“Everything you do now is for your family business’ future.”
I LOVE this line from an online quote: Give a man a bow and arrow and tell him to shoot and his first response would be, “At what?”
When there is no target, there is no purpose for shooting.
On the other hand, if you gave the archer a target and challenged him to hit the bullseye, everything changes. You now gave him something to aim at, something to challenge his skills against, something to measure his progress with, and something that gives all of his effort purpose. All by adding in a simple target.
The goal of strategy is to describe how and why the company is going to achieve its goals and objectives and to that end, the company must ensure that its strategies are aligned.
According to a research paper by John Ward, co-founder and principal of The Family Business Consulting Group, Inc., the term “strategic planning” typically refers to the process of developing a business strategy for profitable growth. It is designed to create insights into the company and the environment in which the company operates. It provides a systematic way of asking key business questions.
Such an inquiry challenges past business practices and opens the way for choosing new alternatives. The result should be a well-prepared strategic plan—usually a written document—that spells out specific steps to improve customer satisfaction, increase profit, and revitalize and prepare the company for the next generation. The plan also states the chosen mission of the business, identifies the direction of future growth, and describes programs that can help to achieve that growth. It thus indicates ways in which the business can compete more effectively.
Jane Hilbert-Davis, founder of Key Resources, an international business consultancy based in Boston, defined strategic planning as simply creating a plan of action. Originally from Greek words, “ster” which means to spread out, usually in a military sense, and “ag” to drive or to lead, the word “strategy” conjures up images of preparing for battle, or competition. It’s different from “vision”, which is a future imagined, a hope of how things can be in the “farther into the future” horizon, 10 to 20 years from now.
A strategic plan describes how you can get there. It’s about making decisions in the present for the future and usually involves a three to five-year time frame. It is both written and lived. It cannot be pieces of paper stuck in a drawer and forgotten, but must be thought through carefully. It should reflect a flexibility and readiness to whatever the future may bring.
Analyzing the critical 3s
As a strategic planning facilitator, my initial efforts as I begin my intervention is to profile the current situation using financial, competitive or customer analysis, and to interview the senior managers on what they see as the key strategic issues facing the firm. The interviews often uncover all sorts of family business issues, such as uncertainty about succession, rivalries among family members, and discrepancies between position and performance.
Strategy is the result of relevant research and analysis, as appropriate; and synthesizing the parts into a cohesive unit to develop a Strategic Plan. If you want a plan that will cover three years, my advice is to formulate a strategic plan. If you want to phase your plans and not “rock the boat” due to the conservative nature of the family members, you may opt to explore starting with formulating a business plan. The latter is an action plan covering 12 months.
But actions taken alone are just tactics.
For the family business to survive and grow, its marketing strategy must be compelling and competitive.
Marketing strategies should identify customer groups the company can serve better than its competitors and tailor its product offerings, prices, distribution, promotional efforts, and services to those target market segments. Good marketing strategies help the company concentrate its efforts on the markets it can serve best.
It is crucial that the compelling strategy takes into account all aspects of the company, so that the whole organization (and the executives) to quote Julie’s CEO, Opep Gandionco, “rides one bus” and proceeds in the same direction with the same purpose.
In the end, the company’s strategy is more likely to yield positive results if all employees understand, embrace and buy into them.