Helping Family Businesses
Prosper Across Generations®


How to Make Strategic Planning Successful

By Jennifer Pendergast, Ph.D.

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The business was doing all right. Sales and profits were holding up, but next steps were unclear. There were issues and not everyone was on the same page. Questions swirled.

  • Do we have the right players on the team?
  • Are our facilities adequate? How much should we invest in R&D?
  • Should we focus on domestic or international sales?
  • Should we focus on further penetration of our existing market or begin to expand with new products for new markets?
  • How much profit should we distribute to owners and how much should be reinvested in the business?
  • Should we seek outside investors?
  • Should we plan to sell this business or should we build it for long-term family ownership?

Faced with all these questions, two next generation leaders of the business engaged us to facilitate family and non-family executives in a strategic planning process. Owners clarified their goals. Market and competitive research provided important data to make informed decisions about product development which helped to set realistic growth expectations. A clearer view of the future built confidence for investment in the business and allowed the development of plans and budgets by which to evaluate progress. Distributions were calculated after determining the company s need for capital. No outside management was needed. The same confidence led to making decisions about facilities and personnel changes, including a decision that the founder should become chairman and the two siblings assume responsibilities as CEO and vice-chairman.

Strategic planning can be a key that unlocks the door to a family business's future. That's why research has shown it to be one of the three factors most important to long-term family business prosperity.

Strategic planning helps to clarify goals, ensure goals are realistic and provide the detailed road map to achieving goals. The strategic planning process also facilitates communication among family owners, executives and directors. Perhaps most importantly, strategic planning provides a framework for decisions on many of the questions most critical to a family business's future.

Knowing the benefits of strategic planning, we recommend that all organizations develop and routinely update their strategic plans. A significant investment in time and attention is required to ensure that strategic planning is done right.

Here are ten ideas to help you get the highest return from your investment in planning:


Idea Benefit
1. Develop family goals prior to developing business goals. Helps assure that family goals are realistic and that company can achieve family goals.
2. Use an outside facilitator to structure and lead the process. Keeps the process unbiased, on track and helps assure that the final product is useful.
3. Access good external information on the industry, market, cutomers and other relevant trends, to set the context for planning. Ensures plans will be aligned with the external environment.
4. Incorporate a thorough review of company performance to identify key problem areas. Ensures future direction will learn from past mistakes.
5. Include senior management and staff in developing company goals and action plans. Ensures their buy-in when it comes time to execute.
6. Hold an offsite meeting to kick off process. Makes sure that the group recognizes the importance of strategic planning and is in the frame of mind to think out of the box.
7. Develop and publish a full calendar for planning process at the outset. Ensures adequate time is dedicated to the process and minimizes slip in schedule.
8. Develop mechanism for reviewing progress against the plan, preferably with impliations if plan is not met. Ensures accountability and maintains focus on the plan.
9. Present the plan to the family. Achieve understanding, consensus and comfort in process.
10. Have the board approve the plan and review its progress regularly. Offers the benefit of input from experienced external eyes and helps to maintain the plan's momentum and accountability.


The journey through the planning process forces owners and managers to share their personal and business aspirations, agree to a common set of goals and investigate different paths for achieving those goals. In the end, you will have more than a strategic plan. You will have a shared vision for the future and a clear path to get there. And, that s the most important benefit of all.




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