Addressing the 'missing middle': Strategic planning

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“Every five years we take a long look at the business and decide what we need to achieve the next phase, whether that’s people, funding, skills, or a new organisational structure.”

Sreekanth Reddy Executive Director, Sagar Cements, India

Both the survey results and our own experience lead us to conclude that greater emphasis on strategic and medium term planning is the missing piece that would allow many family firms to achieve greater success, and fulfil their true potential. 

Some family firms are doing this already, and doing it well, but others are caught between the everyday and the weight of inter-generational expectations. While some are fully aware that this is an issue (for example, only half of this year’s respondents believe they have a strategy fit for the digital age, and even that may be flattering the truth), others lack the skills to take on the task and may not know where to start. Some are consciously or unconsciously avoiding the issue, because they fear it will cause more problems than it solves, especially in relation to personal issues like succession. And some will say they have a business plan, and are getting on with executing it. But a strategic plan is not the same as a business plan, and a plan that isn’t documented, communicated, managed, and monitored isn’t a ‘plan’ at all.

“We have a strategic plan [to double the company’s revenues and earnings in the next five years]. But, taking a broader view, our aim is to be doing something completely different by the end of that time. What might that be? Right now, I don’t know. It could be a new product, a new idea, or a new way of doing things.”

Evgeniya Uvarkina CEO, Trio, Russia

The discipline of structured strategic planning is often built up over years; but if families don't start to focus on embedding this across their business, their ability to deliver on their goals could be hampered.  This may result, for example, in chasing opportunities that aren't key to the longer term goals or a lack of resilience and ability to command the right support from key partners (e.g. finance, suppliers, customers). Paul Hennessy, Family Business Leader, PwC Ireland says, “Family firms are good at executing a plan once they have one – they can follow a ‘roadmap’ and generally do that very well. It’s getting that map together in the first place that is the challenge. I’ve seen this happen many times, both in relation to specific issues like implementing digital technology, and more widely in terms of strategic planning. In fact, you can often find family businesses that have plans covering specific issues – like technology – but no overall strategy linking them all together. There has to be one clear strategic plan, covering all aspects of the business, which is explicitly aligned to the family’s long term objectives and plans. That has to start with vision and values: you need a shared vision of the objectives and agreed values to guide the decision-making process required to get there. Without these two things, planning processes invariably flounder.”

“We are all agreed on our long-term goals - for example, we are looking carefully at how we nurture the next generation and bring them through, how we make it possible for family members who do not work at SABCO to keep involved, and how we balance the need for profitability, with the wider vision with which this business was founded.”

Sayyid Nasr bin Badr bin Hamad Albusaidi Non-executive director, SABCO, Oman

Peter Bartels, Global Family Business Leader, PwC Germany, agrees: “We often work with clients where the owner has a plan in his or her head, but doesn’t share it any wider. Because the rest of the business trusts them, it works. At least for a while. But in the long term, this can be a recipe for disaster, and it will be next to impossible to hire professional managers or to get external funding for financing growth or restructuring. There needs to be a clear plan, written down, agreed, and communicated.”

“In the real estate industry, there are a lot of people coming in, thinking they can make a quick buck. But they don’t understand how it works: they don’t even have a business plan, never mind a medium and long term strategic plan. Those are the most important skills my father taught me.”

Andrew Taplin, Managing Director, Taplin Real Estate, Australia

Ten steps to effective strategic planning

Paul Hennessy is the Family Business Leader for PwC Ireland.

While each business needs a strategic plan suited to its sector, market, and stage of development, there are some basic principles that all good plans share. Here is a ten-step guide to get you started.

1. It’s about the ‘what’ not the ‘how’

A strategic plan is about setting your business goals over the medium term, and deciding the direction of the firm. A business plan is about the specific actions you need to take in the next twelve months, to make the strategic plan a reality. So having a good business plan is crucial, but it’s only half the answer.

2. Stand in the future and look back

Where do you want to be in three years? In five? Be absolutely clear about what the future looks like, and then work out what you need to do to get there – from your products and services, to your balance sheet, your working culture, and your organisation.

