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Strategic Planning for the Family Business To our families, who daily remind us of the importance of balancing love and work Also by Randel S. Carlock: The Need for Organization Development in Successful Entrepreneurial Firms Also by John L. Ward: Creating Effective Boards for Private Enterprises: Meeting the Challenges of Continuity and Competition Keeping the Family Business Healthy: How to Plan for Continuing Growth, Profitability and Family Leadership Strategic Planning for the Family Business Parallel Planning to Unify the Family and Business Randel S. Carlock and John L. Ward © Randel S. Carlock and John L. Ward 2001 Softcover reprint of the hardcover 1st edition 2001 978-0-333-94731-9 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 0LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their right to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2001 by PALGRAVE Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE is the new global academic imprint of St. Martin’s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN 978-1-349-42661-4 DOI 10.1057/9780230508750 ISBN 978-0-230-50875-0 (eBook) This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Carlock, Randel S., 1948– Strategic planning for the family business : parallel planning to unify the family and business / Randel S. Carlock and John L. Ward. p. cm. Includes bibliographical references (p. ) and index. ISBN 978-1-349-42661-4 1. Family-owned business enterprises—Planning— Handbooks, manuals, etc. 2. Businesspeople—Family relationships—Handbooks, manuals, etc. I. Ward, John L., 1945– II. Title. HD62.25 .C37 2000 658.4’012—dc21 Editing and origination by Aardvark Editorial, Mendham, Suffolk 10 9 8 7 6 5 4 3 2 1 10 09 08 07 06 05 04 03 02 01 00–048298 Contents List of Figures ix List of Tables xi Preface xii Acknowledgments xviii PART I Understanding Family Business Planning 1 The Importance of Planning for Business Families SUMMARY 3 5 8 10 12 17 19 22 The Parallel Planning Process 24 THE INFLUENCE OF LIFE CYCLES ON FAMILY BUSINESSES 24 28 32 33 39 42 47 THE CHALLENGES FACING FAMILY BUSINESSES BALANCING FAMILY AND BUSINESS DEMANDS THE NEED FOR FAMILY BUSINESS PLANNING THE BENEFITS OF FAMILY BUSINESS PLANNING THE PARALLEL PLANNING PROCESS THE OBSTACLES TO FAMILY BUSINESS PLANNING THE CHALLENGE OF CREATING A FAMILY BUSINESS LEGACY 2 3 STRATEGIC PLANNING AND THE FAMILY BUSINESS PARALLEL PLANNING FOR THE FAMILY AND BUSINESS SYSTEMS THE PARALLEL PLANNING PROCESS FOR THE FAMILY THE PARALLEL PLANNING PROCESS FOR THE BUSINESS THE SHARED FUTURE VISION OF THE FAMILY AND BUSINESS SUMMARY v vi Contents PART II Planning for the Family 3 Securing Family Commitment 51 UNDERSTANDIN