Family businesses often think of strategic planning as succession planning. But the two are very different: If you don't know where your company is going, how do you know who should lead it there? That's why Paul Karofsky, director of Northeastern University's Center for Family Business in Dedham, Massachusetts, contends that before a family business focuses its attention on the issue of succession, it should concentrate on developing a strategic plan for growing the company.
Just the words "strategic planning" are enough to raise skepticism in family business founders who see the process as a threat. It implies change and communication, two concepts entrepreneurs are not generally known for initiating or accepting easily. So a catalyst, such as the transfer of leadership from one generation to the next or the professionalization of the business by hiring nonfamily managers, is often needed to prompt a re-examination of the marketplace and the goals of the family and company.
That's what happened at Spag's, Shrewsbury, Massachusetts' 64-year-old discount store, which sells everything from candlesticks and paper towels to Barbie dolls and name-brand clothes.
"We knew we needed to address a slew of issues our father had ignored," says Jean Borgatti, one of three daughters of the store's founder, Anthony Borgatti. Among those issues: sharpening the store's information systems; looking at business expansion options; charting out a succession plan; reinventing themselves to meet the growing incursion of the discount market; hiring professional managers to work with the community of dedicated, long-standing employees; and developing new ways to capitalize on their existing strengths.
Carol Borgatti Cullen, Jean Borgatti and Sandy Borgatti Travinski actually began their strategic thinking years ago. Their father was resistant to change, however, and it wasn't until their father's death two years ago that they had the authority to implement some of their ideas. Now they're working on a formal plan.