All together now: strategy mapping for
family businesses
Michael Braun, Scott Latham and Emily Porschitz
Michael Braun is
Associate Professor at
School of Business
Administration, University
of Montana, Missoula,
Montana, USA.
Scott Latham is Dean and
Associate Professor at
Manning School of
Business, University of
Massachusetts, Lowell,
Massachusetts, USA.
Emily Porschitz is
Associate Professor at
Department of
Management, Keene State
College, Keene, New
Hampshire, USA.
DOI 10.1108/JBS-12-2014-0154
Introduction
Across the globe, family businesses contribute, on average, 80 per cent of GNP while also
employing the majority of the work forces in almost all nations (Family Firm Institute). The
ubiquity of the family enterprise is reflected in the US market as well, where 95 per cent of
businesses are owned or managed, or both, by a family. Even among publicly traded
companies, family businesses, large and small, make up 30 per cent of the S&P 500,
including Ford, News Corp. and the world’s largest private employer, Walmart. In view of
just a handful of statistics, the importance of family business to the global economy cannot
be overstated.
There is recent evidence that family-owned companies outperform their non-family
counterparts, driven in large part by what is commonly referred to as “familiness”, or the
unique interactions between the family sphere and the business sphere (Habbershon and
Williams, 1999). Underlying this potential for competitive advantage are the family’s culture
and values they infuse throughout the organization, the trust and commitment it prioritizes
in stakeholder dealings and its pro-active and disciplined approach to weighing both
financial and non-financial goals. But what are the consequences when the two spheres
collide? That is, what happens when family members do not find themselves on the same
page as to the purpose and direction of their business? It is in these situations that the
family enterprise sets itself on a trajectory toward extinction. With just 10 per cent of family
firms successfully transitioning to the third generation, how the managing family can
secure its legacy remains one of the trickiest challenges faced by family-owned
businesses (Stalk and Foley, 2012).
In our collective experiences working with family businesses, we have witnessed
malfunctions and even failures in strategic implementation when family members’ wants
and needs diverge. To help owning families maintain their firm’s competitive advantage, as
well as smooth the path toward long-term prosperity, we introduce a simple yet effective
strategic mapping tool. Drawing on Kaplan and Norton’s popular conception of strategy
maps in balanced scorecard designs, we made modifications tailored to family-owned
firms specifically addressing potential misalignments among family members’ priorities and
between family and business objectives. Our modified family enterprise strategy map
(FESM) aims to get stakeholders in the family business on the same page with respect to
their strategic objectives.
We identify three distinct benefits of using the FESM. First, having family members as well
as non-family managers engage in this activity can make individual, family and non-family
functions, intentions and goals more explicit. In doing so, the FESM also effectively
highlights divergent interests among and between various internal stakeholders that may
otherwise go unnoticed or unsaid. Second, mirroring conventional strategy maps, the
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JOURNAL OF BUSINESS STRATEGY PAGE 3
 ‘‘. . .what happens when family members do not
find themselves on the same page as to the
purpose and direction of their business?’’

FESM draws management’s attention to specific family-related resources and capabilities

already existing within the company and, just as importantly, those that need to be
cultivated for efficient and effective strategic implementation. As such, the FESM functions
as its own set of strategic priorities centered on the family domain, yet linking directly to the
business domain of the overall organization. Third, the FESM can serve as a valuable
reminder during those times when the family system begins to malfunction or to deviate
from business objectives. In fact, the FESM may even function as a decisive charter to
clear up confusion concerning stakeholders’ roles and responsibilities within the
organization. Before delving further into the FESM and its dynamic features, however, it is
useful to first revisit the fate of Mondavi Winery, the pioneer of the American wine industry,
to illustrate the destructive consequences arising from strategic misalignments between
family and business agendas and to demonstrate how the FESM can be used to prevent
those consequences.

