strategic planning

Close to Home: Focusing Behaviors for Family Business Planning and Protection

Family-owned businesses are the backbone of the American economy. They account for 64 percent of the U.S. gross domestic product, generate 62 percent of the country’s employment, and account for 78 percent of all new job creation. When family businesses are successful, so is our economy.      

Research shows that a family business increases its odds of being successful when it has a written business plan. 

Although the importance of a written plan is common knowledge, it’s often not common practice. 

A business plan not only helps insure the financial viability of the family business—but perhaps more importantly—protects the family relationships.  

Family relationships are protected by a business plan for several reasons: 

  • First, the creation of the plan necessitates open communication between family members and provides a forum for frustrations to be shared.

  • Second, the plan creates a shared path forward so expectations for the business are in alignment.

  • Lastly, the plan contains metrics and accountabilities, so family members have quantifiable measures to evaluate performance, which helps remove some of the emotion involved in discussing results.

That all said, true leadership and advancement occurs in the everyday actions (and reactions) of the people within an organization. The behaviors, habits, and examples set forth by leaders drive, influence, and reinforce what is expected of employees. 

This can be even further amplified—and—complicated when you mix in the familial ties, where a blend of different expectations and comfort levels can exist. 

So what can the family enterprise do to help influence the desired behaviors of their teams, and keep everyone moving in the same direction? It starts (and never ends) with a commitment to focus.

Planning Before Action

In the first article in this series, we talked about the three essential steps in the business planning process: Create Clarity, Focus Behaviors and Measure Results. 

The first step, Creating Clarity, involves the definition of mission, vision and values. This critical first step establishes a foundation for the business plan.

It’s key that everyone in the family and on the management team know the core values and purpose of the organization, and are in agreement on what they’re building. Many plans fail because the authors skip over this initial work deeming it less important than the action oriented parts of the plan.

The clarity that is created in step one is what drives the next step, which is Focusing Behaviors.

Focusing Behaviors is critical to the implementation of a business plan because it helps to guide the day-to-day decisions that individuals make about how to spend their time. The discipline that is necessary for successful plan implementation comes from getting this part of the planning process right.  

Balance Before Behavior

Focusing Behaviors starts by identifying the high level strategies that will get the business to the next level, then determining what work fulfills those strategies, and finally establishing the corresponding metrics that support the strategies.

The first part of Focusing Behaviors—identifying the strategies that will get the business to the next level—can be found by answering the question, “How will we build this business over time?” The answers to this question should be high level, future oriented, and directional as they’ll guide the creation of subsequent sections of the plan.  

The concept of the Balanced Scorecard is a useful approach for developing your strategies.

The Balanced Scorecard framework instructs you to look at your company from a variety of a perspectives, including financial, customer, internal processes and learning and growth of the team. This approach helps companies produce a balanced plan that’s not too heavily focused on one particular area such as sales or finance. 

Once you’ve answered the question, “How will we build this business over time?” and generated a list of high level strategies, the next question is “based on those strategies, what are the important projects or initiatives that will take the business to the next level?

Defining Your Game Changers

The key to connecting strategy to execution is identifying and implementing game-changing initiatives. These are usually projects that have a beginning and an end, rather than on-going activities that are part of the regular operations.

Ironically most businesses can operate day-to-day just fine without implementing game changers, but they will not be building capacity for sustainable future growth.

Unfortunately, everyday chaos often pulls individuals away from accomplishing higher level, game-changing initiatives. Many business owners have been successful because of their ability to live in this chaotic state, but chances are they can’t maintain that pace over the long run without causing harm to themselves, their family and their team.

The ability to implement new projects is dependent on conducting an honest assessment of what to stop doing in order to free up capacity.  

Once the game changers have been identified, the hard work begins: prioritizing the timing of their implementation. There usually is no shortage of good ideas for what needs to get done in a business. You can do it all, but you can’t do it all at once!

Once the next year's worth of projects have been prioritized by quarter, the next step is creating project plans for each of the initiatives. A good project plan assigns target dates for each incremental step of the project to be completed and clearly identifies the individuals who are responsible for hitting those milestones.

Well-defined project timelines and clear assignment of responsibilities avoids finger pointing and misaligned expectations later.

Clarifying Roles

Identifying the important work that needs to get done also provides an opportunity to re-evaluate the roles and responsibilities of family members.  

Family members often end up working in roles more out of happenstance than as part of a deliberate plan. When a key position needs to be filled, a family member steps in. The planning process provides an opportunity to look at whether family members are in a role that they’re best suited for or one that happened by default.

