Why Do Family Businesses Need a Strategic Plan?
Submitted by Dave Schnarr
Family businesses like all other businesses have many new challenges facing them today. How will they continue in the long term? How will they utilize new technology to provide a competitive advantage? Is there a plan in place for leadership in the future? Do current issues/ conflicts have a forum to facilitate discussion and resolution? These are just a few examples of what family businesses face as they work together for the benefit of all. What does the process of strategic planning do for family and non-family members? As a result of working with family businesses, the following are some of the most talked about positives:
- It provides a forum for communication. This is always number one. Time and time again, I have heard family members say that the process allowed them to ask and talk about the tough questions in a safe environment. One obvious area often needing discussion is succession and all the feelings around it.
- It allows family members and non-family members to take some time away from the day-to-day pressures of running the business and to reflect upon the future of the organization. Time is available to deliberate about larger issues.
- Trust is created when the family works together to plan or problem solve around tough issues. Members learn to suspend judgement as options are presented and discussed. Building and maintain trust can build a strong foundation for future endeavors.
- Goal setting provides the basis to re-visit, revise or establish a mission and a vision. This focus is crucial to moving forward. When goals are written down, they are much more likely to be achieved.
Although many family businesses resist family business planning, going through the strategic planning process develops a systematic framework for thinking about the future strategy for themselves, their family and the business. Unfortunately, recent surveys indicate that only about one third of family businesses have a written strategic plan. Based on the benefits outlined above, they are missing out on some very valuable opportunities for learning and insights into the future. Watch for the next issue in which we will discuss obstacles to getting this process started.