Establishing a Strategic Plan
No matter how great your approach is, it’s unlikely to succeed without a solid strategy behind it. In the Seven P’s Playbook, this is called Planning.
A creative vision is essential, but on its own, vision is not enough. To quote Soichiro Honda, the engineer and visionary behind Honda Motor Co.:
“Vision without action is a daydream. Action without vision is a nightmare.”
But the problem with planning in a family business is that it’s not usually a formal process. Since close family members interact about the company daily, they often assume that their partners know what they have in mind, but that’s not always true.
Planning, you see, involves going deep into processes and people to see what is and is not working. You need to identify your strengths and weaknesses before you can manifest any kind of change.
Having a clear picture of your goals is where you start. Once you know these things, it’s easier to gauge performance against those targets. A strategic focus almost always translates to increased earnings, greater efficiency, and more effective processes.
And while you might confuse effectiveness with efficiency, there is a distinct difference. Effectiveness is about doing the right things to produce the best possible result. On the other hand, efficiency involves doing things right to ensure you achieve your results as quickly as possible. These two concepts work hand-in-hand to ensure you are focused on the right things (priorities) so you can attain the desired outcome in the least amount of time.
Create a Strategic Plan
A strategic plan is, essentially, your business plan. It gives you and your stakeholders a roadmap that will define your purpose and outline how you will navigate the next three months, six months, one year, three years, five years, and up to ten years down the road.
Your plan will include:
A description of what you do, your value proposition and services offered
Your unique brand promises
How you deliver your services
And lastly, it should outline what makes you different from the competition. Though a business plan is fluid and may change over time, it defines your immediate priorities, longer-term goals, and key performance indicators (KPIs) that help you measure progress.
Get Some Perspective
Stepping away from the day-to-day running of the business is essential to successful planning. If you are getting ready to take the reins on a family business, the current business plan is likely based on ideals and ideas that aren’t priorities for you going forward.
The entrepreneurial dream often goes astray when you’re caught up in daily operations. The next thing you know, you’re spending all your waking hours maintaining a business model that doesn’t fulfill your dreams.
The best thing you can do is to step away. Gaining perspective and developing strategy requires objectivity, and you won’t get that when you’re waist-deep in the weeds. When you come back, you’ll have clear goals and milestones, a vision for change over time, and a renewed enthusiasm that will make it easy to rally support from your employees.
Failure is Essential for Growth and Learning
If you don’t meet your objectives for any reason—and that happens sometimes—you learn from the experience. You know more about what doesn’t work, which helps you develop new strategies and goals and improve processes.
Failure is essential to any venture’s success, but doing things better the next time around even more so. This goes directly back to the concept of “what got you here won’t get you there.” The company’s founders—your family—did a good job maintaining the enterprise for the generations that came before. Now, it’s up to you to think about how you’re going to build on that success and make it sustainable for future generations.
Gaining Clarity: Bringing in a Third-Party Facilitator
Having a clear plan to light the way forward allows you to share it freely with your employees and other stakeholders. You might also want to include them in the planning process to take advantage of their “boots on the ground” insight and knowledge. Often, this means getting away from the business so you can focus on more expansive thinking and document your discussions.
Many organizations find value by involving a coach who has experience guiding these types of exercises. A facilitator will ask the tough questions you’ll need to address to help you work through any challenging dynamics and provide you with the tools you need to accomplish your objectives.
In the end, you’ll have a clear path forward that you can share with your employees, investors, shareholders, customers, vendors, and anybody that has a stake in the company’s success. The bigger your vision, the more clearly you can articulate it, the easier it is for people to jump on board. And this is, ultimately, what’s going to drive your growth.
Looking Beyond the Financials
During your planning sessions, it’s essential to look at factors beyond financial results. Factors such as customer satisfaction, employee engagement, recurring contracts or revenue, and the presence of a strong management team that can lead in your absence are strong predictors of how well the company will fare in the future.
You’ll need to keep an open mind and consider every possible eventuality, including seasonal downturns, market volatility, new competition, and so on. Lead with humility and intention and always be open to new ideas. Closing your mind to the possibility of failure for any reason is the wrong approach.
Take 2020, for example – how could anyone have predicted what we’re going through right now? Companies that were open to change and knew how to answer their market and their employees’ needs prevailed. Empathy quickly became a coveted skill, and companies that leveraged this approach will continue to reap the benefits.
Prepare for Your Planning Session
Planning sessions should be conducted regularly; monthly, quarterly, yearly. It’s often more productive to have those sessions off-site as it’s easier to turn off the day-to-day and build consensus around proposed changes.
If you haven’t yet, check out www.DisruptiveSuccessor.com and buy the book for more insights and definitive action steps to support your planning initiative. Come back next week when we’ll talk about Products, the next step in my Seven P’s Playbook.