Strategic Planning: A Necessary “Evil” for Family Businesses by Neil Arnold Montesclaros

“Failing to plan is planning to fail.”

This modern-day proverb is widely attributed to Alan Lakein, the writer of several self-help books on time management from the 1970s onward. With this, none would argue on the importance and value of planning.  But how many really take this seriously?  How many people actually plan ahead?  How many truly fathom and appreciate its impact and implications?


The “Evil” of Planning

It involves anticipation and forecasting; it’s, for the most part, a cognitive and intellectual exercise; it can be mind-draining; it will take time; it will involve good data and information gathering; it’s getting the right people to do good planning; it’s about realistic time projection and time management, as one plots tasks and deadlines; one thing is to have a good idea and it’s another intelligence to actually estimate time frames for practical and quality execution.  A good planning involves good coordination as it gets executed and implemented.  It means efficient and effective communication.  Having a good idea, a good plan design, very grand, but not realistic, would have been a waste of all the mental processes done.  Who would want a plan destined to fail? Nobody wants to be frustrated in the end.

Having all this consideration in planning, who would actually be “inspired” to plan?  Hence, some people would not plan so that if some things work out bad, they could always console themselves that they didn’t have a plan anyway. Compare this to having a plan and it didn’t work; they would just feel frustrated and all the planning is a waste of time.  However, if one doesn’t plan and things just work out well, it’s a welcome unexpected bonus.  So why plan? Besides with a fast-changing environment, everything is volatile.

The hesitancy to undertake planning often results from fear that it’s an unfamiliar process; it may reveal confidential information; exposes weaknesses; uncover past errors and on-going issues.  Planning can make one vulnerable.

Furthermore, the commitment to planning is the commitment to execution and implementation.  All this imply change and effort.  Perhaps the greatest repugnance to planning is the association with change. People generally resist change even if the reasons are compelling.

Having a plan means you follow a path. It somehow restricts spontaneity, flexibility, and autonomy to do things on your own.  Commitment to a plan is to lose some kind of control because you made a decision earlier when planning.  Asking one to change and follow a pre-determined road would be daunting to many. Hence, many can see planning as a straitjacket that will constrain the instinctive adaptive skill and limit flexibility.

Planning is a way of giving up autocratic control.  The process of planning invites shared decision-making.  It’s actually sharing information and power.  This builds up collective accountability to each other when one plans with a team.

Considering all of the above, in this sense, planning is some kind of “evil”.  It’s hard work and does it really guarantee success? People, literally, drag their feet to do planning.

The Necessity of Planning

“The best way to predict the future is to create it.”  

This quote is credited to both Abraham Lincoln and Peter Drucker, two people known for their word of wisdom and lessons to live by. The general public is well acquainted with Lincoln; Peter Drucker is widely regarded as the father of modern management.  Coming from two intelligent great leaders and strategists, their thought is worthy of our attention and heeding.

Planning does not guarantee 100% success, but it increases your chances of success. It minimizes the probability of failure.  Planning is a mathematical probability. It’s both factual and intuitive that a team or individual competing in any sport, who has prepared and plan, has greater chances to win against an opponent with no strategy and preparation.  Raw talent is not enough in a competitive environment.  While luck and fortune is a factor to consider, good planning mitigates the effects of a dynamic environment that may have negative tidings. Planning does not assure total victory but it prevents devastating and catastrophic failure.

Prevention is still better than cure.  The latter is costly, in the end.

Precisely because things can be unpredictable that planning is a savior.  In some parts of the world, it’s hard to tell whether it’s going to rain or not.  But it wouldn’t hurt to bring an umbrella.  “Hope for the best but prepare for the worst,” this has always been a wise adage. This is the essence of planning.  By anticipating scenarios, we are in a better position to adapt to any situation and win the day.

Planning is maximizing the power of the human mind.  Modern science is teeming with evidence of the creative and generative force of visualization.  Planning as an intellectual and cognitive process taps into the power of vision.  What we can hold in our mind, eventually we can hold in our hands.  Every great achievement and feat of humanity began with a dream, an ambition – it was in the mind.  Planning provides an opportunity to create and predict our future better.

Team planning encourages commitment from all members as a part of the process. Because planning requires involvement, it generates shared responsibility and accountability.

The process of team planning manages expectations of members better.  It will create a common level of understanding and a united mindset.

However, planning has a price tag too.  It demands energy, resources and time.  But all this investment is nothing compared to the risk and cost of losing almost everything due to poor planning or the lack of it.  Planning is a necessary evil to create a better tomorrow.


