Mangaliso's "Dense-Pack" Strategic Planning Course
by Shel Horowitz
By his own admission, Mzamo Mangaliso tried to cram in an entire semester's worth of information into his hour and a half presentation at the June Family Business Center gathering.
Dr. Mangaliso, a popular professor at the UMass School of Management, began by talking about what it was like to grow up in a black business family in apartheid South Africa-where his family lost their business because of a crackdown on cross-border activities by blacks (many of his family's patrons came from Lesotho).
Then he moved on to the main topic: strategic planning for family businesses.
Planning, he believes, is one of four key activities in managing a business; the others are organizing, leading, and controlling.
For Mangaliso, planning revolves around four key questions: Where are we? Where are we going? What is the Environment? How do we get there?
These questions, though, can't be addressed in linear sequence. While in his model, evaluating the present is the first step toward planning the future, this look can't be taken without a sense of that future: a broad vision that can be distilled into a mission statement, which in turn yields specific goals and objectives. Once the goals and objectives are known, examine them through a SWOT analysis: Strengths, weaknesses, opportunities, and threats-and then make strategic choices based not only on the potential impact of these threats and opportunities, but also on their likelihood.
Vision looks at the big picture: sweeping, ambitious, clear, and enduring (though subject to periodic review). For instance, Southwest Airlines' vision is "to open up the skies to ordinary people."
Asking how to achieve the vision leads to making it concrete: a mission statement that describes the business's desired role and accomplishments and provides a measurement of future success. If the mission statement is truly integrated into the corporate culture, astounding things can happen.
A real life example: in 1982, Johnson & Johnson's decision to recall the entire stock of Tylenol, nationwide, after a poisoning scare. According to Mangaliso, this $1.1 billion decision "took six minutes"-because for decades, the company had taken its mission seriously of putting the customers first-ahead of employees, stockholders, and other interests. Following that reasoning, making the recall decision was almost automatic, despite its price tag. And that gesture was more than made up in renewed consumer confidence and a surge of new revenue. By contrast, another company facing quality problems scientifically analyzed the exact batches that had problems, and recalled only the affected goods; they enjoyed far less of a consumer rebound than Johnson & Johnson had.
Thus, if every goal and objective is set to support the vision and mission, and if these are reviewed regularly by managers, the entire planning process helps undergird the vision and mission. It becomes a part of the company's way of doing business, and eventually is integrated into everyday decision making.
Mangaliso believes it's important to define yourself broadly, to enjoy the largest number of opportunities. he cited Gerber as an example; it perceives itself not as a babyfood company, but as a provider of cradle-to-grave family services. Thus, as the population of young babies decreased after the baby boom, they were well placed to pursue other profit streams such as insurance.
For family businesses, planning issues are closely tied in with succession. By looking at fundamental issues-causes, not symptoms-CEOs can identify their appropriate successor. And it may not be the most responsible, the brightest, or the best educated. Ask, instead, "Who can carry the vision to the next generation."