ERC's preferred partner, The Coughlin Group, recently posted an article series titled Close to Home, which discusses how family businesses need clarity of vision, mission, and values in addition to a focused business plan and a system to measure results. A summary of that series is below:
Focusing on the Family Enterprise, The Coughlin Group notes that in order to begin clarifying an organization’s vision, mission, and values, start by asking the right questions. In the first article in Close to Home, there is an emphasis on the importance of planning.
It is noted that “...it is the sense of connection and identity with family that drives their motivation for growth and prosperity. This can be an advantage when it comes to planning, since family businesses often have a long-term strategic outlook due to their owner’s motivation to create a legacy for generations to come.”
Planning for family businesses is crucial due to the potential effects on personal relationships. When a plan is set, this lowers the likelihood of miscommunications or misalignment of expectations.
In order to create clarity, answer these three questions:
- Why does this company exist?
- What are our core values?
- What are we building?
Part two of the Close to Home series discusses how important it is to focus behaviors for family business planning. The article mentions that “a business plan not only helps insure the financial viability of the family business—but perhaps more importantly—protects the family relationships.”
Once a business plan is created, “focusing behaviors is critical to the implementation.” By focusing behaviors, the management team is able to make decisions on how to dedicate their resources and time.
It’s also important for family businesses to define what game-changing initiatives will help drive the execution from the strategy. Without these game-changers, a capacity for sustainable future growth will be unlikely.
The third part of The Coughlin Group’s article series discusses how “putting a system in place to help family members measure results is critical to maintaining health, productive relationships within the business and family.”
This focus on measuring results in highly influenced by trust. When trust is lost it, it rattles the business and the family. To avoid this be sure to include clear and tangible measurements in the planning process.
Another noteworthy portion of the last leg of the article series is about building the system. The Coughlin Group states that “the first step for creating an effective measurement system is choosing a system to document and track the implementation of the business plan.” It is important to have a tracking system for the implementation process to avoid conflicts about accountabilities and commitments.