Strategy development in family businesses: aligning owners, family, and company

Which three strategies run side by side in a family business?

Every family-run company has three levels that interact with each other and are rarely discussed together.

• The ownership strategy. What do the owners want from their assets? Returns, security, independence, growth, a sale in ten years. This question determines which corporate strategies are even on the table.
• The family strategy. Who from the family works in the company, under what rules, and how are those who don't involved? This is where the conflicts sit that later show up disguised as business issues.
• The corporate strategy. Where the company is headed in the market. This is the level everyone talks about, and it's the third one, not the first.

Work on the third one only, and you'll later face decisions that seem to come out of nowhere. They don't. Their reasoning sits one level up and was never said out loud.

Why does the process start with the owners?

Because the ownership question defines what's possible. A strategy that needs a capital increase in five years isn't workable if the family doesn't want outsiders in the shareholder group. That's not a matter of taste, it's a constraint.

Here's a scenario that comes up often: the leadership team spends months developing a growth strategy built on acquisitions. In the final presentation, the senior shareholder says he won't support debt above a certain level. The strategy is dead, and so are four months of work.

Getting clarity rarely takes long. Half a day with the shareholders is often enough, as long as someone asks the right questions. What costs time is avoiding that meeting.

How do you get the family and management around one table?

Separately first, then together. That's the single most important move.

The shareholders clarify their expectations among themselves, without the hired management in the room. The family then brings an agreed position into the joint meeting. Do it the other way around and the discussion turns into arbitration, with management mediating between family members. That damages their position permanently.

With multiple family branches, add another step: each branch clarifies its position internally first. Whatever goes unsaid in mixed groups comes back as a blockade once things get concrete.

What changes when a succession is coming up?

The sequence, and it runs against intuition. Many families settle the succession first and the strategy afterward. That's understandable, because succession feels urgent, and it regularly means the next generation takes over a company whose direction hasn't been decided.

The more solid sequence: decide the corporate strategy first, then align the succession with it. Because the strategy determines what capabilities the successor needs. A company betting on internationalization needs something different at the top than one betting on specialization in its home market.

And here's the uncomfortable part: sometimes the strategy work shows that the obvious in-family solution isn't the right one. That insight is valuable, and it's exactly why the sequence so often gets reversed.

Who facilitates when everyone in the room is related?

Someone from outside, for a reason that has little to do with method.

In a family group, every sentence carries a history. A facilitator has to be able to interrupt without it counting as taking sides, and to ask questions that stay unspoken between relatives. A family member can't do that, and the hired management shouldn't have to.

The same applies to advisory boards when they're staffed with people close to the family. A board member who has been there for twenty years is part of the history.

How do you capture the outcome so it sticks?

In writing, and shorter than you'd expect. What the shareholders decided fits on two pages: expectations for returns and distributions, position on debt and outside capital, rules for family members working in the business, time horizon.

This document isn't a contract and doesn't replace a shareholders' agreement. Its purpose is to let management know the boundaries within which it can decide without asking every time. Nothing else speeds up strategy work more over the following years.