Does Your Family Operate Like a Business?

fee-only financial planners, stress-free financial planningA recent Wall Street Journal article, “Family Inc.,” highlighted how many families are coping with a potentially stressful and chaotic American family life. Many have adopted techniques developed by corporations designed to deal with group dynamics.

One technique known as agile development, started with Japanese manufacturers and was adopted by Silicon Valley startups. Workers are grouped into small teams with daily progress sessions and weekly reviews. Families apply these concepts by having family meetings, which “increase communication, improve productivity, lower stress and make everyone happier to be part of the family.” Some families answer three questions each week reviewing 1) what went right this week, 2) what went wrong this week, and 3) what will we work on next week.

Accountability is a huge component. Many families use a large board to monitor progress, with all family members making tick marks as chores and objectives are completed. The kids typically are empowered to determine their own rewards and punishments. It has been shown that children who set their own goals and evaluate them regularly become more internally driven and have more self-control.

Parents aren’t invincible nor are they immune from accountability. Effective business teams have all members contributing. Family teams need the same dynamic. Also, flexibility must be built in. The agile family philosophy recognizes that change is ever-present and builds in a system that is adaptable.

All families have some conflict. Some are now using problem resolution techniques found in businesses. More or all of the family members need to be part of the decision-making process. Use of the system of “vote first, talk later” is often used. Otherwise, those who talk first may have too much influence. 

These new group dynamic techniques may be even more important for families than companies. In a workplace, sometimes conflicts can be deferred or ignored. But, in families, extended conflicts can lead to divorce and estrangements.

Many successful families also work on financial literacy. They talk openly about money with their children. Some parents don’t want to burden their children with the truth, yet they may be giving them a bigger burden by not telling them. Allow the children to make their own mistakes with small amounts of money, like their $5 allowance. And, put them to work. Have them cut grass or have a lemonade stand. Many successful adults were involved in business as children.

Families are very important to us at DWM. As our clients know, we are pleased to meet with and help family members of clients, generally without charge. We have organized and facilitated successful family meetings. We have assisted younger family members in improving their financial literacy. We’re happy to help. Give us a call.