Overcoming Myopia: How Family Businesses Can Plan for What's Beyond the Horizon Through taking a longer view of decision-making and bringing younger generations into the fold, family businesses continue to thrive in difficult times, and into the 'next normal.'

It's been said that while public companies think in terms of quarters, family businesses think in terms of generations. Is it too early to start thinking about the year 2030? Or even 2040? Not if you're a family enterprise looking to stay relevant. As companies work to recover from the Covid-19 pandemic, attention will begin to move from an "interim normal" to a "better normal" that capitalizes on their resilience and agility.

When we look back 10 to 20 years from now, we may be able to point to companies whose success was driven by decisions made today based on a long view toward the horizon. Getting family business leaders to consider such long-term planning might seem unimportant in a year in which many are just trying to make it through 2021. But according to Harvard Business Review's "Why Family Businesses Come Roaring out of Recessions," family-owned companies have survived recent economic recessions at a greater rate than non-family companies by keeping their eyes on the road head, launching new products, and preserving their emphasis on corporate social responsibility.

The causes of myopia.

Some might object to looking so far ahead, arguing that the future is too uncertain and unpredictable to deploy significant attention or capital. The level of uncertainty might fluctuate from year to year, but its existence is constant and unavoidable. Organizations that stop thinking long-term do so at their own peril.

While some companies in particular industries have fared relatively well during the pandemic, they might not want to think that today's achievements will translate into tomorrow's successes. They may be feeling well-positioned for a return to normal, but as heroic as their efforts may have been, the competitive and operational landscape onto which they are emerging may be forever changed. Whether it's the nature of work, the virtualization of many forms of engagement, or diverging priorities in consumer preferences, "normal" may not ever come back, forcing businesses to revise or completely revisit their models.

Even in less uncertain times, family enterprises are prone to planning myopia. By and large, family business leaders often express confidence in their preparedness for the future, but our research indicates many may be overconfident given where they spend the bulk of their time.

In Deloitte Private's 2019 Global Family Business Survey, more than half of the respondents believed they have the right strategy to meet the challenges of the next two decades, but more than three-quarters said they don't plan beyond the next five years.

All these inhibiting factors can leave family enterprises exposed to sources of disruption that may not be registering right now, or even at this point next year, but may develop over many years to come. If 2020 taught us anything, it's that unforeseen events, or "black swans," exist and can wreak havoc on even the best plans.

It may be possible to see Covid-19 as opportunity — as a further catalyst to ensure your legacy endures. Through taking a longer view of decision-making and bringing younger generations into the fold, family businesses continue to thrive in difficult times, and into the "next normal." That won't likely happen unless the planning process becomes more formalized. By making actionable what was once theoretical, family businesses that can take a long view of their respective industries and markets may also be the ones who are still thriving 20 years from now.

The preceding is an except from "Your family business: Planning for what's beyond the horizon," part of the Resilient Family Enterprise series available online here.