People often ask me what I mean by "strategic planning" for families. When we think of families and individuals we talk about financial planning, estate planning, coaching, and wealth planning, but not strategic planning. Strategic planning is normally associated with businesses and organizations. Organizational planning is seen as the purview of consultants and focused on planning techniques and methodologies that are unique to organizational dynamics. Family wealth/estate planning is viewed as more subjective and driven by tax considerations. When it comes to closely held businesses and the families that own them, I believe that (1) from a strategic planning perspective where wealth is defined beyond financial assets, it is not possible to segment the business from the family and its wealth, and (2) accordingly, the planning methodologies for the family and the business must be, at their core, unified.
A closely held business is often the single most important aspect of a family's financial wealth or the generator of that wealth. Beyond financial wealth, a business or portfolio of businesses are often the crucible in which the family's character and values are defined. This is particularly true for the families that have been successful at building a business and a functioning family. The interplay between business and family life in successful families is natural where the mission, values, and vision of the business and the family are cohesive and mutually reinforcing. If one defines success in life as more than financial success, the strategic vision of the business must contemplate and accommodate the needs of the family (and/or the community, the workers, charities or any other areas that are important to the individuals involved). If we stay in the traditional model where financial wealth is the only factor in defining a wealthy life, the planning work is fairly straight forward: maximize the balance sheet and the income statement and minimize taxes. In this model it is easy to segment business from family.
If, on the other hand, we view wealth as including a broad range "hard" and "soft" assets, such as relationships, health, community, faith, family, etc., planning for the business without considering the family, or vice a versa, makes no sense. A full life is a series of trade-offs in order to achieve a personal level of balance. When we talk about "having it all," that only makes sense with regard to achieving a balance that the individual views as optimal and possible. If we devote all our energy and resources to one aspect of life we might (or might not) achieve amazing things in that area, but most often at the expense of other aspects of a more complete life. We see this throughout our society with regard to athletes and entertainers, who are praised in their youth for their singular devotion to their craft and find life to be rather empty when the applause stops and the money starts to dwindle.
For a closely held business, strategic planning that is segmented (i.e., planning that considers the business alone without the underlying financial, personal and familial issues of the owner(s)) will tend to produce plans that maximize the commitment of time and resources to the business over other potential considerations. When the business owner starts to implement the plan, he or she finds themselves in a position of having to make an uncomfortable choice between the success of the business plan and the other parts of their lives that provide value and meaning. Our view of how to address this dichotomy is by applying the same techniques of strategic planning to the business and the family. By identifying the values and vision that motivate personal and business lives, we can help the business owner determine where potential conflicts exist and discuss how to address these issues. Nowhere is this more critical than with regard to business succession planning. Without an open and honest multigenerational discussion of values, goals and visions, a business succession plan has limited long term prospects for success.
From the perspective of a family, the business, the personal, the communal, and the private should form a cohesive whole. If they do not, there are generally signs of imbalance; evidenced by strained or fractured relationships. Strategic planning should attempt to address all aspects of the family and business in a holistic fashion. Only then can we help people achieve the true success associated with a balanced life.