1. Focus on goals, not tactics.
A strategic plan is not a business plan. It's essential that your family business clients understand the difference. A strategic plan revolves around setting business goals over the medium-term, setting a direction for the firm. A business plan, on the other hand, lays out specific actions a company must take in the next year to make the strategic plan a reality. The two work hand-in-hand. Although having a good business plan is crucial, it may be for naught if a solid strategic plan isn't also in place.
2. Stand in the future and look back.
Where does your client want to be in three years? In five? In a decade? Make sure he's absolutely clear about what he wants the future to look like, then help him decide what he needs to do to get there. Discuss potential changes in such areas as products and services, balance sheets, working culture, and organizational structure that could help him on this path.
3. Stand in the present and look around.
When planning for the future, it's still important to consider the present. Encourage your client to take a long, hard look at the business as it is right now. Does it have a genuine competitive advantage? Are his ambitions realistic? What needs to change? Ask him whether he's adequately assessing the threats of new competitors and the likelihood of game-changers, like new products or services. If he's falling behind, what needs to be done to bring the business up to par? If the business is doing well, what steps must be taken to keep it that way?
4. Invite input.
No one is an island. The array of skills needed to succeed across generations is impossibly vast and far too demanding to expect a single person to handle everything. Involve skilled people from across the company and enlist trusted outside advisers, including those with a good grasp of how the market is changing. Although a CEO needs to drive the strategic plan, the more people who contribute to it, the more disparate areas of expertise are covered and the more robust the plan is likely to be. People are also more committed to something they've helped create.
5. Be prepared for change.
Much easier said than done. A rigorous strategic planning process should both challenge the way the business is currently operating and test its fitness for the next phase. If the plan doesn't do that, it's not doing its job. Encourage clients to be open to different alternatives, approaches, and accept that they might need to adapt their own personal roles, as well as the way the business operates if they want to maximize performance and longevity.
6. Set a timescale.
A good strategic plan is like an itinerary—it's just as much about when you plan to reach the milestones along the way as it is the final destination. In fact, the idea of a “final” destination is somewhat misleading and potentially counterproductive. Whatever goal is initially set will likely change over time to better meet the shifting demands of the market. However, by focusing setting realistic milestones and focusing on hitting them, a strategic plan can still be a success, even if the “final” destination is never reached.
7. Assign responsibilities.
The CEO and board have to take ultimate ownership of a plan, which can make it difficult to give up control. However, the highest-level executives likely can't cover the breadth of skills necessary to put a plan into action and have too many other responsibilities to adequately manage the minutiae required. Specific elements should be owned and driven by appropriate managers, who have the bandwidth, specific expertise required, and are supported by the budget and resources necessary for success.
8. Translate the strategic plan into a business plan.
Analysis paralysis is a very real threat. It can be easy to get stuck in the strategic planning phase, constantly tinkering to ensure the roadmap is perfect before it is rolled out. However, such perfection is impossible. Every plan has flaws, and many of those flaws are completely unknowable until the plan is put into action. Encourage clients to try to move from the strategic to the tactical by turning the first phase of the plan into a program of action and implementation over the next 12 months.
9. Measure, monitor, and adapt.
No plan ever fully survives contact with the enemy (or in this case, the market). As your client implements the plan, stress the need for him to assess how well it's working and whether it needs to be fine-tuned. Encourage the use of objective key performance indicators to evaluate progress and determine what changes will be most efficacious. Plans aren't set in stone and should be flexible, living documents.
10. Communicate, communicate, communicate.
Clients shouldn't just share the strategic plan with their employees, but also communicate the progress the company is making against it. Focusing on milestones, as suggested in paragraph 6, can contribute mightily in this regard by offering employees easy-to-follow markers of the progress the company is making and, hopefully, inspire confidence that the plan is both sound and working. This kind of open communication can help build valuable shared senses of commitment, energy and direction.
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As a reminder, this Blog Post is for informational purposes only and is not intended as legal or tax advice.