In vino veritas
If there is one company that can be credited with placing American wines on the world
map, it is surely Mondavi Winery. Born in the 1960s from feuding brothers, the Mondavi
Winery was older brother Robert’s embodiment of New World wines to rival Europe’s finest
vintages. Early on, Robert introduced modern technologies to traditional wine-making
techniques, with the resulting product quickly building a name not just for the vineyard but
for Napa Valley as a region as well. By the late 1970s, Mondavi’s reputation for innovation
and excellence drew the attention of one of France’s most prominent and established
producers, Chateau Mouton Rothschild, whose ensuing joint venture resulted in Opus
One, a limited-production winery occupying the high-end price category. In 1993, as the
Mondavi Winery prepared to go public, its brand was synonymous with the best that
California wines had to offer. Indeed, for Robert Mondavi and his two sons, Michael and
Tim, the sky was the limit.
A mere decade later, Mondavi Winery was in trouble, as sales slumped and profits
dropped into negative territory for the first time since the 1993 initial public offering. In
2004, Robert Mondavi was forced to let go of his namesake company, selling it to
beverage giant Constellation Brands for just over US$1 billion. The deal abruptly ended a
dynasty that had brought global prominence to what once was a mere cottage industry in
the USA.
While the press initially chalked up Mondavi’s selling out to a loss of competitive footing in
an increasingly crowded marketplace, additional details would soon emerge. In recent
years, Mondavi had been fraught with dissention among Robert, Michael and Tim
concerning the company’s strategy. On one side, co-CEO Michael favored growing the
vineyard’s so-called “lifestyle” brands, or its lower-end wines that sold into mass-market
outlets. Across the table, Chairman Emeritus Robert and Tim, his younger son and also
co-CEO, were intent on maintaining Mondavi’s reputation of luxury and innovation which
had brought the company to prominence in the first place. It was only a matter of time until
these two irreconcilable strategic approaches – high-volume, low-margin versus low-
volume, high-margin – threw the Mondavi Winery into disarray. In trying to play both a cost
leadership and differentiation strategy concurrently,

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Mondavi would fall victim to what strategist Michael Porter once dubbed the “stuck in the
middle” trap.
If only the Mondavi story could serve as a cautionary tale rather than a common episode in
family businesses. Within the alcoholic beverage industry alone, giants including brewing
pioneer Anheuser Busch and sprits producer Seagram’s met with similar fates. At the core
of what brought all three of these venerable brands to their knees was the ruling families’
failure to pay heed to the distinct yet inextricably intertwined strategic priorities of family
and business. To help bring necessary balance to the family and business spheres in
family-owned enterprises, we put forth the FESM by briefly revisiting the basic precepts of
conventional strategy maps.

The FESM
Since its introduction over a decade ago by Robert Kaplan and Norton (2004), the strategy
map has found widespread application across companies large and small. Much of its
managerial appeal is derived from its format: a one-page visual representation detailing
the strategic architecture needed to realize an organization’s strategic intent. While at first
glance, the activity of strategy mapping may seem simple, it is far from simplistic: both at
the individual and team level, participants are prompted to systematically tease out four
distinct perspectives. The four perspectives are: financial, customer, internal process and
learning and growth perspectives. Aside from drawing management’s attention to the
content underlying each perspective, as well as how the perspectives reinforce one
another, the strategy map also helps to communicate the organization’s strategic priorities
throughout its ranks. Kaplan and Norton maintain that the odds of successfully
implementing a strategy increase considerably, the tighter the alignment between those
four perspectives.
While families can rely on traditional strategy maps to attend to the business side of their
affairs, they are insufficient in addressing the complexities of the other side of their
company: the family domain. Issues including the family’s intentions with the business;
individuals’ professional and personal ambitions and priorities; as well as processes,
resources and capabilities arising from the family’s involvement in the business fall outside
the structural scope of a conventional strategy map. To address this shortcoming, the
FESM can be used to begin to address the strategic priorities of the family. As a
supplement, not a substitute, to traditional strategic mapping, family enterprise strategy
mapping should be used, initially, to shift focus to the family’s strategic objectives,
subsequently linking them to the strategic objectives of the business. In doing so, the
stability between family and business spheres should be enhanced, thereby safeguarding
the long-term health of their enterprise.
As in a conventional strategy map, the FESM starting point involves choosing an
overriding objective for the organization. Indeed, this mission statement should be the
same as the one headlining the strategy map. In this way, it affords a guiding “northern
light” to bring into line the two maps upon completion of the exercise. Where the strategy
map and the FESM differ, however, is in the four perspectives that have been altered to
reflect potential strategic priorities of a managing family. These perspectives of the FESM
are as follows: family business objectives, family alignment, family systems and family
business foundation. Table I demonstrates the FESM’s modifications made to the
perspectives from conventional strategy maps.
By first shifting the perspectives squarely on the family domain, we subsequently
developed areas of focus for each perspective. Figure 1 presents the completed FESM.

