How is strategic planning handled in a family business?
Family business strategy comes from the owners at the table. In contrast to public companies, wherein boards must make conservative assumptions about shareholder preferences, boards and management of family businesses can hear directly from the owners and take their unique preferences into account in formulating strategy. The family defines the vision, which management proposes, and the board evaluates, collaborates, and mediates. Whereas the board would be the final authority over strategy in a public company, the family has the last word in a family business. The family contributes to successful corporate strategy by forging a consensus view on the business’s direction and strategy, by educating itself on the issues facing the business, and by being watchful and ready to contribute to discussions of critical issues. The family can alleviate future stress for itself and for management by enunciating its tolerance for risk and its relative preference for profitability, growth, liquidit
