”Infrastructure shows signs of slowing but housing and urban growth centers especially continue to grow remarkably. We are still on a really high level compared to the industry situation five years ago”, says CEO Juha Pekka Ojala.
Ojala states that it is considerably good to see the heating of the market to slow down. It is natural for the fast growth phase to cool off among time. The speed in Finnish construction industry has been especially high.
“The overheating of construction market caused difficulties for firms in terms of material availability and expensive material prices.”
SRV observed the speed of the construction industry and was able to grow rapidly 25 percent a year from 2014 to 2017. The growth phase decreased fast last year, at the same time when the profitability became weaker.
SRV’s business was strained since large risks were realized. Geopolitical uncertainty had lasted long in Russia and the followed ruble’s exchange rate decreased. SRV had to face the rising costs caused by overheated construction market. Shopping mall Redi’s delay in Helsinki’s Kalasatama area caused large challenges.
”We have multiple business environment related challenges to be faced. We have had limited time to develop our company level strategy and accelerate growth as we have been busy to react in time to political and business environment changes. The fast growth phase was extremely intensive, but now we can focus on the internal management and long-term strategic development”, estimates Ojala.
At the end of 2018 it was clear that the company needed new, positive energy and new practices for strategic management.
The management of SRV developed a renewal strategy in the Trailmaker process. First phase of this strategy is called ”fixing the internal processes” which clarifies the steps forward. The three-phase development program has had a speedy start.
The growth requires systematic strategic management and execution through concrete steps. New services and businesses are launched with clear plan to the market.
”Trailmaker Management View is used by SRV management and the board. Management’s common view is extremely important. Now we have shared understanding about the situation and goals and are now steering the company together to the same direction.”
Established in 1987, SRV corporation is a publicly listed company since 2007 in Helsinki Nasdaq stock exchange. SRV operates in growth centres in Finland and Russia, and its revenue in 2018 was 960 million €. It has more than 1,000 employees and through a network of subcontractors they work with 65 000 more people per year.
During 30 years of its business SRV has developed and innovated boldly in the construction industry. The corporation utilizes multiple construction projects through customer needs based SRV model. In the process SRV is the project leader and contractor and has responsibility for the project as a whole, from development to financing and end customer sales. One of the projects SRV is doing at the moment is Tampere city center’s Kansi built on top of railway tracks.
TRAILMAKER is a concept for faster strategy execution:
• Designed for top and executing management
• Forms concrete common view and commitment to execution
• Tests execution capability
• Brings transparency