For each owner to agree with and support the plan, the plan should appear to that owner to enhance the owner’s sense of well-being, including a sense of self fulfillment. This comes from the axiomatic observation that if you exercise personal choice in the development, management, consumption, and disposition of personal and community resources in harmony with your core values, you will likely experience a sense of self-fulfillment and personal well-being. Estate Planning for the Healthy Wealthy Family, Baris, Garrity & Neeleman, Allworth Press, New York. For a plan to accomplish that sense of personal well-being and self-fulfillment for each owner, each owner must perceive that the plan has been formulated with reference to that owner’s values. Hence the term: “values-based planning.”
For the group effort of the owners to plan based on values, they must engage in critical conversations and in so doing be able to articulate their values such that the plan is based at least in part on each owner’s articulation of values and provides a sense of personal well-being and self-fulfillment for each owner. Two concerns are clear. The first is whether the owners can define their values. The second is whether the owners can articulate their values. These are tasks requiring the assistance of the advisor. Even if core values are not articulated, owners will still have a sense of what they are. Plans which conflict with these core values will not seem right and not be satisfying to the owner. It is essential for each owner to think about the core values that are important to the planning. Almost all owners will find this to be a difficult task and will require the assistance of the advisor. To assist, the advisor must cause the owners to think about values and define their own values.
A value is a normative principle that informs and shapes thoughts, desires, feelings, choices, and behavior. A value is not a preference, but an enduring and essential attribute of character. The following are words describing commonly-held values and examples of words describing attributes within that value: integrity – honesty, sincerity, authenticity, dependability, stewardship, and personal responsibility; security – self-reliance, self-determination, self-actualization, prudence, health, education, comfort, acceptance, power, and prestige; and beneficence – philanthropy, gratitude, respect, tolerance, generosity, compassion, service, and justice.
Most owners are only vaguely aware of the standards and concerns that compose their personal value systems. Most unthinkingly embrace an array of normative standards to which they assume most caring and intelligent people adhere. Few have consciously attempted to resolve the tension that inevitably arises when those standards and concerns conflict.
If an owner’s value system is to serve effectively as the framework for the formulation of the succession plan, the owner must first clarify and prioritize its components. To bring clarity and order to the owner’s personal value system, the owner should reflect on the circumstances and experiences that have informed and shaped the owner’s hopes, fears, and perspectives. The product of this reflection should be memorialized in writing. The writing should be reviewed and altered from time to time to reflect changing circumstances and perspectives. This done, the owner will be able to use an identity conversation in a constructive manner in conducting difficult conversations.
Each owner should understand his or her value system and be able to bring an articulation of that value system into conversations regarding the conduct and ownership of the business. Each owner should be aware of the principles of conducting a critical and difficult conversation so that those conversations result in increased understanding about the values and feelings of the other owners. With this competency in place, the group planning process is possible.
