strategic planning and the closely held business portal to the future

Strategic Planning and the Closely Held Business

Portal to the Future

Copyright 2003 SCA Sunshine

I. “…(Strategic planning) comes as much out of the hearts of the principals of the company as it comes from their heads. It accepts that we don’t know what the future holds… yet the resulting strategy can guide the company in the face of uncertain internal and external events.”

e. Michael Shays, CMC


Strategic Vantage Point

Altitude Chronology


The Business System,from an operating perspective

The Customer

Front Line Employees

Middle Management

Upper Management

Executive


The Business Systemfrom a strategic perspective

Global Business Realities

Your industryYour Market

You


Family and Business: wearing two hats

Family:Financial Expectations

Roles and skills

IndividuationSuccession

RelationshipsImplied contracts

Non-business family members

Custom

er #2

Customer #1


Business

FamilyBusiness

Customer

Who is the Customer?

Family Business


Family Owned Business*

Over 24 million businesses. 90% are family owned 57% of GDP of U.S. (87% GDP of non-

governmental entities) 30% per generation survive Often unidentified, misunderstood,

underestimated, underutilized

* A business where a family has strategic control of the business; where the company provides either wealth, significant income or significant contribution to the family’s identity (Joseph Astrachan)


Strategic Thinking

1Where are we?

2Where do we want

to be?

3

How do we get there?

Current Reality

Differentiation

Mission, Vision, ValuesOperating Criteria, Goals, Strategies


1. The Current Reality

What are the Internal strengths and weaknesses of the business?

What are the External realities: opportunities and threats?

Global realities Industry realities Market realities

What makes us unique?


2. What is our Vision for the Future?

Why do we exist? What is our purpose? What do we most value? What is the likely scenario that would

enable us to differentiate ourselves in the future marketplace?


3. How will it happen?

What criteria will we use to measure against our Mission and Values?

What strategies and actions will we take? Who is responsible? When do we expect it to be

accomplished?


The House: How it stacks upStrategies

Goals

Operating Values

Criteria: Rules for Engagement

Mission, Vision

Organizational Structure


Mission:

Why the company exists

Vision:

The future state of the business: what does it want to become?


ValuesUnderlying, agreed-upon assumptions about

what is important

Mission and Vision


Values

Mission and Vision

Operating Criteria

Ways in which the organization will behave in accordance with its values


Structure

Picture of how the organization will be designed to service its customers. Includes roles and internal service relationships

Values

Mission and Vision

Criteria


Structure

Values

Mission and Vision

Criteria

Goals:Statements targeting future intentions in areas such as financial, operational, human resources, communications, leadership

Strategies: Ways in which to reach goals. Activities, Timeframes, Responsible Parties


The Process – Step I

Preparation/Data Gathering Financial Market Customer Employee Family (if family owned)

Involvement and attendance Retreat design Conduct retreat


The Process – Step II

Identify and validate assumptions Ensure availability of resources

Human Financial Technological

Define measurements and process review Top level timeline Communicate the Plan


The End

THANKS!


Family Strategy

What are the family’s values and principals?

How are they realized within the company? Within the family?

What role does the business play for our family?

What role does our family serve for the business?

What works? Of what are we most afraid?


Family Strategy, continued

How will we work together most effectively? What plans do we have for succession? What expectations do we have of each

other? Of the business? What criteria will we use to make large

strategic decisions for the business? How will conflict be managed? How important is sustainability?


Glossary of Terms

Core Values: Underlying assumptions about what is important and how the business views the world

Operating Criteria: ways in which the organization will behave in accordance with its values


Glossary of Terms

Family Business: A business where a family has strategic control of the business; where the company provides either wealth, significant income or significant contribution to the family’s identity (Joseph Astrachan)

Strategic vs. Operational Planning: Strategic is long term (3-5 year) planning. Operational planning is one year planning.

Systems: “combination of parts in a whole; orderly arrangement according to some common law.”


Closely Held: What’s the difference?

Size of company: revenues/employees

Type of company: family owned/non-family owned

Sponsorship, involvement Process, not delegated Integrated, whole system discussion


Challenges

Overlapping, often conflicting interests

Issues are magnified, visible Resistance can take different forms,

surprises Management can be caught in the

middle


SWOT Analysis Differentiation,

competitive position Vision Values Criteria Goals Strategies

Principles and Values Intentions and Goals Agreements Communication Expectations and

roles Criteria for Decision-

making

Business Strategy Family Strategy


How it worked

The Founder The Girls Sheltered workshop The family office

Thank You!


How do you go from…


78 year old founder $100 Million Chemical Manufacturing

Company Dad, CEO; Mom, President; Son

VPHR; son scientist Founder Sabotage What’s management to do? What’s son to do? What’s mom to do?


To:

78 Year old founder International spokesperson Author of published articles Relevant member of senior

management team


How do you go from…


Three disgruntled daughters Running a 5 Million wholesale

distributor Attempting to dislodge father, the

founder and claim their promised role


To:

New Products, New Industry Co-President Daughters Dad and Mom leadership resources Spouses actively involved in the

business Growing business concern


Because –The Question isn’t always the question

Strategic Planning


Customer

People

Mission/Vision

Strategic Plan

Systems

strategic planning and the closely held business portal to the future

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