Do Your Strategic Plan Now

By: Prof. Enrique Soriano

ON BEHALF of the W+B Family Advisory Group, the event organizer ICON Executive Search and education partner, ExCED Institute, I want to personally thank all the participants who graced the 2nd W+B Family Business Conference titled, CAN FAMILY-RUN BUSINESSES LAST FOREVER: A Talk About Building 100 Year Old Enterprises, last August 31 at the Manila Marriott Hotel, Resorts World Manila. Thank you to Daily Guardian for the media support!

I hope that everyone found the conference informative and worthwhile. The primary goal of the forum was to bring together Governance leaders (Institute of Corporate Directors), Wealth Preservation and Risk experts (Deloitte and Bank of Singapore) under one roof to discuss multi-generational issues currently confronting 92% of family owned and managed businesses in the Philippines. Our objective was to share powerful strategies related to Family and Corporate Governance practices and inspire everyone by inviting a pragmatic Enterprise-founder/CEO and thought leader (Mr. William Tiu Lim) who willingly and generously shared his vision and legacy initiatives geared towards transforming the business he founded, Mega Global, to Centennial status (100-Year old).

Your presence helped to make this event a huge success, making it the biggest gathering of family business leaders in years!

 

Navigating a VUCA World and Strategic Planning 

It’s the time of the year where my governance work gradually intersperse with leadership and strategy engagements. The former focuses on creating a culture that breeds best practices  while the latter helps organizations navigate under a cloud of uncertainty known as the VUCA (Volatile, uncertain, Complex and Ambiguity) world. The other long term benefits in strategy formulation is to revisit its vision, pay homage to its core values and prepare the enterprise for long term growth.

According to a research paper by John Ward, co-founder and principal of “The Family Business Consulting Group, Inc., the term ‘strategic planning’ typically refers to the process of developing a business strategy for profitable growth. It is designed to create insights into the company and the environment in which the company operates. It provides a systematic way of asking key business questions.

Such an inquiry challenges past business practices and opens the way for choosing new alternatives. The result should be a well-prepared strategic plan—usually a written document—that spells out specific steps to improve customer satisfaction, increase profit, and revitalize and prepare the company for the next generation. The plan also states the chosen mission of the business, identifies the direction of future growth, and describes programs that can help to achieve that growth. It thus indicates ways in which the business can compete more effectively.

On the other hand, Jane Hilbert-Davis, founder of Key Resources, an international business consultancy based in Boston, defined strategic planning as simply creating a plan of action. Originally from the Greek roots, ‘STER’ which means to spread out, usually in a military sense, and AG to drive or to lead, the word ‘strategy’ conjures up images of preparing for battle, or competition.  It’s different from ‘vision’ which is a future imagined, a hope of how things can be in the ‘farther into the future’ horizon, 10-20 years from now.

A strategic plan describes how you can get there. It’s about making decisions in the present for the future and usually involves a 3-5 year time frame. It is both written and lived. It cannot be pieces of paper stuck in a drawer and forgotten, but must be thought through carefully.  It should reflect a flexibility and readiness to whatever the future may bring.

My intervention starts by profiling the current situation, employ financial, competitive or customer analytics and interview senior managers on what they see as key strategic issues facing the enterprise.  The interviews often uncover all sorts of business issues. But for family owned businesses, it can be expected that problems extend to personal issues such as uncertainty about succession, rivalries among family members, and discrepancies between position and performance.

 

The Powerful Benefits of Planning Ahead

In my years mentoring organizations, formal planning helps to prevent businesses from “undershooting” their strategic potential by articulating assumptions and perceptions. Planning encourages commitment from owners and key personnel as part of the process. It provides structure that helps managers assess the company’s rate of reinvestment and assure that the business is maintaining sufficient cash flow so it can move forward to a solid future.

The planning process increases business knowledge throughout the company and provides outstanding training for the offspring who are the successors and future leaders of the company. Planning provides one other key benefit. Because it requires the participants to answer tough questions about competition and reinvestment, the planning process helps all managers and family members to develop a common understanding—based on holistic assumptions—about the world in which the company operates.

To be continued…

 

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Prof Enrique Soriano is a Book Author, World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein Family Advisory Group, a research and consulting firm in Asia that serves family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila, and is currently a visiting Senior Fellow of the IPMI International School, Jakarta.