Family business objectives

The topmost perspective brings to the forefront the business family’s principal agenda with
regard to its enterprise. Is the family chiefly concerned with maintaining control? Should the

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 Table 1 Extending the strategy map into the family arena
Traditional strategy map Family enterprise strategy map

Perspective 1
Financial Family business objective
Details the bottom line Communicates the family members’
objectives and measures required intent with regard to the company’s
to increase shareholder value future direction

Perspective 2
Customer Family alignment
Describes value proposition and Gauges internal stakeholders’
how value is created, captured professional and personal priorities
and delivered and risk appetites

Perspective 3
Internal process Family systems
Captures critical organizational Focuses on systems, structures and
activities necessary to deliver on activities needed achieve objectives
customer value proposition and support internal stakeholders

Perspective 4
Learning and growth Family business foundation Identifies
Defines core competencies, the building blocks of “familiness”,
skills, technologies and culture to the set of unique resources,
support organization’s strategy capabilities and networks

family begin to put in place a plan and process for eventual exit? Or it may be time to invest in
expansion outside its core business. While goals such as growth and profitability may be
straightforward and immediate, others, including preparing the next generation for taking over
the business, can be more complex and long-term in nature. Moreover, the family may find
some goals complementary, whereas others are incompatible and require certain tradeoffs. By
evaluating its various options, the family can begin to address its current position and give
priority to those objectives that can help the business flourish. Finally, by

Figure 1 The FESM

Family Business Mission Statement

“____________________________________________________________________________________________________________________________”

Profitability Growth Longevity Diversification Leadership Transition Control Exit

LEVEL OF ALIGNMENT
HIGH - MED - LOW
Family Members Managers
Owners
Professional Personal Risk Profile Professional Personal Risk Profile
Professional Personal Risk Profile

Training & Education Communication & Relations Roles & Accountability Motivation & Compensation Risk Management

• ____________________ • ____________________ • ____________________ • ____________________ • ____________________

• ____________________ • ____________________ • ____________________ • ____________________ • ____________________

Shared Values & Beliefs Brand Equity & Identy Skills & Capabilis Social Capital
• ____________________ • ___________________ • ___________________ • ___________________

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‘‘It was only a matter of time until these two irreconcilable
strategic approaches – high-volume, low-margin versus
low-volume, high-margin – threw the Mondavi Winery
into disarray. In trying to play both a cost leadership and
differentiation strategy concurrently, Mondavi would fall
victim to what strategist Michael Porter once dubbed the
‘stuck in the middle’ trap.’’

linking the family business objectives in the FESM with the financial perspective in the
strategy map, the family can begin to bring into balance its financial and non-financial
goals.