 Strategic Planning for Families in Business is a Unique Challenge and Process

John Ward, one of the great pioneers of family business consulting, discovered in the mid-80s of the primal importance of planning in family businesses.  In his classic study then, the high failure rates of family firms over time in his research is mainly caused by the following:

  1.    Limited human and financial resources
  2.    Negative role of family issues (conflicts and generational succession)
  3.    Lack of strategic planning


In fact, in his widely known book, Keeping the Family Business Healthy (1987), Ward prescribed practical ways of how family business owners should take advantage of analytical tools to plan for the continuity of their family firms – strategic planning.

However, strategic planning for family-owned businesses is unique and challenging. Most family businesses struggle to survive beyond the first generation.  Strategic planning has a special role in this pursuit.  Unfortunately, most business and management consultants don’t see and appreciate the uniqueness of family-owned businesses.  They treat them like any other organization; applying business and management theories and models “religiously” but indiscriminately.  Then it hits them, as they advise and serve family businesses, the progress is slow, they become ineffective, or they outrightly fail; yet they followed every textbook rule of thumb.  They seemed to have missed something out in dealing with families in business. They neglected to consider the family system in a family-owned business.  Whether they ignore the family influence, intentionally or not, they would likely discovery their solutions would be wanting.

The term strategic planning refers to the process of developing a business strategy for profitable growth. It is meant to derive insights into the company and the environment in which the company operates. It assumes that growth occurs only if specific steps are taken to encourage it.

Strategic planning, for it to help strengthen and extend the lifespan of a family business, has to be done both for the family and the business.

Strategic planning for family-owned businesses differs from planning for other types of companies largely because the family firm must incorporate family issues into its thinking….Family concerns and preferences can influence the choice of business strategy and often make the family reluctant to embrace formal goal-oriented discussion and decisions. Further, family considerations can limit the strategic aggressiveness of the family firm.

My research noted one important pattern among family firms that had not only survived but prospered: These firms had renewed or regenerated their business strategies several times over sixty years study.  They added new strategies to their past ways of doing business as market and competitive pressures required response…The successful family firms in our research pursued change continually.

I believe that the best way of both addressing the changing environment and of coping with shifting family circumstances and needs is through the strategic planning process that incorporates both.

John Ward


Family business must not only prepare a business strategic plan but consider the other dimension of having a family strategic plan.  This is the holistic approach in dealing with family-owned businesses.

The family plan spells out long-term personal and professional goals of family members.  It also establishes a process whereby family goals and issues can be explored at regular intervals.  Family strategic planning has four main questions:

  1.    Why is the family committed to perpetuating the business?
  2.    How does the family see itself and the company in the years ahead?
  3.    How will the family build or maintain strong relationships, resolve conflicts and work for harmony?
  4.    What are the specific steps required to accomplish the family’s personal and professional goals each year?


The answers to these are critical because in a family business, the owner shapes business strategy in ways that other companies do not need to consider. John Ward’s study demonstrates that family issues strongly influence the choice of business strategy in a family business: Family issues shape business judgment whether the fact that they do is formally recognized or not.

Doing strategic planning for the family and business and integrating them represents a special challenge for family business because the business and the family are highly interdependent. The business plan needs the commitment of the family owners.  That commitment would largely depend on the opportunities and prospects that the business planning will discover. Hence, the family cannot separate strategic business planning with family strategic planning.  Both have to be done in a connected and aligned way.

Here are important elements in the family system strategic planning:

–    Identify shared purpose and unified compelling vision as a family in business

–    Establish policies by developing a family constitution that covers leadership succession, employment, investment, and governance guidelines (to name a few) for the family multi-generational in perspective

–    Establish an ownership succession and asset protection plan

–    Career and financial planning for family members


Ideally, the family strategic planning should precede the business strategic planning.  There should be an alignment of both family and business systems as they create a roadmap for the future.

A good strategic planning for the business would include the following:

–    A relevant and inspiring vision-mission of the business

–    Identified strategic direction based on SWOT analysis with action plans using and integrating the

Balance Scorecard framework; making the business a competitive player in the industry

–    Organized human resource system capable of achieving the strategic directions

–    Leadership capability and competency building


Doing strategic planning for the family and the business is a necessary “evil” family-owned businesses must embark on, if they want sustainable growth and thrive for many generations.  Most family business owners and management and business consultants overlook the family system in the equation.

One cannot assess and lead family business in a purely business sense.  The porous boundary of the family and business will mutually affect each other; they are interdependent.

There are many challenges to sustaining a family’s emotional investment in an enterprise from generation to generation. Deliberate strategic planning is one key to success. It helps to create motivation that can sustain the family and business through inevitable differences in individual perspectives.  Good planning releases energy that the family can use to fulfill the dream of many family businesses: creating and sustaining a healthy family enterprise for the next generation.

John ward