get out of day-to-day firefighting. Maybe if you feel like a visionary who is stuck in day-to-day operations, here’s the next step. Go to constructionleadingedge.com forward slash apply and apply for a free business evaluation call with my team. On that call, we’ll help you uncover the real root causes.

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of some of your issues that you’re dealing with, helping you get clear on your objectives, walk you through what those crucial systems are and help you map out a plan to make it a reality. And if it looks like you’re a good fit, we’ll discuss our systematize your construction business program. Please note these calls are not for everyone. They’re only for construction business owners and there are limited spots available in our program. So if that’s you, if you want to schedule a free or apply for a

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free business evaluation call, please go to constructionleadingedge.com forward slash apply, A-P-P-L-Y. And hey, if you get value from this podcast, if you would leave a rating and or a review on Apple podcasts or whatever podcast platform you’re on, I would appreciate that. That would mean a lot to me. Hey, thanks for listening. Head over to constructionleadingedge.com.

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and check out some new updates to the website. have a podcast directory. You can go to constructionleadingedge.com, click on podcast, and then you’ll find a search bar where you can search for topics. If you want to look up handoff or pre-construction or the name of a guest, maybe you listen to an episode and you’re like, I can’t remember which episode that was. You can search for that and find that episode on there. Thanks for listening. My name is Todd DeWalt from constructionleadingedge.com.

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I’ll see you next time.