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University of Massachusetts Amherst

Family Business Center

What's a Life Plan and Why Do You Need One?

By Shel Horowitz

Why does a senior executive need a life plan? And why does a young family member just entering the family business?

Greg McCann can answer those questions. As a professor, consultant, attorney, author, and CPA—and former director of Stetson University's Family Business Center, where he created the country's first Family Business major, he is perhaps uniquely placed to look at a client's life from many perspectives.

And the life plan, a self-assessment/assessment by others of goals, interests, passions, personality types, and values (among other things), can help frame any decision so it's easy to see whether it's in alignment or in conflict with those goals, values, and so forth. It's also useful in figuring out where you fit in terms of relationships and expectations involving other members of your family.

Creating a life plan has four parts: self assessment, values-based definition of success, key challenges to address, and applying these three criteria to any major life or career decision; and consists of a series of eight challenges:

  1. Credibility
  2. Determining your future
  3. Taking ownership of your life and career
  4. Professional development
  5. Managing wealth and power
  6. Applying social intelligence (which is related both to others' perception of you and your own character—and which, he feels, colleges often fails to cultivate)
  7. Your marketability in your career
  8. How to get objective feedback and support (not always the same thing)

For those new in a career, a life plan can:

  • Help you decide if the career you're heading into (perhaps under pressure from older family members) is the right one for you—or if you'd be better served by following your passion, even if it leads in a completely different direction
  • Provide the research and ammunition you need to let parents agree to support you in pursuing your dreams

Here's a concrete example: "A few years ago, a student came into my office—they have to do these life plans—I asked him what he wanted to do. 'I'm a management major, so I guess I have to be a manager.'

'What are you passionate about?'

'Golf.'

"Mark came up with a flow chart, a budget, and a training schedule to become a professional golfer. His dad said 'I'll back you financially if you stick to the schedule.' "He came back to me two years later (a card carrying member of the PGA) and said, 'I've hit a home run! I'm not going to wait until I'm 50 to find out if this is something I should have done.'"

But it's not just those at the beginning of their career who find a life plan beneficial. McCann himself had to evaluate a lucrative job offer, and he turned to a life plan he'd done 16 years earlier. "And that helped me not to take the job. I like money, but I did not want salary to determine" his career path. His life plan from 1990 helped him see that he would have been less happy in a lucrative position in a large advisory firm, less connected with teaching and consulting (i.e. personal contact).

McCann is the first to acknowledge that in our harried lives, it's not easy to find time to do this reflective and analytical work. But, he insists, it's well worth the effort: "Reflecting on your self is difficult. Especially when you're busy—but that's where the value comes from.

"Invest 20-40 hours [to create your life plan]. Most people have an estate plan, 37% have a plan for their business, and just 3% have any written life goals. If you take a napkin and write three goals and put it in a drawer, it increases the chances of meeting those goals. You have to know what you want and how to beat the odds.

"Writing it out, you see the gaps, the inconsistencies, you go deeper. Even if you throw it away, there's still magic to writing it down. If I had not done this work, I'd not have had the fortitude to do what I wanted and would have probably been unhappy with the position the advisory firm offered me."

Written goals, he says, offer "clarity on what you want to achieve, a template for success, rudder for navigating change."

Yet he is very much against self-indulgence. Credibility is key for him, and credibility is comprised not only of self-esteem, but also outside validation. If you're faking your way through life—or pampering your children and letting them avoid all responsibility—it's like "you're playing for the Yankees and you don't deserve to play pro ball; that's a tragedy!"

And his message to those indulgent parents? " Why would you deny your children what defined your character: hard work? If your family has great wealth or a family business, how do you test your mettle?"

A few more of McCann's hints on values and social intelligence: instead of buying your kid a fancy sports car every year, use that money to fund the child to volunteer abroad, say with the Peace Corps. If you're wearing your best suit and trying to close a deal, don't lick your fingers in a fancy restaurant. And if you have to apologize for something, do it without making excuses. Excuses are about you; you want the apology to be about the other person, and how you're sorry you caused that person inconvenience.

This attitude is just as true on the other side of the street. If you have feedback to give, precede each bit of criticism with "four pieces of positive. It reinforces the good stuff."

Positive or negative, feedback can be heard best when it has specificity about the time and place of the incident, the behavior you're criticizing, and the impact or consequence of that behavior. "Spell out the rewards and consequences. It's a great way to coach people; they can usually hear it." And learn the difference between support (nonjudgmental) and advice (where you've staked out a position). As McCann's father once put it, "Since families are so long-lasting (and important)—if you have the opportunity to be right or to be kind—consider being kind.”

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