1. Strategic Planning and the Closely Held Business Portal to the Future

2. Copyright 2003 SCA Sunshine I. “…(Strategic planning) comes as much out of the hearts of the principals of the company as it comes from their heads. It accepts that we don’t know what the future holds… yet the resulting strategy can guide the company in the face of uncertain internal and external events.” e. Michael Shays, CMC

3. Copyright 2003 SCA Sunshine Strategic Vantage Point  Altitude  Chronology

4. Copyright 2003 SCA Sunshine

7. The Business System, from an operating perspective The Customer Front Line Employees Middle Management Upper Management Executive

8. Copyright 2003 SCA Sunshine The Business System from a strategic perspective Global Business Realities Your industry Your Market You

9. Copyright 2003 SCA Sunshine Family and Business: wearing two hats Family: Financial Expectations Roles and skills Individuation Succession Relationships Implied contracts Non- business family members Customer #2 Customer #1

10. Copyright 2003 SCA Sunshine Business FamilyBusiness Customer Who is the Customer? Family Business

11. Copyright 2003 SCA Sunshine Family Owned Business* Over 24 million businesses. 90% are family owned 57% of GDP of U.S. (87% GDP of non- governmental entities) 30% per generation survive Often unidentified, misunderstood, underestimated, underutilized * A business where a family has strategic control of the business; where the company provides either wealth, significant income or significant contribution to the family’s identity (Joseph Astrachan)

12. Copyright 2003 SCA Sunshine Strategic Thinking 1 Where are we? 2 Where do we want to be? 3 How do we get there? Current Reality Differentiation Mission, Vision, ValuesOperating Criteria, Goals, Strategies

13. Copyright 2003 SCA Sunshine 1. The Current Reality What are the Internal strengths and weaknesses of the business? What are the External realities: opportunities and threats? Global realities Industry realities Market realities What makes us unique?

14. Copyright 2003 SCA Sunshine 2. What is our Vision for the Future? Why do we exist? What is our purpose? What do we most value? What is the likely scenario that would enable us to differentiate ourselves in the future marketplace?

15. Copyright 2003 SCA Sunshine 3. How will it happen? What criteria will we use to measure against our Mission and Values? What strategies and actions will we take? Who is responsible? When do we expect it to be accomplished?

16. Copyright 2003 SCA Sunshine The House: How it stacks up Strategies Goals Operating Values Criteria: Rules for Engagement Mission, Vision Organizational Structure

17. Copyright 2003 SCA Sunshine Mission : Why the company exists Vision : The future state of the business: what does it want to become?

18. Copyright 2003 SCA Sunshine Values Underlying, agreed-upon assumptions about what is important Mission and Vision

19. Copyright 2003 SCA Sunshine Values Mission and Vision Operating Criteria Ways in which the organization will behave in accordance with its values

20. Copyright 2003 SCA Sunshine Structure Picture of how the organization will be designed to service its customers. Includes roles and internal service relationships Values Mission and Vision Criteria

21. Copyright 2003 SCA Sunshine Structure Values Mission and Vision Criteria Goals : Statements targeting future intentions in areas such as financial, operational, human resources, communications, leadership Strategies : Ways in which to reach goals. Activities, Timeframes, Responsible Parties

22. Copyright 2003 SCA Sunshine The Process – Step I Preparation/Data Gathering Financial Market Customer Employee Family (if family owned) Involvement and attendance Retreat design Conduct retreat

23. Copyright 2003 SCA Sunshine The Process – Step II Identify and validate assumptions Ensure availability of resources Human Financial Technological Define measurements and process review Top level timeline Communicate the Plan

24. Copyright 2003 SCA Sunshine The End THANKS!

25. Copyright 2003 SCA Sunshine Family Strategy What are the family’s values and principals? How are they realized within the company? Within the family? What role does the business play for our family? What role does our family serve for the business? What works? Of what are we most afraid?

26. Copyright 2003 SCA Sunshine Family Strategy, continued How will we work together most effectively? What plans do we have for succession? What expectations do we have of each other? Of the business? What criteria will we use to make large strategic decisions for the business? How will conflict be managed? How important is sustainability?

27. Copyright 2003 SCA Sunshine Glossary of Terms Core Values: Underlying assumptions about what is important and how the business views the world Operating Criteria: ways in which the organization will behave in accordance with its values

28. Copyright 2003 SCA Sunshine Glossary of Terms Family Business: A business where a family has strategic control of the business; where the company provides either wealth, significant income or significant contribution to the family’s identity (Joseph Astrachan) Strategic vs. Operational Planning: Strategic is long term (3-5 year) planning. Operational planning is one year planning. Systems: “combination of parts in a whole; orderly arrangement according to some common law.”

29. Copyright 2003 SCA Sunshine Closely Held: What’s the difference? Size of company: revenues/employees Type of company: family owned/non- family owned Sponsorship, involvement Process, not delegated Integrated, whole system discussion

30. Copyright 2003 SCA Sunshine Challenges Overlapping, often conflicting interests Issues are magnified, visible Resistance can take different forms, surprises Management can be caught in the middle

31. Copyright 2003 SCA Sunshine SWOT Analysis Differentiation, competitive position Vision Values Criteria Goals Strategies Principles and Values Intentions and Goals Agreements Communication Expectations and roles Criteria for Decision- making Business StrategyFamily Strategy

32. Copyright 2003 SCA Sunshine How it worked The Founder The Girls Sheltered workshop The family office

33. Thank You!

34. Copyright 2003 SCA Sunshine How do you go from…

35. Copyright 2003 SCA Sunshine 78 year old founder $100 Million Chemical Manufacturing Company Dad, CEO; Mom, President; Son VPHR; son scientist Founder Sabotage What’s management to do? What’s son to do? What’s mom to do?

36. Copyright 2003 SCA Sunshine To: 78 Year old founder International spokesperson Author of published articles Relevant member of senior management team

37. Copyright 2003 SCA Sunshine How do you go from…

38. Copyright 2003 SCA Sunshine Three disgruntled daughters Running a 5 Million wholesale distributor Attempting to dislodge father, the founder and claim their promised role

39. Copyright 2003 SCA Sunshine To: New Products, New Industry Co-President Daughters Dad and Mom leadership resources Spouses actively involved in the business Growing business concern

40. Copyright 2003 SCA Sunshine Because – The Question isn’t always the question Strategic Planning

41. Copyright 2003 SCA Sunshine Customer People Mission/Vision Strategic Plan Systems