By: Marc Sanderson
Two companies started in the same industry at the same time. They hired similar people, built similar products and chased many of the same customers. Ten years later, one was consistently far more profitable than the other. The difference was not smarter people or harder work. It was better strategic choices.
The more profitable company knew exactly where it could win—and, just as importantly, where it couldn't. The leaders built the business around customers and projects that played to business’ strengths and had the discipline to walk away from everything else. That's strategy.
Michael Porter, widely regarded as the father of modern competitive strategy, argues that competitive advantage comes from making deliberate choices about where to compete and how to win—not from trying to be everything to everyone. Porter’s work can be distilled to a simple definition of strategy:
Strategy is an integrated set of activities that positions a firm within an industry to earn superior long-term returns.
Too often, leadership teams confuse strategy with goals, budgets or growth plans. Those are outcomes—not strategy.
Strategy isn't deciding what you want to be. It's discovering where your company naturally wins—and having the discipline to build around it.
Your strategy is often hiding in your last 100 projects—the work you excel at, the customers you serve and the jobs that quietly drain value. This is where your strategy begins.
Every CEO has three strategic choices to make:
- Play the right game. (Industry)
- Choose how you'll win. (Position)
- Align your business to deliver on that promise. (Integrated Set of Activities)
Most companies focus on one. The best companies master all three. Here’s how I see them play out to create strategy:
Industry: Play the Right Game First
The first question isn't: "How do we grow?" It is: "What game are we playing?" Every industry has different economics. Even in lower-margin industries, exceptional companies outperform because they play a different game. Too many manufacturers assume they're in a commodity trap, where price always wins. They're not. Every industry has customers who value something more than the lowest bid.
Don't ask whether your industry is attractive. Ask where the best opportunities exist. The best fishing isn't spread evenly across the lake.
Position: Choose How You'll Win
Winning on purpose starts with knowing why customers should choose you. Too many companies say they're differentiated, then compete on price every time the pressure rises. They change their value proposition from customer to customer, from project to project. That's not strategy. That's reacting.
Most discussions of differentiation focus on innovation, brand or customer experience. In manufacturing and construction, differentiation often comes down to one of three key capabilities:
1. DELIVERY: Can customers trust that you'll deliver on time, every time?
When I purchased Wilkie, delivery became our strategic focus. We didn't just promise it. We built the systems, workflows and accountability to make it happen. That commitment ultimately led to the development of INNERGY, allowing manufacturers to compete on delivery with the ability to measure and manage.
2. QUALITY: Can customers trust you'll deliver exactly what they expect?
Quality means more than craftsmanship. It requires disciplined processes, from blueprint verification to quality assurance at every stage. Companies that inspect quality only at the end usually pay for mistakes twice. Leaders who compete on quality build it into every activity, from production through final installation.
3. SERVICE: Can customers trust you'll respond when it matters most?
In fast-moving tenant improvement projects, responsiveness often matters more than perfection. Customers value partners who are collaborative, proactive and agile. Only a handful of companies consistently achieve that level of service.
ACTIVITIES: Where 1+1=3
Every organization has the same core activities: estimating, engineering, scheduling, production, installation and accounting. The question is whether they make each other stronger.
This is where strategy becomes real. Most managers optimize functions. Great leaders optimize the entire system. When estimating supports production, production supports delivery, delivery strengthens customer relationships, and customer feedback improves estimating, something powerful happens.
One plus one begins to equal three.
The real competitive advantage is the plus sign—the fit between activities. Competitors can replicate individual capabilities. What they struggle to replicate is a system where each activity strengthens the next.
That's why an Integrated Set of Activities (ISoA) is often the hardest part of strategy. It requires leaders to align the entire organization so the whole creates more value than any single function could on its own.
Like fishing, no single advantage catches the fish. It's the combination of the right boat, the right lure, the right location, and the right execution. Strategy works the same way. Sustainable competitive advantage comes from how all the pieces fit together.
Fish Where the Fish Are
So where should a CEO begin? Start by understanding where your company wins today. Not every customer is equally valuable. Not every project is a good fit. Not every opportunity deserves pursuit. What does your data say?
