Okay, so you’ve heard me preach that the job of household CEO is a relatively easy one. I’ve already discussed the primary qualifications that every household CEO must have in hand, but just what is it that a household CEO does?
To answer that question let’s first look at what most corporations expect from their CEOs. When they are not drawing a fat paycheck, receiving copious stock options, enjoying all-expenses paid country club memberships on the company dime, getting their daily massage, or using the corporate jet for travel to various far-off business meetings at various resort locations, a corporate CEO is expected to define the company vision and provide any and all guidance necessary to turn that vision into reality; in other words, the corporate CEO decides where the company is going and how it’s going to get there.
Now how does that compare to the job description for the household CEO? Well, when they are not cooking dinner, taking the kids to and from school, changing poopy diapers, doing the grocery shopping, putting in a 12-hour work day at the office, mowing the lawn, or fixing the family car, the humble household CEO performs much the same role as the corporate CEO — without pay and perks, of course.
Specifically, the household CEO assesses the needs of the household, determines the resources (amount of money) required to address those needs, and then develops a plan that will ensure those needs are eventually met.
There are other differences between the two executives as well. Where the CEO runs a larger company, the household CEO is entrusted with running the humble family household; the household CEO is the household manager. And unlike their corporate CEO cousins, most household CEO offices are found in a small den or at the kitchen table, rather than in a large corner office.
Many corporate CEOs have at their disposal countless financial modeling tools and other powerful computational and forecasting algorithms. However, in most cases, the only tools the household CEO even requires are a pencil, paper, and maybe a cheap calculator (although, many household CEOs do take advantage of computerized spreadsheets, and other financial calculators when they are available).
And where the corporate CEO is concerned with earnings reports, sales projections, inventory information, and a plethora of other dry technical and financial data necessary for monitoring the health of his company, the household CEO is armed with not much more than a pile of bills, bank statements, and paycheck stubs. Finally, corporate CEOs usually have an army of corporate advisers and executive vice presidents to council them on all matters big and small. The humble household CEO is usually left alone to figure things out.
So what, exactly, does a household CEO do? In short, the six primary tasks of every household CEO are:
- Audit household spending habits
- Record household expenses and categorize them into wants and needs
- Create a strategic plan and an associated budget
- Communicate the vision and plan to the household
- Ensure the household sticks to the plan
- Refine the strategic plan as needed to address changing conditions
I will cover each of these tasks in more detail in future blog entries, but next I want to describe the duties of the household CFO.
Photo Credit: Schill