Integrating Strategic Planning With Vision and Values, Part One - Starting a Foundation

How do you integrate vision and values into strategic and tactical planning? That can be a challenge. Developing vision and values systems are primarily right-brained activities, while strategic and tactical planning are left-brained activities. Yet in order to achieve satisfying results, they must be integrated. Here's an example of how this can work.

Many months ago I was working with "Dave" (not his real name), an executive at one of the large high tech firms in Silicon Valley. Part of his employment package included both incentive stock options as well as non-qualified options.

We discussed what was happening in Dave's life. He had been working "24/7" for over five years, sacrificing his personal needs in the process. More recently, he went through a particularly nasty divorce (as if there is any such thing as a friendly divorce), and he was very much in a WIIFM (What's in this for me) mode in discussing his planning options. In fact, Dave's planning up to this point were for practical purposes, nil. His "plan" was to keep working for another five to ten years.

In talking with Dave, I discovered a number of interesting things about him. He liked kids, although he had none of his own. He also enjoyed sports, particularly golf although he had not allowed himself the time to enjoy activities outside his career for years. It was clear that it had been many years since Dave had experienced having fun.

A large part of his concerns revolved around his current tax issues. Earlier in the year, he had exercised and then held about $1.5 million of company shares of stock. He had already been advised by his accountant to expect a large combined federal and state income tax bill exceeding $500,000.

To find a solution, we completed a Macro Strategic Plan. This is a life plan that includes defining one's vision and goals, and then proceeds to implementing those objectives by utilizing proper structures and tactics. Here's how Dave executed part of his Plan:

* He sold about 70% of his shares of stock, converting enough of the previous potential AMT to ordinary income. This left him with about $1,050,000 of ordinary income, more than enough to offset the potential AMT on the remaining unsold shares. * Dave set up a private foundation with himself as the founder. * Subsequent to setting up his foundation, Dave contributed $500,000 in cash to the charitable entity.

Dave had indicated he had an interest in children and sports. So Dave set up his own charitable program that helped handicapped children learn how to golf. His foundation could subsidize the costs of special equipment, the time to perform due diligence on the types of courses best suited for handicapped children and subsequent educational programs to integrate physical therapy programs

Implementing the above plan allowed him to offset $500,000 of income. Because that $500,000 was contributed to his foundation, and because Dave was the director of his foundation, it was Dave who controlled how the assets in his foundation were managed.

In addition, Dave was able to combine his interest in children and sports by helping handicapped kids learn how to play golf. By starting his foundation, he managed to resolve his financial issues and at the same time achieve a personal dream as well. He was able to integrate his strategic planning goals with his vision and values.