How to Plan Strategy Over the Long Haul By JACQUELINE FOX Staff Reporter Got plans? According to a survey conducted earlier this year by the New York-based Raymond Institute, a not-for-profit group that provides training and other services to family-owned businesses, roughly 60 percent of 1,413 mid-sized family firms polled did not have a long term strategic plan. Yet, the survey also revealed 39 percent of those same respondents expect their current CEOs to retire in full or in part within seven years. That means many of those CEO’s have not chosen a family member to take their place, or considered how changes will impact current operations or the company’s plans for growth. This phenomenon is easily explained, says Wayne Rivers, president of the Family Business Institute, a consultancy in Raleigh, N.C., that is also family run. According to Rivers, the heads of small- to mid-sized family firms are often too consumed with running their businesses to think about planning for the future. “Most family-and closely-held businesses don’t believe in having a strategic plan,” said Rivers. “The older the generation involved at the top is, the truer the phenomenon. It’s the ‘what the hell do we need one of those for, we’ve never had one before and we’re doing fine’ mentality.” But according to the experts, every family-owned business should have some form of a long-term strategic plan, especially if family members are counting on carrying on the legacy. “At some point, every successful enterprise outgrows the entrepreneur’s ability to run it by his or herself,” said Rivers. “So, if there is no plan in place for, what we say, what the company is going to look like when it grows up, then they are headed for disaster.” A solid strategic plan, says Rivers, should include long-term goals for every department. It should consider future needs for technological upgrades, larger space and provisions for addressing shifts that will occur within the management team. And, says Rivers, it’s crucial that rank-and-file employees know what their company’s goals are as well, because they can’t support a vision they don’t understand. Sharing the vision That’s exactly how the folks at North Hollywood-based Bobrick Washroom Equipment Inc., see it. The family-run company, launched in 1906, publishes a “Blueprint for the Decade” packet for all of its employees, which outlines the company’s core values as well as its strategies and initiatives for the future. “We are a tiny industry,” says Bobrick’s President, Mark Louchheim, whose grandfather, William Louchheim Sr., served as the family’s first president in 1946. His father, William Louchheim Jr., joined in the 1960s and still serves on the board of directors. Louchheim said his father deserves the credit for establishing Bobrick’s first long-term strategic plan. Louchheim declined to give revenues nor would he say how many employees Bobrick has, but the company operates several national sales offices as well as four plants and distribution centers overseas. He says Bobrick’s plans include a wide range of factors and typically project out roughly 10 years. Those plans are also reviewed each year and altered according to market shifts and changes in foreign exchange rates, technology, legislation and even workplace trends and how those may impact hiring procedures down the line. “We spend a great deal of time looking at this from every level,” said Louchheim. It’s a creative process, and it’s one that we think needs to include the people who really need to know what’s going on, and that’s the department managers and the people on the floor.” Rivers recommends hiring an outsider who can both analyze and strategize for the company from a distance. “Every family business thinking about strategic plans should look for a quarterback who can do a turnkey job,” said Rivers. “But they should look outside if they can afford it, because a family member running a company, who can do that with the same degree of effectiveness, is a rare bird.” Planning Tips How to create a strategic plan. – Start now, even if you’ve been in business for years and don’t have one. – Create a plan that accounts for future needs of every single company department. – Let your employees, as well as your management team, in on the vision. – Think big. Consider advances in technology, market shifts, employment trends and even legislation changes when establishing long-term goals. – Consider hiring an outsider to help you craft the plan. – Contain the planning process to short spans of time. Family Forums Women’s Work The Family Business Center at Cal State Northridge will sponsor a panel discussion Thursday, June 19 at 7:30 a.m. titled “The Role of Women in the Family Business.” The event, part of the center’s ongoing series of roundtable discussions on issues pertaining to family-run companies, will be held in the University Club near the corner of Dearborn Street and Zelzah Avenue. Panelists are: Carol Davis, founder of Davis Research, Nancy Gump, special events manager of Andy Gump Temporary Site Services and Daniela Meltzer, chief operating office Coptervision. For more information, call the center’s Director, David T. Russell at: (818) 677-2438. Leadership Seminar Glendale-based Doud Hausner Vistar, Strategic Family Business Advisors, is hosting a four-part Leadership Program for Family Businesses which will focus on issues impacting individuals preparing to take over management positions inside their family-run firms. The Tuesday evening sessions will be held from 6 p.m. to 8:30 p.m. at DHV’s offices at 100 N. Brand Blvd., 6th floor. The cost for the series is $995. For more information call Ed Cox: 539-2267.
