According to Cisco Innovators Forum guest blogger from The Family Business Institute: "2010 is shaping up as one of the most unpredictable years in memory and this means that careful and prudent strategic planning is more necessary than ever for closely held and family businesses in order that they may insure their survival and future prosperity.

Strategic planning in its various forms has been around for a long time.  The necessity of planning is taken as an article of faith in larger companies, and those who do strategic planning – and do it well – swear by it.  If strategic planning works so well, why is it so infrequently adopted by family and closely held businesses?  Over our almost 200 collective years of experience, we’ve heard every objection in the book as to why people won’t adopt a strategic planning process.  The most common concerns appear as myth versus reality in the table below.

 

Objection (Myth)
 Reality
“A   recession is hardly the right time to start planning like this.” Are you   kidding?  Due to the length of the   GREAT RECESSION, companies now have impaired survivability, fewer people,   less resources, and fewer customers.  The need for strategic planning and thinking is greater now then ever!
“We don’t see the payoff of planning.”

Planning will pay off in spades in a clearer vision for all, better teamwork, better needs anticipation, improved communication, etc.  BE ADVISED: some of these outcomes take a long time to materialize and depend in part on how well you EXECUTE the plan and how accountable you hold people for finishing what they start
“We’ve never done strategic planning before, and look at the tremendous success we’ve had!”

The company is as big as it’s ever been, and you aspire to grow in the future.  Your current infrastructure won’t support more complexity, and you risk everything without an underpinning
“We’ve never done strategic planning before, and look at the tremendous success we’ve had!”

You’ve never had to deal with the current mix of multiple generations of family, non-employee owners, employee owners, and all the complexities of keeping stakeholders informed and happy
“The plan won’t be accurate.  No one has a crystal ball.”

Wouldn’t you be better off with a road map for your journey than without one ESPECIALLY if you have to make course corrections?
“We tried to do strategic planning a few years ago, and it didn’t work.”

Is it the first business initiative you’ve ever tried which proved unfruitful?  What are the component reasons it didn’t work as expected?  Might it not pay off if it’s properly executed over time?
“We don’t have time to plan.”

Then you’ve reached your maximum company size or – WORSE – you’ve begun to slide backwards already.  How will you communicate your future direction to your managers and other stakeholders?
“We don’t have the right people to plan.”

An ever more compelling reason to plan.  How will you identify the present and future gaps you have in order to best fill them?

 

 If you don’t know anything else about strategic planning, understand this: companies that plan make more money than companies that don’t!  They are better situated for handling the demands of recession – or any other changing business conditions for that matter.  Communication is better in companies that plan.  Harmony is greater, and people can more easily understand and subscribe to the vision of where the company is headed.

Stephen Covey writes about strategic planning this way:
“Planning is predetermining a course of events – working through what must happen if a desired result is to be brought to pass.  Writing your plan is vital to actually seeing it happen.  Until you produce a written plan, your profound thoughts too often will remain in the ‘some day’ state of development.  A written plan on the other hand seems to produce a power and commitment that jump starts the ‘doing’ part of the effort.”

Probably the biggest reason strategic plans in closely held and family companies fail to produce anticipated results is that senior executives don’t invest sufficient time and energy in execution following the strategic planning process. Consultants McKinsey and Company found the following: it is vitally important that top executives spend between 20% and 60% of their time on the strategic planning project.  That means that a leader of a closely held or family business must be willing to take ownership of the planning project and devote 1 to 3 days of his work week to making sure it goes as designed.  Furthermore, successful companies assigned another senior manager to be on the project at least 50% of the time during the critical implementation stage.  That incredible signal of commitment from the top of the organization sends a crystal clear message to everyone else – this is important to a successful, sustainable future!

A friend once told me, “If you don’t have weed control, you get weeds.”  Strategic planning is the ultimate form of weed control in family and closely held companies, it can mean the difference between a safe and secure 2010 or – well, you can fill in the rest.


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