The following article originally appeared in the March newsletter to clients of Kiley Advisors, LLC. Reprinted with permission.
The benefits of interval training, where periodically you speed up and then slow down again, are proven to enhance athletic performance and overall health, no matter whether the athlete is a cyclist, runner, canoer, skater or walker. In fact, there is a new study that validates that interval walking is the best exercise for most people who want to stay both healthy and trim.
Can interval markets produce the same benefits for commercial construction companies? The greater Houston commercial construction market has certainly been in the “speed up cycle” of the interval since 2012, and now it will enter the “slowdown cycle” for a couple years. Can this pattern allow companies to stay fit with steady and reasonable profitability? Can they stay trim with no excess expenses, but with enough additional funds to invest in talent and technology? And in this more staggered and cyclical environment, can companies meet their strategic growth goals over a normal strategic planning horizon of 3-5 years?
It is our judgment and observation that in construction companies that are both well-lead and well-managed, intervals can produce the same positive benefits as they do for individual athletes. A proven benefit of the interval approach in athletes is that it increases overall performance level – if they regularly do the cyclical training (speed up/slow down) – they will develop the lung capacity, the cardiovascular improvement and the overall strength in legs, arms and other muscles to go farther and faster in future cycles, in both the speed-up and the slow-down. They steadily gain an overall competitive advantage in their chosen sport.
Construction companies can gain these same advantages.
It is in the slow-down cycle – the recovery period – that the real gains can be made. In these slower-paced markets, leaders have the chance to assess and analyze their relative competitive performance, to think strategically, to shed or acquire, to invest in software, equipment and above all talent – in skill sets that can prepare them to perform better when the next speed-up cycle occurs. Their companies will go farther, faster, or they can try steeper slopes with more payoff: markets that open to only truly superior performers, where the competition is thinner and the margins are better. And like athletes, their company’s overall performance will be better in both cycles. They will meet their strategic growth and performance goals.
