As the 1st Blog Article for 2024, I would like to focus on strategic planning. You may recall that almost a year ago, we as EMCS, together with the Malta Chamber and the Family Business Office had presented a survey, which with regards strategic planning had shown the below situation:-

In many family business I meet I find one of these two situations. The first is that strategic planning is completely ignored and nothing is done on this front, as clearly outlined in the above survey result. The second, is that strategic planning ends up being a numbers game to conclude some sort of budget, where emotions run high and people defend their turf. In either case, the real value of what strategic planning is all about is not achieved. In my years of experience I have identified what are the two essential ingredients for proper and valuable strategic planning.

On one hand, the first ingredient is the rationale side of things, whereby there needs to be a process which includes data analysis and an external focus on what is happening and likely to happen to the market the business operates in. The other ingredient, equally important, is related to honest communication – an internal exercise whereby persons within the business are allowed a safe space whereby they can honestly and transparently speak their mind, on how they see the business developing and also pushes business leaders to have honest hard discussions that they have likely been avoiding.

The above two key ingredients are needed to have a strong foundation to then provide honest answers to the below key questions, which are at the very heart of strategic planning:-

1. Where are we now?
2. Where do we want to go?
3. What is a credible path to get there.

The main reason why most family businesses fail to even start going through a strategic planning process correctly is because they do not answer “Where are we now?” with real honesty about their strengths and weaknesses. In family business this becomes more evident as many times the strengths of their family business are often inherited rather than something they built themselves and so next generation business leaders may fail to fully understand and pinpoint their one true source of strength. The key to answering “Where are we now?” with a strategic mindset is to be embarrassingly honest about your core belief regarding strategy and the one true strength of your business. Here come some important questions that need an answer:

• What is the one thing that makes your business special?
• Is it your product? If so, is it the quality, the experience, or the price?
• Is it your marketing and sales setup? If yes, what is the profitability return linked to your marketing expense?
• Is it your level of service and care, before & after the sale?
• How special do you think your offering is to the market? Can you raise your prices by 10% tomorrow without losing much sales volume?
• Or is it just the case that your business was just at the right place at the right time?

This analysis also provides the other side of the coin. What are the things that you need to improve upon i.e. your weaknesses. One of the most common weaknesses I see in family business, is various bottlenecks or single point of failures. Nothing gets done if that person or the family business owner/s do not get involved. I will expand on this in my next Blog Article.

When asked “Where do you want to go?” most businesses will reply that they want to grow, which many times leads to the third question. Grow, but how? You want to grow market share by taking it away from the competition? Or are you looking at doing something completely different to attract new types of customers to your offerings?

I hope that by now I have convinced you as to why strategic planning matters. Ultimately strategic planning is about allowing the family business to be brutally honesty about itself. Honesty is a superpower that can propel things to a better future.

At, EMCS Academy, the very first two online workshops this year, in january 2024, will be about Business & Strategic Planning. Click HERE to read about them and to Register. These workshops are accredited by the Malta Institute of Accountants, in terms of the Accountancy Board’s CPE Scheme.

Moreover, in the unique accredited course for family business “Award in Leading a Family Business” there is a whole module that focuses on strategic planning in family business. Click HERE to read about this unique accredited course and to Register for the next cohort that will start in February 2024.