Strategic Planning to future-proof your Family Business

When I ask family businesses whether they have a formal strategic plan, the response is always one of

“Yes, of course we do, it’s all in my head and we are implementing it on an ongoing basis”

“No, I’m too busy dealing with current fires to have time to plan for 3 or 5 years down the line”

“Um.. What is a strategic plan?”

Doubtless, these family businesses are successful wealth-creators, with significant contributions to the societies in which they operate. So why invest significant time, effort and money in developing a strategic plan? The one-word answer is ‘future-proof’.  Like it or not, past success is only a partial indicator of continued success. And that isn’t great news for an entrepreneur aspiring for an enduring legacy where the business continues to generate wealth for all stakeholders for coming generations.

So, what exactly is a strategic plan?

A good strategic plan focuses on 4 activities

Activity 1: Reality check

Conduct a realistic assessment of where a business stands today. Understand the key drivers of success and what the future environment might look like.

Activity 2: Articulate vision and objectives

The vision and objectives of your business need to be clear and developed in the context of the discovered reality. Ownership of the vision and objectives by the top management is critical for success.

Activity 3: Make choices

Here your business understands the paths available for winning and generates a set of strategic possibilities.  Make choices based on a) the conditions required to make each possibility a success b) whether these conditions are realistically achievable and c) the alignment of these choices with the business vision.  This step should result in a coherent integrated strategy which guides the business on ‘what, where, how and to which customers to sell to’.

Activity 4: Plan Actions

Here your business understands the resources required to make the selected strategy happen.  Further, the business sets out an action plan for the near term (typically 1 year) and sets indicators to measure success.

How does Strategic Planning help?

Besides the clarity on ‘what, where, how and to which customers to sell’, there are several benefits to be realized

Benefit #1: Growth and Professionalization ready

“In life, as in football, you won’t go far unless you know where the goalposts are”

– Arnold H. Glasgow

A shared vision and strategy for the organization allows you to quickly identify and grab opportunities critical to continued growth.  A strategic plan is a great platform to launch your business to greater heights.

It is also the first step towards professionalization.  Professionalization does not only mean inducting professionals into your business; it equally means introducing streamlined and standardized systems and processes.  A strategic plan helps identify the systems and processes needing tweaks.  It also attracts the right professionals to the organization; a key element to realizing your vision and objectives.  Tweaking an ‘Alice in Wonderland’ conversation- “If you don’t know where you are going, any employee will get you there.”  And conversely, if you do have a strategic plan in place, only the right professionals will get you there.

Benefit #2: A guiding light for the organizational decisions

“People think focus means saying ‘yes’ to the thing you’ve got to focus on. But that’s not what it means at all. It means saying ‘no’ to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things we have done.”

– Steve Jobs

The strategic plan will be a guide for all organizational initiatives.  It reduces the time taken to make decisions, vastly improves consistency and removes any unrealized biases in making decisions.  All these factors are critical since no entrepreneur wants to make a wrong decision due to a paucity of time or for factors which are not in the best interest of his business.  Most importantly, it takes out decision paralysis and promoter anxiety which is common when we are confronted with difficult decisions.

Benefit #3: Empowered and Committed employees

“If everyone is moving forward together, then success takes care of itself.”

– Henry Ford

Most family businesses have some form of a vision and strategy.  The problem arises when they are not fully structured and live in the grey matter of the owner.  In most cases, the owner is unable to clearly communicate the vision.  The rest of the organization does not undertake activities in-line with the vision.  Having a shared, sharp and articulated vision and strategy is a tremendous boost to employees.  There is nothing more demotivating to an employee than being unsure of the goals of the organization and how s/he fits into those goals.

With a shared, sharp vision the entire organization knows what the goal is and how the company proposes to meet the goal.  Making the vision a reality becomes a team effort.

Benefit #4: An enduring legacy

“Making an enduring company was both harder and more important than making a great product”

– Steve Jobs

Building and being guided by a strategic plan is also an important first step towards building a lasting legacy.  That’s because when vision and strategy is shared, an organization is professionalized and decision making has a pattern, the organization starts becoming much less person dependent.  And companies which are not person dependent have a much greater chance of survival in the longer term.  It also gives the entrepreneur time to devote to evaluate and choose the family members or professionals which will guide the organization in the future.

Benefit #5: Enjoy life!

“Life is short, and it is up to you to make it sweet.”

– Sarah Louise Delany

Who doesn’t want to spend more time with their family, pursue their hobbies, travel more and give time to social causes close to their heart?  Get more time out of your day!

A key element to keep in mind: While strategy should always be simple, it’s important that detailed reasoning goes into its development.  Strategic planning should be given the time and diligence it deserves.

What next?

Go start strategic planning!  Will be eager to hear from you (comment below / email / call me on 9322 737 127) with any questions or comments.