One company, founded around the same time as Wilkie, couldn't understand why Wilkie consistently outperformed it. Rather than guessing, leadership first ranked customers based on experience. After implementing INNERGY, they validated those assumptions with project data.
The results were clear: Some customer types consistently generated strong margins while others quietly consumed time and resources. They shifted toward work that matched their strengths—and profitability followed.
Within three to four years, the company achieved its best financial performance ever, approaching Wilkie's profitability. Today, every strategic planning discussion begins with one question: Where should we fish?
That's strategy. Not chasing every opportunity. Choosing the opportunities where your company is built to win.
One of the hardest responsibilities of leadership is deciding what not to pursue. The wrong customer. The wrong market. The wrong project. Strategy isn't about saying yes to more opportunities. It's about saying no to the wrong ones. Every no sharpens your focus. Every yes should strengthen your strategy.
The Strategic Challenge
Great strategy is not about being the best. There is no universally "best" company—only companies that are the best fit for the customers they choose to serve.
Apple didn't become extraordinary by making every type of technology. It differentiated through an integrated ecosystem that competitors still struggle to replicate.
Ryanair didn't try to delight every traveler. It built an organization relentlessly optimized for cost efficiency, becoming one of the airline industry's most profitable companies despite operating in one of the world's toughest sectors.
Both companies made clear choices. Both built integrated systems. Both accepted that success meant saying no to many opportunities.
If your leadership team is beginning its strategic planning process, resist the urge to start with financial targets or growth goals.
Instead, ask four questions:
1. Where within our industry can we create the most value?
2. What position will we own, cost leadership or meaningful differentiation?
3. Are all our activities aligned to reinforce that position?
4. What customers, projects, or markets don't fit the previous answers?
The best strategies don't help you win every opportunity. They help you recognize the ones worth winning. Then, they align the entire organization to win them consistently.
Marc Sanderson is the CEO of INNERGY and former President/Owner of Wilkie Sanderson. He began in the millwork industry 20 years ago with a small cabinet shop and built it into one of the most profitable operations in the country. A Harvard MBA and 2024 Wood Industry Market Leader, Marc is known for transforming complexity into clarity through data-driven strategy and culture first leadership. Equal parts analytical operator and motivator, he’s just as comfortable refining strategy as he is rallying a room around a shared vision.
By: Marc Sanderson
If I had to describe most woodworking businesses in one sentence, it’s this: custom is core to who we are. We’re fondly called the “junk drawer” of the construction industry. If it’s unique, interesting, aesthetic, or complicated, we’re the ones customers call. Most don’t even ask if we can do it. They assume we’ll figure it out—because we always do.
That’s also what creates the tension for any leader who wants to grow: if custom is unavoidable, how do you scale?
Most businesses scale by standardizing the product. Think about GM—or almost any car manufacturer. It’s basically the same vehicle platform with a few choices—color, trim, features. Or Post-it notes. They have the same product in different colors and sizes. Businesses like those can scale because the product is designed to be repeatable.
Because our work is custom by nature, we don’t get that choice. We can’t just decide to stop doing custom—or do less of it. It’s the whole reason we exist. So, does that mean scaling isn’t possible? Not at all. It just means we need to scale differently.
Where to Standardize: Process Over Project
I learned that the hard way. At 28, I bought a small Minnesota woodworking company with big aspirations—but I didn’t understand how custom businesses actually scale. Like many leaders, I assumed great work would drive growth. I was wrong. Then I had an epiphany that changed everything: the project doesn’t matter. The workflow does.
We built millwork in all kinds of environments, spanning residential and commercial. Every project was unique in its product attributes, but the steps were the same, whether it was for a medical facility, sports stadium or a high-end home. The product changed every time; the way work moves through company didn’t have to.
That’s when it clicked: scaling a custom business isn’t about standardizing the product. It’s about standardizing the process. That insight transformed our company and I’ve seen it transform others—again and again. It became clear: technology is the force multiplier—making consistent workflows possible in an engineer-to-order world. Thus, I built software to run our process, then founded INNERGY to share the technology—and operating system—with others.
