Creating a Strategic Plan for Growth

Before focusing on succession, develop a strategic plan for growing the company.
Magazine Contributor
5 min read

This story appears in the September 1997 issue of Business Start-Ups magazine. Subscribe »

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.

Getting Down to Business

Before you start formulating your company's strategic plan, determine exactly who should be involved. "We advocate getting the younger generations involved in the planning, even if they're not sufficiently knowledgeable about the business or can't offer too much direction," says Melissa Shanker, associate director of Loyola University's Family Business Center in Chicago. Being part of a task force is a way for young people to learn more about the business and its organization and to decide how involved they want to be.

The development of a strategic plan should also involve nonfamily managers. These individuals can enrich the process and ultimately will be part of implementing the changes. "Their involvement doesn't guarantee smooth implementation," says Karofsky, "but it does reduce resistance."

Once you've decided who will be involved, it's time to get to work. This may not be easy, as family businesses must deal with issues nonfamily businesses don't have to worry about. Corrosive internal conflict, disinterest in the business and a lack of qualified successors are as threatening to the longevity and success of a family business as slow business cycles, not knowing how to compete effectively in specific markets, or low-cost competitors. Start developing your plan by asking these questions:

  • How aggressively are we willing to reinvest the family resources?
  • How committed are we to continuing and growing the family business?
  • What entrance requirements do we see necessary for the younger generation?
  • Could our conflict-resolution methods be improved?
  • Are we enriching the next generation's leadership skills by providing and encouraging additional education and training?
  • Are the processes that we use to explore and review these goals and issues working?

Unlike strategic plans of nonfamily businesses, family businesses must take into consideration and plan around the strengths, limitations, likes and dislikes, and future plans of its key leaders, says Karofsky. For instance, if dad and mom are planning to retire in five years, that should be factored in. If a daughter being groomed for leadership has a passion for the outdoors and is more interested in manufacturing backpacks than pocketbooks, that should also be taken into account.

Put It In Writing

It's not enough to come up with ideas in your strategic planning sessions and then just hope they'll be put in place. The plan needs to be organized in writing. In a 1995 survey of family businesses conducted by Arthur Andersen Consulting and MassMutual Life Insurance Co., more than half the respondents said they had strategic plans. A follow-up survey in 1997 asked a more definite question: How many family businesses have written strategic plans? With the insertion of the word "written," the percentage dropped to 30.

Yet the difference between having a plan and having a written plan is significant. According to the 1997 Andersen/MassMutual survey, there's a high correlation between the existence of a written strategic plan and higher sales revenues and greater international sales.

This need not be daunting, however. Limiting a strategic plan's summary to a page or two helps break down the psychological resistance to implementing it.

And implementation is what the process is all about. Once a plan is written, it must be communicated to the family and other employees. Once shared, the plan becomes a unifying force within the family and the company because it reflects the family's values and goals--and plans for reaching those goals.

The process of strategic planning starts with thinking, assessing and evaluating. The plans are then written down, communicated and implemented. They must be continually monitored, evaluated and updated. Weaving the family and business parts together to form a viable strategic business plan for the family business is tricky. Still, it's worth remembering that when a plan is put together, the likelihood that the business will survive and prosper from generation to generation is strengthened.

Patricia Schiff Estess writes family business histories and is the author of two books, Managing Alternative Work Arrangements (Crisp Publications) and Money Advice for Your Successful Remarriage (Betterway Press).

Contact Sources

Loyola University, Family Business Center, (312) 915-6490,

Northeastern University, Center for Family Business, (617) 320-8000, ext. 8015,

Spag's, 193 Boston Turnpike, Shrewsbury, MA 01545, fax: (508) 752-4383


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