In an earlier article I focused on a key question that arose during a strategy session with one of my clients: Should the standard processes and activities involved in strategy planning work just as well for family businesses – why or why not? The article discussed what makes family businesses unique and whether these differences warrant separate processes or frameworks. We learned that the “Familyness Advantage” can lead to some pretty incredible long-term results, according to a recent Rotman study. In summary;
“Family companies live longer, are more stable and are less risky” and “… their long-term results may be driven, at least in part, by the long-term perspectives of family owners.”
I concluded that strategy planning should be radically different for family businesses and wrapped up the article discussing an effective “Three Circle Model” to use for all strategy sessions. In this article, I will review other unique characteristics of strategy planning for family businesses that should be considered for your family business.
Choose the Right Team
There is absolutely no way that just any advisor or employee can facilitate strategy sessions for family businesses. Someone or a group of advisors skilled in understanding the “Familyness Advantages” as well as the challenges will produce the best results for you. In many cases, especially when long-term planning begins to consider transfers of leadership, ownership and control, a multi-disciplinary team will be essential. Looking back at my fifteen years with two family businesses, I know first-hand the pitfalls of trying to do planning internally – so many important conversations did not occur.
Ever heard about “The Elephant in the Room”? Due to the complexities associated with the conversations needed around ownership and control among family members, unique expertise in setting the right environment is critical, so that EVERYTHING gets discussed – no matter how risky the topic.
Create the Right Environment
Creating the right environment with the following attributes are essential, given the unique nature of family businesses:
- Establish Shared Responsibility or Equal Onus among the team
- Establish mutual trust and creating a safe place to discuss difficult topics
- Build respect among everyone so that each member is seen for who they are, and who they could be, not who they once were. Deliberate tactics are required to break through these views
- Establish a “Growth Mindset” among the team
Use Special Tools & Resources
In all of our strategy sessions held among family members, we see some pretty powerful insights surface during two activities we do:
- Strengths, Weaknesses, Opportunities and Threats (SWOT) activity
- Historical timeline – looking back in 5 year increments and looking forward in 5 year increments
Only an advisor with expertise with family businesses will give these two activities the attention and respect they deserve. These advisors will deliberately watch for reactions during these activities among the different generations. I’ve witnessed a sense of pride from the founding gen when they see their children really “stepping up” and generating some unique opportunities as well as understanding some of the key threats facing the business. And, there are stories shared during the Historical Timeline activity that were heard by the next gen for the first time. How powerful it is for the next gen to learn about some of the darkest days as well as some of the biggest successes of the business over its history. Hearing these experiences directly from the owners, exposing vulnerable emotions at times, can be really powerful.
Use Project Management and Execution Essentials
Most business strategy plans do not get executed very well for a number of reasons. Anyone owning or working in / with family businesses understand the additional complexities that might inhibit execution of any given strategy. If a long term strategy plan involves gradual transfers of ownership, control or decision-making among family members, the stakes become even higher.
So, it takes special skills and tools to work with key stakeholders on the plan itself and also to manage the strategies and initiatives to will be implemented over a longer period of time. Many family business owners are heavily involved in the business operations so executing on strategic items takes deliberate attention and time-blocking to ensure execution takes place. I am a huge fan of facilitated bi-weekly owner meetings to share successes and challenges as the strategy is slowly brought to life. Too often, these strategy meetings do not take place so barriers in executing key initiatives are not properly discussed and resolved.
Keep Strategy and Operational meetings separate
Another useful tactic is to have separate “operations ” meetings and “strategy” meetings with your owners/ leaders. The way our brains work, once we dive into an operational issue that might need urgent attention, we may not have the energy to discuss and execute on strategic items … especially if the issue is complex and may involve deep emotions.
To conclude, I hope I’ve made it clear how important it is to appreciate all of what makes up your “Familyness Advantages”. To ensure these advantages are leveraged and protected, you need to think radically different about your strategy planning sessions. Yes, it will be an investment of time and resources. But, by understanding some of the unique family business strategy planning characteristics we’ve discussed in the past two articles, you are investing in your “Familyness Advantages”. As a result, you will be significantly increasing the odds of long term business success.