Bridging the chasm between long- and short-term priorities can be a challenge for many family businesses. Those who wish to hand down control to future generations need to address the disconnect.

Family businesses tend to lean towards a long-term view that is rooted in shared values, vision and culture. But even though many of them strive to maintain family control, family ownership in itself doesn’t guarantee that a business will survive the decades. In the context of today’s rapidly and fundamentally changing business environment, simply having a long-term orientation is not enough. To thrive, family businesses also need to take relevant short-term action.

How can family business leaders achieve the right balance between the short and the long term—in the context of the unique family, marketplace and sociocultural dynamics that characterize the family enterprise? That’s the question that this study, Deloitte’s fifth annual global family business survey, explores by tapping into the views of hundreds of family-owned companies in four key areas: ownership, governance, succession, and strategy. While we found that just over one-half believe their organisations are fit for the future, we also found that many family businesses lack clarity in at least one of these four areas. For these businesses, it will be important to find ways to align stakeholder goals, develop a strategy that matches short-term actions to long-term priorities, and explore diversification to become sustainable for the long haul.

Especially interesting is that the long-term orientation of family businesses’ does not necessarily mean that their strategic plans look farther out than the five years typical of non-family-owned businesses. Indeed, of the 89 percent of respondents who said their companies had a strategic plan, 71 percent planned only for the next two to five years, and another 6 percent said that their plan covered only the single year ahead.

To help family-run companies connect the present to the future, we draw on a framework developed by Deloitte’s Center for the Edge that suggests a “zoom out/zoom in” approach to strategy development. This approach calls for leaders to envision what the market will look like in 10 to 20 years and what kind of business will last for the duration—and then to translate that picture into a few select initiatives to pursue in the next 6 to 12 months. Equally important to consider is developing a shared vision by aligning individuals’ goals with those of the enterprise, both financial and non-financial.

It’s also worth stressing that succession planning can be a critical bridge between the short term and the long term. Many family business leaders seem to perceive succession as an event that they would rather not acknowledge or deal with—indeed, only 41 percent of survey respondents said their business was ready for the future in terms of succession planning. Yet an orderly succession is often crucial to keeping the business on track for both the immediate and the far future.

Many successful businesses can fall prey to fast-changing markets that no longer permit traditional approaches. Yet alignment of vision and values is achievable for virtually any family business, provided they have the right discipline, governance structure, and communication practices in place. For family businesses, remaining competitive means translating their vision for the future into a solid plan for action—and executing that plan with vigor and commitment.

Read the full report, Long-term goals, meet short-term drive: Global family business survey 2019, for more. 

Darren Boocock, Head of Family Business, Deloitte Private