Family Business Strategy Master
Unfortunately, many family businesses fail to reach their
true potential according to family business strategy master Don Schwerzler.
The reason for this is rather simple. From a strategy perspective, family businesses, especially in the early years, are “reactive” rather than “proactive”. That business model, for many family businesses, is slow to change.
“The family business entrepreneur may have a vision and maybe even a formal business plan but rarely will they have a “strategy” for the business,” notes family business strategy master Schwerzler.
“The entrepreneurial mindset is such that if/when “something comes up” (good or bad), we can deal with it! This creates a management style that can/will impose a glass ceiling on the growth and profitability of the business simply because the family business owner spends more time ‘working in the business’ rather than ‘working on the business’”. The key to breaking this cycle is a commitment from the business owner to build the infrastructure of the family’s business.
From the perspective of a family business strategy expert, some of the common strategy initiatives include:
Schwerzler has been studying and advising family business entrepreneurs for more than 40 years and an internationally recognized family business strategy master and a family business marketing expert. He is the founder of the Atlanta-based Family Business Institute and their web organization, Family Business Experts.com
When one “unbundles” all of the many different functions that are involved in running a family business, it can be daunting. Think of producing the product or service, finance, accounting, sales, HR, marketing and business development, insurance relationships, banking relationships, vendor relationships – and customer relationships.
The family business owner may know “how” each one of these work functions or departments are managed – but how are they connected? How are they aligned with the short and long term objectives of the family’s business? Those are the types of questions that will be raised by a family business strategy master.
Sun Tzu proclaimed:
"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat"
If the work functions are not linked, as part of the management of the business, then the business does not have an effective, business building strategy. This ends up in situations where the left hand does not know what the right hand is doing – and thereby creating confusion and wasted energy that negatively impacts the effectiveness of the business and creates a barrier to the business reaching its true potential.
When we are called in to help a family business, one of the first things we do is to understand the potential of the business and then to contrast that with the actual performance of the business. This type of “gap analysis” is part of our Family Business Assessment.
From that process, we can establish the strategic objectives for the family – and for the business. Our Assessment enables a family business owner not only to fix problems that are known, but also to take action to prevent serious problems from ever happening in the first place. It is the first step for the family business owner to take in getting help for his/her family business.
“There are many different approaches for bringing new perspectives to the family business – one of the best is creating a family business advisory board that can help the business owner to brainstorm new ideas, tactics and strategies,” suggests Schwerzler.
"What makes it difficult for family business owners is that every family business is unique and complex in its own way. Boiler plate solutions rarely work for resolving family business problems. In other words, a strategy that works well for one business could be a disaster for some other family business."
Our Family Business Executive Roundtable is an online resource that provides an opportunity to discuss family business issues and concerns with our team of family business experts as well as with other family business owners. As a family business owner, if you think your problems are unique to you and your family, you will be surprised to find that those issues are part of the DNA of most family-owned businesses!
For family business owners, it is important to understand that a successful strategy is never "finished" but always able to adapt to changing circumstances. In todays business environment, successful family businesses have strategies in place that can adapt to change - and able to do it quickly! Family business strategic planning is key to the innovation process.
But what about the family side of the family business equation – should there be a strategy for the family too?
“Absolutely,” says Schwerzler. “In fact, the strategy for the family should be driving the strategy for the business!”
We talk about this as the “dualism dynamic”. For example, if the business owner wants to create a mission statement for the business, FIRST he/she should create a mission statement for the family. If there is going to be a business plan for the business, FIRST develop the business plan for the family.
The TAKE AWAY from all this - the strategic plan for the family should be driving the strategic plan for the business.
If you have a question about the strategy for your family business, use the ASK THE EXPERT form to contact our family business strategy master for a free and confidential consultation.