Strategic Planning—One of the Three Most Important Factors in Long-Term Business Prosperity for Family Business

2018-02-22T19:26:35-04:00 Family Business Advice|

They say that if you don’t know where you’re going, any road will get you there. Being able to take “any road” may sound convenient, but don’t expect it to end well.

Through my work, I have been surprised at the number of family businesses who do exactly this—they have not created a strategic plan—and they do expect it to work out. Family business does have the distinct advantage of being more facile, able to make rapid shifts, IF they have trust and great communication in place. But this does not take the place of creating a strategic plan.

The term “strategic planning” itself can be off putting or even seem generic, just another piece of business jargon. Don’t make this mistake—see how it relates to you and your family business and make it your own so that you end up with a business that lasts.

Let’s take a closer look at the issue.

Strategic means, according to Webster’s Dictionary, “identification of long-term or overall aims and interests and the means of achieving them.” This means identify the direction you want to go and what you want to make happen along the way and at the end. So far, so good. I think this relates to all of us. For example, have noticed how much faster you shop with a list?

Planning, the opposite of “reacting,”  means “deciding in detail how to do something before you actually do it.”  When you put those decisions in writing and in somewhat of an order and link it to “strategic,”  you’ve got a direction and you’ve determined the steps to get there. Build in some flexibility along the way, and methods to measure if you’re on track and you’ve got a strategic plan that will serve your family and family business.

Here are the 4 big issues with strategic planning that we see in family business:

1. The leader lacks a framework to build the strategic plan.

The business leader knows they need it, they feel the lack of it, but do not know how to go about creating it. It’s natural to avoid things that we don’t know the steps for or think will be painful.

Developing a strategic plan is outside the “normal” scope of work so it’s hard to get momentum to do it in the face of the everyday demands of business. It very often requires the support of a trusted, experienced, objective outside advisor to get the process off the ground, lay out the steps for building it, have the business carve out the time to do it and keep everyone focused on the payoff at the end.

2. A team can’t agree on what strategy is or how to get it done.

With a straightforward process laid out before you and a clear connection to what it means for your own family enterprise, it’s much easier to stay out of the weeds and keep the focus on the productive end. This process has the effect of greatly improving communication as the pieces are brought together, honing everyone’s ability to articulate company direction and priorities. Deepening the roots for creating a high-performing team, the process serves to engage everyone and increase the resiliency of the members since they understand (and helped create) the thinking behind the decisions made.

3. The organization has a strategy but it’s not getting implemented.

If you’ve made the investment of time and brain-power behind your strategic plan, the last thing you want is for it to gather dust on the shelf. Yet that’s exactly what so many organizations do. They think the work is done when the plan has been put in writing. But strategy is meaningless without execution. It is an action plan—one that must be implemented and brought to life. Once the planning has ended, the steps and adjustments have to be integrated into the organization to mobilize the strategic planning. This requires tough decisions about roles, taking things off employees’ plates, new hires, resources, compensation, communication and accountability.

4. The client doesn’t want to spend a fortune on an outside consultant for an invasive strategic planning session.

Strategic planning doesn’t have to be painful, expensive or invasive. With the framework in place and the necessary components identified, it’s a straight-forward process with specific lines of inquiry designed to uncover potential strategic direction to develop a short list of no more than three key priorities, along with an overarching strategic theme.

Final Thoughts

Strategic planning doesn’t have to be difficult and is a part of responsible management, particularly for a family business. Painful is when your family business is way off track, not meeting market needs, not living up to the vision, and knowing that you could have made a strategic plan to end up where you meant to go.