3.Stand in the present and look around

Take a long hard look at the business as it is right now. Do you have a genuine competitive advantage? Are your ambitions realistic? What needs to change? Techniques like SWOT analysis can help you get an objective view of where you are internally, and you can also use PESTLE to analyse the external factors at play in your market (Political/Economic/Social/Technological/Legal/Environmental). Porter’s Five Forces analysis is another useful way to assess issues such as the threat of new competitors entering your sector, or the likelihood of new game-changing products or services.

4. Invite input

The CEO needs to drive the strategic plan, but the more people who contribute, the more likely it is to be robust. People are also more committed to something they’ve helped to create. So involve skilled people from across the organisation (and trusted advisers outside), including those with a good grasp of how the market is changing. Ask your employees, canvas your customers.

5. Be prepared for change

A rigorous strategic planning process should challenge the way you’re operating today, and test its fitness for the next phase. If it doesn’t do that, it’s not doing its job. So be open to different alternatives, and new approaches, and accept that you may need to adapt your own personal role, as well as the way the business operates.

6. Set a timescale

A strategic plan is like an itinerary – it’s about when you plan to reach the milestones along the way, as well as the final destination.

7. Assign responsibilities

The CEO and board must take ultimate ownership of the plan, but specific elements need to be owned and driven by appropriate managers, supported by the budget and resources they need to succeed.

8. Translate the strategic plan into a business plan

Move from the strategic to the tactical by turning the first phase of the plan into a programme of action and implementation over the next twelve months.

9. Measure, monitor and adapt

As you implement the plan, assess how well it’s working, and whether it needs to be fine-tuned. Use objective KPIs to evaluate progress.

10. Communicate, communicate, communicate

Don’t just share the strategic plan, but the progress you’re making against it. This builds a shared sense of commitment, energy, and sense of direction.

Explore the data

Use our data modeler to look at the findings from our Survey in greater depth. 

Explore five themes: Business performance & challenges; global considerations; The family business DNA & succession planning; digital; the people piece. 

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Case studies

Professional, practical, adaptable: Success and succession in India

Professional, practical, adaptable: Success and succession in India

Sreekanth Reddy is Executive Director of Sagar Cements, a second-generation Indian business initially founded by four friends forty years ago. It’s split several times since then, most decisively in 1992, when Sreekanth’s father and brother took control of the business as it is today.

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Traditional values: Taking a long view in Australia

Traditional values: Taking a long view in Australia

Taplin Real Estate is the oldest real estate agency in South Australia, and quite possibly the oldest family business in the sector across the whole of the country. It was started by Wilfred Taplin in 1932, who then introduced his son, Noel, to the industry and he is still an active and passionate Chairman at the age of 92. Noel’s son Andrew is now the Managing Director and has the same passion for what the firm does, and the same commitment to the traditional values that have turned Taplin into the success story it is today.

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‘Still hungry for success’: Transforming a tenth-generation business in Germany

‘Still hungry for success’: Transforming a tenth-generation business in Germany

We’ve rarely had a case study from a business that’s reached its tenth generation, and only a tiny percentage ever make it that far. But the German firm, Carl Kühne GmbH & Co. KG is an outstanding example of how a family business can not just survive but thrive for over 300 years. So how have they done it? We asked Stefan Leitz, the current chairman of the management board.

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Protection, promotion, and posterity: The business of heritage in the UK

Protection, promotion, and posterity: The business of heritage in the UK

Blenheim Palace is one of the most spectacular buildings in the UK, and a World Heritage site. It was built to celebrate the battle victory of the first Duke of Marlborough, and 300 years later is still the family home of the 12th Duke, which makes it one of the most enduring ‘family concerns’ we’ve ever profiled.

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Contact us

Peter Bartels

Global Entrepreneurial & Private Business Leader, Partner, PwC Germany

Tel: +49 40 6378-2170

Peter Englisch

Global Family Business and EMEA Entrepreneurial and Private Business Leader, PwC Germany

Tel: +49 201 438 1812

Siew Quan Ng

Asia Pacific Leader, Entrepreneurial and Private Clients, PwC Singapore

Tel: +65 6236 3818

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