Personal assessments are helpful tools that can be used to guide this analysis. Assessments can shed light on how individuals naturally solve problems, what motivates them, how they respond to rules, and perhaps most importantly, their communication preferences.  

Although an advantage of family businesses is the flexibility of family members to fill in where help is needed, it’s also a waste of resources for them to be in roles that don’t capitalize on their natural abilities over a long period of time.

Now you’ve identified your high level strategies, determined the game changing projects that will take your business to the next level, and created implementation timelines.  

However, in order to successfully execute your plan and see changes in your business, there must be a way to evaluate whether or not people are focusing on the implementation of the plan and changing habits that will produced the desired outcomes. 

Leading by The Moment; Moving by The Metrics

This part of the plan looks to measure those activities that need to happen consistently over time.

Ask yourself: “What are the activities, or the day-to-day habits, that need to change, in order for the plan to be successful and what are the indicators that will reveal progress?”  

Challenge yourself to think beyond the usual business metrics. Consider activities or habits related to building a sense of team, encouraging innovation, improving communication, or building better relationships with key vendors.  

Key metrics could be leading indicators, such as number of meetings with potential new customers, or they could be lagging indicators such as on-time deliveries. Again, you can use the framework of the Balanced Scorecard to prompt your discussions in this area. 

Focusing behaviors in a family business can be challenging. Relationships are hard enough in business, but when disagreements about performance occur in family businesses, the impact inside and outside of the company can be devastating.    

Creating a business plan which Focuses Behaviors in a family business produces a feeling of direction and purposefulness for family members. Identifying the high level strategies, prioritizing projects and figuring out what to measure, gives everyone on the team a sense of confidence because they can see the path forward and what it will take to get there.  


This is the second article in a three-part series. View the first article: Close to Home: Clarity, Focus and Results for the Family Enterprise and the third article: Close to Home: The Measurement Imperative in Family Business Planning.

What’s Working in Your Company? What’s Not?

Photo by  rawpixel  on  Unsplash

Photo by rawpixel on Unsplash

If your company is struggling with the planning process, it’s possible that you’re making
it more complicated than it needs to be.  A study done by the Harvard Business Review
found that most executives report making only make six major decisions a year. The
key is to get those decisions right and everything else will fall into place. 

An exercise that can be helpful in identifying those six important decisions is an evaluation of “what’s working and what’s not.” The process is simple: make a list of the major functions/areas in your business and rate them on a scale of 1 to 10 in terms of how well you think they’re working.  Then ask members of your management team to do the same and compare the results. 

Some of the areas you might evaluate include; production/operations, product/services,
sales, marketing, customer service, strategic alliances, cost reduction, technology,
human resources, and quality. Looking at your business from the perspective of what’s
working and what’s not provides a good starting point for your planning discussions
and can help guide the process to be focused on those areas that will have the biggest
impact on your business.

Build Execution into Your Business Plan from the Start


If you ask managers what frustrates them about the planning process, they will often tell you it’s the lack of execution on the plan. 

Managers see value in planning and committing the time to planning, but recognize the return on investment is often not realized. This frequently occurs because planning for the execution of the plan often comes at the back end of the process. 

At this point planning fatigue can set in and people may be anxious to move back into a state of action which can be much more satisfying than planning.  

To overcome this frustrating lack of outcomes, it’s important to budget time in your planning process for how the execution will get done. The key is to create timelines around each of the important initiatives that will be tracked and schedule a check-in for those initiatives on at least a monthly basis. 

It’s important to engage all the individuals who will be involved in getting the work done in the creation of the timelines. You must create a culture of involvement and commitment that motivates people to execute the agreed strategies and minimizes distrust, noncooperation, and even sabotage. 

Building execution into your business plan makes the process take a bit longer, but in the end it’s time well spent.

It's Time to Start Planning for Next Year, This Year

biz planning chart aug 2013.jpg

Many organizations wait to start their planning for the next year until the fourth quarter, but now is really the ideal time to begin the process for a number of reasons.  First, updating your plan now enables you to incorporate planning decisions into budgeting decisions.  Second, updating your plan for next year requires you to revisit your plan for this year which can provide a good shot in the arm to keep pushing those 3rd and 4th quarter initiatives. 

And finally, doing it now insures it won’t get lost in the year-end, holiday rush that often derails year-end planning. 

One of the biggest challenges around planning in organizations is the ability to keep a consistent and focused view of the road ahead.

It’s not surprising given the fast pace and day to day pressures every business faces, but it’s important to maintain that bigger picture, long term view if significant growth and development is to take place.