The Most Important Strategic Decision Is Not About Strategy

By Prof. Enrique Soriano

Every strategic planning session eventually arrives at familiar questions. Which markets should we enter? Which products should we develop? How fast should we grow? These are important discussions, but after more than three decades advising family enterprises across Asia, I have come to believe that the most important strategic decision is made long before any of those conversations begin. It is whether the family has agreed on the future it wants to build together.

Following my previous article, several founders asked me the same question: “If a business plan is not enough, where should strategic planning begin?” Most expected me to talk about market expansion, digital transformation or competitive positioning. Instead, my answer surprised them. Before discussing strategy, a family enterprise must first agree on its purpose.

I was reminded of this while facilitating a strategic planning retreat for a successful second-generation family enterprise preparing for regional expansion. The management team had spent months evaluating market opportunities, investment requirements and financial projections. The numbers were compelling, and the proposed strategy appeared well-researched. Before we began discussing expansion, however, I asked each family member to answer one question privately: “What should this family enterprise look like 10 years from now?”

The responses revealed a reality that no market study could have uncovered. One sibling envisioned becoming a regional player through acquisitions. Another believed the priority should be preserving family wealth while strengthening the existing businesses. A third wanted to professionalize management and gradually reduce family involvement in day-to-day operations. The youngest admitted he had not yet decided whether he even wanted to build his career in the family enterprise.

At that moment, the discussion changed completely. The family did not have a strategy problem. It had an alignment problem.

After more than three decades working with and advising family enterprises across Asia, I have found this to be one of the most common discoveries during strategic planning. Families invest significant time analyzing markets, competitors and investment opportunities, yet devote remarkably little time to discussing the future they hope to build together. Expansion often becomes the priority before purpose has been established.

This distinction matters because every strategic decision ultimately reflects a family’s underlying aspirations. A family committed to long-term stewardship will evaluate opportunities very differently from one focused on rapid expansion or near-term liquidity. Neither approach is inherently right nor wrong. Difficulties arise when different family members quietly pursue different ambitions while believing they are working toward the same objective.

In many family enterprises, disagreements rarely surface during periods of stability. They emerge only when the business begins to grow, larger investments become necessary, leadership transitions draw closer or difficult decisions can no longer be postponed. Growth does not create these differences. It merely exposes them. That is why I have come to believe that the greatest value of strategic planning is not the document produced at the end of the process. It is the honest conversations that take place before the strategy is ever written.

Before discussing markets, products or expansion, every family enterprise should first ask itself a few fundamental questions. Why do we want to grow? What legacy are we trying to preserve? How much risk are we prepared to accept? What role should future generations play? Which responsibilities should remain with the family, and which should be entrusted to professional management? These are not simply governance questions. They are strategic decisions because they shape every major choice the enterprise will make.

One founder later told me that the most valuable outcome of our planning retreat was not the five-year strategic plan. It was discovering that his children had very different expectations for the future of the enterprise. Had those differences remained unspoken, the family might have spent the next decade managing conflict instead of creating value.

Markets rarely derail strategic plans.

Misaligned families do.

A business plan helps an organization manage today’s operations. A strategic planning process must first ensure that the family is united around tomorrow’s purpose. Only then can strategy become a powerful instrument for building not just a bigger business, but an enduring family enterprise.

Prof. Enrique M. Soriano is executive director of W+B Advisory Group. He is a fellow and mentor of the Singapore Institute of Directors’ Board Readiness Programme, a former World Bank/IFC governance consultant, and advises boards and multigenerational family enterprises across Asia on governance, strategy, succession and long-term stewardship.