Systems

One of my favorite films about business is The Founder, which came and went in theaters but then found a cult following on Netflix, where it always seems to pop up on my welcome screen – perhaps yours as well.

Michael Keaton is both the hero of the story and the antagonist in his role as Ray Kroc, the milkshake machine salesman who builds and then eventually commandeers the entire McDonald’s corporation from its founders, a pair of brothers who began with a hamburger stand in Southern California.

My favorite scene in the movie is where they’re trying to work out the choreography of the Speedy Service System, to get as much efficiency and sales volume out of the limited staff and space they’ll have behind the counter…

We are constantly thinking about the way our own systems work internally to ensure maximum client satisfaction and the most approachable process to welcoming in new clients that we can offer. It’s not perfect, but it’s light years ahead of where we were a few years ago. It gets better every month, we are always working on it.

In our case, we’re not trying to speed things up like Kroc was. In fact, we’re trying to do the opposite – we want clients to make their decision to come aboard slowly and deliberately. It’s way too costly to have a dissatisfied customer who is looking for something that we don’t offer – or something we don’t believe in – than it is to lose someone who is in a rush. If speaking with us three or four times prior to becoming a client is too much effort and attention to detail, then that person is probably not going to be a great fit long term. We require at least that many conversations / meetings in order to do comprehensive planning work, portfolio recommendation, tax overview, and a lot more.

If we don’t front-load the system, then we don’t have enough information to give the best possible advice. It’s a risk, but our system runs more smoothly if we do all this work in advance. We end up with more of the right kind of clients and those clients are, in turn, a lot more educated about what we’re doing for them. Expectations are set and aligned with the mission.

Many advisors can’t afford to commit this much time to people who are not yet clients up front. We have an advantage in that the inquiring people we are doing this for are already familiar with us and our philosophy – they found us because of our ideas, not because we play golf at the same country club. In many cases, they’re fans. This means that if someone is qualified to be a client of ours, and we do our jobs right in the planning and portfolio process, there is a high likelihood that they will become a client by the time they complete this process.  We don’t lose many people that we shouldn’t. Nick’s work here on the analytics side informs me that of every 100 people who inquire, half are not serious. Of the fifty who are, not all of them are a fit for comprehensive financial planning and true wealth management. The non-fits fall out somewhere along the line (hopefully early, it’s better for everyone that way.) We end up with 12 to 13 new clients from that original hundred people who’ve inquired.  That 12 or 13 are the right people. We can actually help them. This is what our system is designed to do.

I’m not sure if we would be in a better place if that 12 or 13 turned into 23 or 33 of one hundred. They might be people we ought not have accepted. This is what Nick is helping us determine. (see: The Big Jump for more on what Nick Maggiulli is working on @ Ritholtz Wealth)

But we want the choreography of all 0f our systems to be invisible to the customer. Seamless. We want them to be up to speed on where to log in, how to see the allocation of their accounts, whom to speak with when there are questions, when they can expect to hear from us, etc – and we want as much of this to be intuitive as possible.

When Ray Kroc first laid eyes on the system that the McDonald brothers had in place, he saw something that set him on fire. He knew it could scale. He knew it was repeatable. He knew it could be done in other states and cities around America. He knew he wanted it all to himself. He got it.

Today in 1955, Ray Kroc opened his first McDonald’s franchise in Des Plaines, IL. I tell the story below. You can get our Market Moment flash briefing every morning on Amazon Alexa here.

Listen to today’s briefing below!

https://player.pippa.io/5bf0774ce28166b651430474/episodes/ray-kroc-opens-his-first-mcdonalds?theme=default&cover=1&latest=1

You can talk to us about your financial plan or portfolio here.