Strategic Planning: A Roadmap to Success in Your Family Business "If you don't know where you are and you don't know where you're going, then any road will get you there."-Anonymous
By Sherman Titens
Using strategic planning to improve the effectiveness of a family business is a relatively new concept. Today, the tools and techniques of strategic planning are applied to family businesses in order to deal with a variety of critical issues.
Unfortunately, the translation of the strategic planning process to the family business universe has seen more than a modest share of frustrations and failures. This may largely be due to the refusal to recognize that the traditional strategic planning models must be modified to work effectively in the family business environment.
In family businesses, succession planning is a key component of comprehensive strategic planning. To really work well, the family business succession planning process needs to begin with the resolution of these issues:
Should the business be perpetuated?
If so, who should be the successor?
When should the succession take place?
How should the successor be prepared?
Are the company's mission, goals, objectives and strategies appropriate in today's business environment? If not, what changes should be made? Does the successor agree?
*What are the family implications?
What should the timetable look like?
Successfully developing and implementing a succession plan in your family business will allow you to focus on the people issues while your business continues to grow profitably through the leadership transition.
The succession planning process is like taking a trip. It provides an added benefit by putting into sharp focus the following four issues:
Where are you now?
Where should you be heading?
How do you best get there?
How do you know when you have arrived?
The Succession Planning Process The succession planning process involves a number of sequential activities, each of which builds on information and direction generated from the previous activities. Family businesses can use the following planning components:
The succession issues. Before starting to develop your strategic plan, you should face the succession issues described above. Is there a family member who is capable and interested in taking over the business? If not, the business will have to be sold either to the employees or to an outsider.
Develop a plan to plan. In this step, conduct an orientation to the planning process. Family businesses may wish to use the services of a consultant.
Small group meetings. Use small group meetings with customers, employees and suppliers to identify the critical strategic issues facing your family business, and to help set the direction for the future.
Strategic business planning. Conduct planning sessions for your key family members and non-family managers and executives. Conduct them away from the business, and schedule at least one full day.
Customer audit. Bring customers into the process through surveys. Design the survey with the input gained at the planning session. The purpose of the survey is to evaluate current conditions, to determine which conditions need change, and to assess the mood of the customer base and determine what they would like to have available in the future.
Developing the succession plan. The next step is to develop the succession plan. Using an agreed upon planning horizon (usually three to five years) and bringing together all the data gathered in the earlier steps, you can develop a succession plan for your family business. After it is written, key family members should review it, and the successor and key executives should subscribe to it, as should perhaps your banker where credit lines are significant to the continued success of the business.
Senior family member. Although the process is moving forward, the senior family member may feel the business passing him or her by. This can create problems, as the family and key executives may be inclined to take sides. A better approach is to introduce the plan in a way that will allow the senior member to recognize that his or her participation is vital to the process and needs to reflect the years of experience and contributions to the success of the business.
Commitment A family business that commits itself to learning and using the succession planning process invariably generates new and positive enthusiasm, in addition to benefiting from the structural, programmatic and procedural steps of the process. This enthusiasm often enhances the commitment of the successor to the future success of the business.
Sherman Titens is president of The Titens Consulting Group. You can contact him at (913) 469-5279 or .