Family alignment
Decisions concerning which objectives to pursue are bound to be driven by the internal
stakeholder needs and wants, not merely by market demands. As such, the next level
attends to professional and personal agendas of immediate stakeholders with a direct say
in the overall direction of the business – family members, owners and managers. In some
cases, these stakeholders may be separate, while in others, they may be one and the
same person. In all roles, however, teasing out professional from personal responsibilities,
pursuits and desires highlights major roadblocks that can prevent the successful pursuit of
family business goals. For example, a non-managing family owner’s personal ambitions
outside the family enterprise may involve decreasing his or her holdings in the firm while
also reducing daily involvement in the company. A different scenario may find family
managers seeking to increase their leadership role in the firm and requiring the support,
guidance and mentorship from other family members. Or, a non-family manager may want
to garner additional decision-making responsibilities in the firm, potentially encroaching on
the duties of a family member.
Beyond drawing attention to the professional and personal wants and needs of
stakeholders, the FESM also probes their risk profiles with regard to the business.
Academic research on risk-taking in family businesses shows that they display notably
different propensities for risk, in part due to non-financial goals and objectives, including
organizational longevity, generational succession and the preservation of the family’s
reputational capital (Zahra, 2005; Braun and Latham, 2009). These risk profiles, in turn,
have a direct influence on the level of investments in a firm’s strategic activities, including
capital expenditures, product or market expansions and innovation, among others. Yet, a
lack of clear consensus around the amount of risk stakeholders are willing to take can lead
to a stalemate in decision-making, possibly placing the family business on a path toward
stagnation. To help avoid this potential tripwire, the FESM encourages crucial
conversations around buried sources of dissonance risk among the various stakeholders
and, in turn, attempts to bring those risk disparities in line with the firm’s overall strategic
objectives. Once a high level of alignment has been achieved among the stakeholders, the
discussion can move to the next perspective.

Family systems
This perspective solicits the following questions: Which of the firm’s systems currently
facilitate the top-level family business objectives? Are the company’s internal activities
sufficient to support stakeholder needs and wants? What processes need to be improved,
developed or formalized to help fulfill the overarching aspirations of the

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 family business? The five topical categories represented in the FESM are by no means all-
encompassing, but they do begin to address some of the firm’s critical internal practices
and procedures needed to produce tangible outcomes. For instance, a family business
whose primary objective is cultivating the next generation of leaders must dedicate the
time and resources to training and education. This leadership training may be through a
rotational management program. It may also entail engaging outside advisors to help
leaders with building professionalization and stewardship skills. On the other hand, if
growth and profitability take priority, roles and accountability and their related
compensation structures may need to be revisited. Or, if the family is intent on exiting the
business, the focal discussion may be around effectively communicating this intent to
internal and external stakeholders and understanding the risks involved in the divestiture.
Just as internal processes need to be instituted in conventional strategy maps, the FESM
encourages the formalization of, oftentimes, informal systems and related activities in the
family business.

Family business foundation

The family business foundation consists of the distinctive set of resources that represent
the foundation of any business and allow it to thrive. In the case of family enterprises,
“familiness” captures the unique interactions between the family and the business,
manifested in the shared values and beliefs of the organization, thus creating a unique
organizational culture (Sirmon and Hitt, 2003). Because the family’s identity and reputation
are inextricably tied to the brand equity of the business, family businesses can pursue
unique branding practices, as in the case of S.C. Johnson: A Family Company. With
regard to skills and capabilities, family members often possess deep and specific tacit
knowledge because they are exposed to the enterprise in both their professional and
personal lives. Finally, a family firm’s strong social capital, or network, can facilitate more
effective relationships with suppliers, financial institutions and customers. When reaching
this perspective in the FESM, it is essential for management to take stock of the
company’s sources of advantage, to what extent they reinforce one another and also to
detect potential gaps for achieving its desired outcomes.
To make the most of the FESM tool, family businesses should remember that it is best
used collectively and iteratively. That is, by gathering decision-makers around the table
and working in unison through the four perspectives of the FESM, many of the challenges
and opportunities facing the business should become readily apparent. Participants
engaged in this analysis need to cycle through the FESM multiple times to ensure proper
alignment between the elements within the perspectives, among the four perspectives, and
with the overarching mission statement of the family business itself. As with all maps or
plans, the FESM should not be set in stone, but rather revisited with frequency to verify
that the objectives and their related perspectives remain timely and relevant.

