Are you a member of the 70% Club? Approximately 70% of family businesses don’t have formal strategic plans in place. Interestingly, 30% of family businesses successfully transition into the second generation coinciding with the same number of family businesses who have strategic plans.
Simplistically the strategic planning process in a family business is similar to non-family businesses except for having to integrate the family into the plan. That’s a big exception. It’s about getting the founder’s vision down on paper and inviting (trusting) others to be involved in the planning process in a collaborative way. It does stir up sensitive issues like sibling rivalry, family conflict, leadership decisions and estate planning. This is why some consider the planning process to be even more important than the actual final plan, because it forces the family to discuss these un-discussable issues.
and are still talking to each other.
Dr. Justin Craig
Associate Professor of Entrepreneurship
D’Amore McKim School of Business
Research continues to highlight qualities that contribute to family business resilience. Many non-family entities are starting to mimic key behaviours such as frugality in good times and bad, judiciousness in capital expenditure and carrying little debt.
Successful family businesses, typically:
- Understand the importance of professionalizing the family business through the introduction of family governance initiatives that are appropriate to the needs of the ever changing business and family
- Champion the introduction of initiatives that maintain transparency
- Distinguish between what is a family matter and what is a business matter
- Are vigilant monitors of the overall condition of the business and the well-being of the family
- Understand that some things are inevitable and discuss these openly
- Appreciate the reasons why succession is challenging
- Facilitate next generation aspirants’ understanding of the rights and responsibilities of leadership
- Consider a role in the business as more than a job, more than a career.