As presented during the family business conference last week, one about one third of family businesses in Malta have a written strategic plan which is regularly reviewed. This statistic then changes depending on the level of corporate governance found in family businesses. Those family businesses with a board of directors that include independent non-executive directors, see the percentage of family businesses that have a written strategic plan shoot up to 52%. Whilst only 15% of those family businesses having no functioning board of directors, have a written strategic plan.

Many family businesses get lost into what they need to do to start formulating a strategic plan. Some think it is way beyond them and hence never get down to doing it. I will try to simplify things by putting forward these 4 steps.

1. The start is data. The first step for strategic planning requires a wealth of data and information about competitors, customers and market dynamics and some own good judgment and that of other executives and advisers — developed over many years of experience. This data needs to be analysed. There is also an element of data that is not just numbers, but data or should I say information, with regards how things “happen here”. Finding time to having a look at all this, will start ‘opening your eyes’ to the huge single points of failure and inefficiencies in the way you operate, that are draining the business.
2. Link all this data together to generate a coherent story and a link between all data points. Doing this should start generating some strategic options. You should then link your strategic options to your company’s purpose or goals. Which strategic option is likely to help you achieve your goal, when considering all risks?
3. Then when choosing your way forward and hence your strategic option, do explain to your employees, why you went for it and what where the rejected alternatives. Explaining why not can often help you explain why. In presenting a strategy, therefore, you can also present the alternatives considered and explain why they were not adopted.
4. Involve employees in strategy development. Employee participation and inclusion in the strategy process can take many forms, from simply soliciting ideas and feedback through to active participation in strategy workshops and testing of new strategic initiatives. As strategic dialogues deepen, more employees will get involved, and with their involvement comes a greater shared familiarity of the context in which the strategy is developed.

I cannot stress enough the importance of devoting time to look at the big picture. I see many family businesses working harder, many times flat out, just because they are not seeing the bigger picture and hence thinking that the are passing through a rough patch and thus they need to work harder to push things through. Many family businesses, actually require someone to have a look at all the things effecting the business, but out there and how things ‘happen here’ within the business and join the dots. The end result will likely show that the business needs to work smarter and not harder. You basically have a strategic plan.