Conclusion
According to a study from consulting firm Accenture, the next few decades will witness a
generational wealth transfer of over US$30 billion, with a significant amount of this

‘‘While goals such as growth and profitability may be

straightforward and immediate, others, including
preparing the next generation for taking over the
business, can be more complex and long-term in nature.’’

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 ‘‘According to a study from consulting firm Accenture,
the next few decades will witness a generational
wealth transfer of over US$30 billion, with a significant
amount of this wealth tied to family businesses.’’

wealth tied to family businesses. To avoid Mondavi’s fate and instead secure their legacies
to future generations, family enterprises can turn to the FESM as a starting point. While we
will never know if the Mondavis could have avoided losing their family business, a
systematic evaluation using the FESM framework may have provided the family
indispensable insights on how to retain control and ensure its legacy across many more
generations. For one, the incompatibility of Michael’s desire to grow the business into a
high-volume, low-margin juggernaut with Tim’s intent to migrate up-market into lower
volume, higher margin territory would have become readily apparent. Likewise, an
assessment of their professional and personal wants and needs may have shown two very
different aspirations for these co-CEOs: Michael’s desire to lead the company and Tim’s as
craftsman behind the label. Underlying these aspirations were also diverging risk
appetites, with Michael pushing to take the company public and Tim resisting, fearful that
resulting growth expectations would erode the quality of the wine. The misalignments in
the family business objectives and family alignment perspectives reflected also in family
systems, where the absence of clearly defined roles and decision-making domains
coupled with deficiencies in leadership training and communication skills hastened the
company’s internal breakdown. From the perspective of the family business foundation,
Robert Mondavi built an empire by taking on Old World wineries and pioneering new
techniques, engaging grassroots marketing campaigns and creating a dynamic,
competitive yet cooperative wine-producing region in Napa Valley. By revisiting Mondavi’s
roots, leveraging its unique resources and capabilities and drawing on its extensive social
capital and goodwill, management may have had much more clarity about the company’s
strategic opportunities and its limitations.
Keywords:
Alignment,
Strategy maps, For family businesses, as for their non-family counterparts, strategy requires successful
Strategy, implementation. However, family firms face an additional hurdle in having to align the goals
Implementation, of the business with the priorities of the governing family. The FESM can be a valuable tool
Family businesses, to get family managers on the same page, helping to ensure the company’s long-term
Familiness viability across generations.

References
Braun, M. and Latham, S. (2009), “When the big ‘R’ hits home: governance in family firms during
economic recession”, Journal of Strategy and Management, Vol. 2 No. 2, pp. 120-144.
Habbershon, T.G. and Williams, M.L. (1999), “A resource-based framework for assessing the strategic
advantage of family firms”, Family Business Review, Vol. 12 No. 1, pp. 1-15.
Kaplan, R. and Norton, D. (2004), “The strategy map: guide to aligning intangible assets”, Strategy &
Leadership, Vol. 32 No. 5, pp. 10-17.
Sirmon, D. and Hitt, M. (2003), “Managing resources: linking unique resources, management, and
wealth creation in family firms”, Entrepreneurship Theory & Practice, Vol. 27 No. 4, pp. 339-358.
Stalk, G. and Foley, H. (2012), “Avoid the traps that can destroy family businesses”, Harvard Business
Review.
Zahra, S. (2005), “Entrepreneurial risk taking in family firms”, Family Business Review, Vol. 18 No. 1,
pp. 23-40.

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 Further reading
Gordon, G. and Nicholson, N. (2008), Family Wars: Classic Conflicts in Family Business and How to
Deal with Them, Kogan Page, London.
Siler, J.F. (2008), The House of Mondavi: The Rise and Fall of an American Wine Dynasty. New York,
Gotham Books, New York, NY.

Corresponding author
Michael Braun can be contacted at: michael.braun@business.umt.edu

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