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Connecting the present with the future

A family business that fails to take current demands into account could find the odds of success stacked against it. Yet it is imperative not to let the pressures of the present derail the business from its path to its chosen future. Family business leaders therefore should arm themselves with a “zoom-out/zoom-in” approach that ties short-term actions to long-term goals.

Key questions to ask

Zoom out

  • What will our relevant market or industry look like 10 to 20 years from now?
  • What kind of company will we need to be 10 to 20 years from now to be successful in that market or industry?

Zoom in

  • What are the two or three initiatives that we could pursue in the next 6 to 12 months that would have the greatest impact in accelerating our movement toward that longer-term destination?
  • Do these two or three initiatives have a critical mass of resources to ensure high impact?
  • What are the metrics that we could use at the end of 6 to 12 months to best determine whether we achieved the impact we intended?

To accommodate a family’s long-term vision and position the family business to achieve its long-term goals, leaders should focus on a very limited number of initiatives to run in the very short term— in the next 6 to 12 months—keeping a close eye on progress. In doing so, an external perspective is paramount. Family businesses should resist the temptation to look at the future solely from their own point of view, and also consider what the future might look like from (for instance) a customer, supplier, or competitor perspective.

Business context: Keys to success in a family

In a family business, the success of both short-term initiatives and long-term strategies often depends on two factors: governance and communication. Effective governance systems can help facilitate communication among family members, aid decision-making and problem-solving, and help the business run smoothly over time.

Family business leaders should take the time to discuss long-view issues not only in every management meeting but also in family council meetings—either informal or institutional. These discussions should include creating clear plans for succession. Leaders should also consider diving deeper into specific objectives in these meetings every six months. Every family has different dynamics, and each will likely conduct these meetings in a different way. There are, however, several principles that can help all families have more effective conversations.

  • Openness | Set clear agendas that give all stakeholders an understanding of what points need to be addressed. Explicitly address underlying emotional obstacles, which are common in family businesses and can limit the ability to move forward in agreement. Above all, facilitate open discussions that allow each party to have their voice heard and recognized.
  • Boundaries | An open discussion needs parameters to be productive. Thus, the mechanisms for managing the meeting, such as who has the authority to direct the discussion, should be agreed upon in advance.
  • Seeking an outside perspective | Do not discount the importance of hearing fresh views from non-family directors, who can help family members see critical issues from an outside perspective. Take advantage of external advisors who can help discuss business goals without bias.

Family business leaders should take the time to discuss long-view issues not only in every management meeting but also in family council meetings—either informal or institutional. These discussions should include creating clear plans for succession.

IT’S ALSO WORTH stressing that succession planning is a vital bridge between the short term and the long term. Many family business leaders seem to perceive succession as an event that they would rather not acknowledge or deal with—yet an orderly succession can be crucial to keeping the business on track for both the immediate and the far future. Consider putting formal succession plans in place, not just in terms of ownership, but for the CEO position and other roles at that level. When the next generation does take control, the new leader should balance the legacies and traditions of the past with the challenges of today and tomorrow. Simply having the intention to hand down the company to family members is not enough to ensure a business’s longevity. Many successful businesses can fall prey to fast-changing markets that no longer permit traditional approaches. For family businesses, remaining competitive means translating their vision for the future into a solid plan for action—and executing that plan with the vigor and commitment that have always characterized the family business.

For family businesses, remaining competitive means translating their vision for the future into a solid plan for action— and executing that plan with the vigor and commitment that have always characterized the family business.

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