So, how do you scale a custom business? Here are the key steps:
- Build structure around your workflow.
Most organizations can map their workflow in about 15 steps or less from the moment a job appears. The number isn’t the point. The goal is enough structure to create clarity without bureaucracy. With structure, leaders can manage the business like a system instead of a constant emergency.Don’t chase the “perfect process.” Start small and make it stick. It can be as simple as: drawings start → drawings returned → materials ordered → production started → install/closeout. Clarity creates control, and control creates scale. - People power results—not process.
Mapping the workflow is the easy part. Getting people to use it and seek to improve it is the hard part. I’d rather have a simple workflow that people follow than a perfect one that no one does. You can’t start with a complex map on a whiteboard and expect adoption. This is not a light switch, it’s a dimmer. The constraint is buy-in; not the design.
Start with a process people can own. The first version will miss things—and that’s the point. Run it and repetition will reveal gaps, uncover patterns, and sharpen the team’s questions—showing what to refine first. In our case, the team flagged tracking when drawings were sent out and returned as critical so we fixed that together first. Clarity comes from execution, and execution turns a simple workflow into a scalable system.
- Find the bottlenecks.
Once the workflow is standardized, real visibility becomes possible—and visibility is where scale begins. In a custom business, you don’t have infinite problems; you have one main problem at a time: the bottleneck.This is where the Theory of Constraints becomes practical as an operating system for the business. There is always one limiting factor that caps how much the system can produce. In other words, no matter how hard you work everywhere else, your results are constrained by the slowest part. The goal isn’t necessarily to eliminate all bottlenecks forever—it’s to spot them quickly, make them visible, and prevent them from becoming fires. - Prioritize effort where it pays back.
The challenge is that the bottleneck in any organization is constantly shifting. One day it’s engineering, the next day it’s procurement, then finishing or install. So, mentally and operationally, leaders need to shift from “optimize everything” to find the key bottleneck and fix it—one at a time.Prioritize based on the bottom-line impact: identify where work piles up and downstream teams are waiting, then focus on the constraint that boosts throughput and protects margin the most. Ask: Which bottleneck maximizes the bottom line? Prioritize throughput dollars—not necessarily the loudest or largest department. This is where leaders shift from managing the variables in their heads to getting ahead of the business. - Be creative when attacking a bottleneck.
Most companies jump straight to capacity as the solution—more people, overtime, or outsourcing. Sometimes that’s needed, but it’s rarely the first or most effective move. Often, the best wins come from eliminating waste.It’s one of the biggest mistakes I made early on. We had engineering working on projects before the materials arrived. It looked proactive and productive, but nothing could move downstream. It was the right work at the wrong time. Once we synced engineering to the arrival of materials, throughput jumped without increasing headcount or capacity.I’ve seen the same pattern again and again through our work at INNERGY. One customer realized finishers were spending time moving materials instead of finishing. They redesigned the flow and used a simple signal system to shift handling to others. No overtime or extra headcount, just better bottleneck management.
Stability to Forecasting
That’s what scaling looks like in the real world. It’s not glamorous. It’s a relentless focus on the constraint, protecting it from waste, and making small changes that compound. Custom businesses do not win by working harder. They win by removing friction, managing time, and maximizing throughput.
Perfection isn’t the goal—progress is. You move from firefighting or triage to stability, from stability to proactive planning, and eventually, to forecasting. You stop managing this month’s fires and start looking three, six and twelve months out.
That’s the better solution: embrace custom—and manage it. Build a disciplined system where custom work can thrive, improving step by step, bottleneck by bottleneck, with visibility and data—not heroics.
Marc Sanderson is the CEO of INNERGY and former President/Owner of Wilkie Sanderson. He began in the millwork industry 20 years ago with a small cabinet shop and built it into one of the most profitable operations in the country. A Harvard MBA and 2024 Wood Industry Market Leader, Marc is known for transforming complexity into clarity through data-driven strategy and culture first leadership. Equal parts analytical operator and motivator, he’s just as comfortable refining strategy as he is rallying a room around a shared vision.