How a
culture survives when a start-up merges with an incumbent
A
seven-year-old start-up melds cultures with a centenarian—and is able to make
it work. LearnVest CEO Alexa Von Tobel explains her company’s culture journey.
LearnVest, a
seven-year-old start-up once praised by the New York Times as
“among the first to crack the code, using both technology and certified
financial planners” to make gold-standard financial-planning services
“accessible to millions of Americans,” was acquired not long ago by
Northwestern Mutual, a venerable insurance company more than a century old.
LearnVest founder and CEO Alexa Von Tobel recently talked with McKinsey’s Barr
Seitz about the challenges and opportunities in merging two such seemingly
disparate corporate cultures. The following is an edited transcript of the
conversation.
I think two things make
the culture at LearnVest really special. First, we have a massive mission: we
believe every American family deserves a financial plan and that you should be
able to be optimistic about your financial future if you get the data you need.
It’s a pretty big mission. There are 50 million households that badly need this
information. But every employee has had their own stressful experience with
money, and that’s why people join this team and work really, really
hard—because they love that mission.
Second, we’re a very
data-driven culture. Opinions don’t matter; we look at the data. Data drives
decisions, data drives strategy, data drives road maps. That’s very freeing,
because everything comes back to data, and data is quite clear. Even when you
don’t have a perfect data set—certain KPIs, certain metrics are better than
others—data can still really inform decisions. We’ll go to whatever data we
have. We’ll pull together external data, internal data, even a small-sample
set, so that we can make the best decision.
We started with just
the basic data on what was available to the business. “Do we have what we need?
Then it’s okay.” Now we’re transitioning into predictive data and
putting that predictive data into machine-learning data. That data will
drive the next step in our evolution. It never stops. You can constantly get
better. You can get more predictive. You can get better insights.
A customer-centric environment
Some companies tell
their employees, “Act like an owner.” I say, “Act like a client. We are the
customers.” When you can connect to it that personally, you make so much more
progress, because the vision then becomes, “Okay, what do I want in my life?”
When we onboard people
at LearnVest, we make them get a financial plan. They have to go through all
the emotions, all the stress, all the anxiety of understanding their financial
life. We had a team member who joined us—this is one of my favorite stories—just
after she and her fiancé had moved into an apartment above a pizza-oven kitchen
in Brooklyn. One Sunday, about a month after she joined LearnVest, I got a
phone call: her apartment had burned down because of the pizza oven. On Monday
I got another phone call: “I get all new stuff. I got the renters insurance
that LearnVest told me about. It was $20 a month. And now I get everything
new.” Welcome to LearnVest.
That’s the benefit of
being a client: you know what financial security feels like, you know what you
need to do. That doesn’t mean that every single person at LearnVest has a full
financial plan that’s changed their life. But it means that they better
understand the value of having a road map for their money.
One of my favorite
things when I’m hiring anyone who touches product, design, analytics,
technology, is to say, “Give me your phone.” I look at what apps they have,
because that tells you so much about whether or not they’re a real consumer of
technology. Do they have five apps or 150? Newer apps or very rudimentary apps?
Are they someone who uses and consumes the latest and greatest? I don’t pretend
that I have all the latest and greatest, but I regularly upgrade my phone,
update my software, make sure that I download new apps that I hear about, test
new products.
I think that’s one
aspect of being a very digital consumer of information. You are experiencing it
firsthand. You’re the customer. You know what a good experience, a frictionless
experience looks like, because you’ve had it, and you want to bring it over to
dealing with your personal finances.
What does the future look like?
One of my favorite
games is to ask people in the digital world what they think it’s going to look
like in a year—or three or five or seven or ten years. You hear such incredible
opinions.
I know my fridge will
one day order its own milk, for example, and as a new mom, I can’t wait for
that day. I can’t wait for Amazon to know my toilet paper’s out and send it to
me. That’s clearly where the world is headed. I look for people who are
spending the time to think about those new worlds and I say, “Well, if that’s
what the world is going to look like, what does it mean for us?”
I like to look at the
Ubers, the Amazons, and ask, “What do I love about them?” I don’t really care
what transaction I’m making. What do I love about it? I love that it’s
seamless, frictionless, it prethinks where I’m going next. Amazon texts me to
let me know something has just been delivered. I think, “Thank you. I wanted to
know if that box delivered. It was in the back of my head. But you proactively
told me and didn’t make me sign up to get that alert. Thank you.”
Bring that thinking,
bring that experience, bring that love into this world, whatever your
technology, whatever digital platform you’re working on, whether it’s selling
shoes or dealing with the weather or solving America’s financial problems.
Bring that to the table. That’s what I mean about being customer-centric. Be
the customer. That’s why I say, “Give me your phone”—because if you’re not
digitally native yourself, you can’t bring that advanced thinking to the table.
Postacquisition: The value in melding cultures
LearnVest was acquired
by Northwestern Mutual a year ago. Our culture, as I said, is extremely mission
based. We deeply believe that America needs what we’re doing. Northwestern
Mutual believes in being the center of their clients’ financial life. They want
to do what’s right for their customer. Those are both powerful value
propositions, and they absolutely overlap.
The great thing about
postacquisition culture is that none of that has changed. The really exciting
thing about bringing together a 106-year-old company and a seven-year-old
data-driven, fast-moving start-up is the chance to create a third culture,
which makes innovative, data-driven decisions, and does them at scale. I think
it’s going really, really well so far, because our core values are completely
aligned. We all know exactly where we want to get over time, we all know where
we’re headed. It’s actually less messy, because there is so much good “mind share”
across the leadership.
For example, as a
little start-up, you know, you’re making budgets, you have a CFO, you have some
infrastructure. But a company that’s done it for 160 years—guess what
they’re great at? Budgets. It’s delightful to have infrastructure and
support to do those things. As executives, we actually love the rigor that’s
made our budgeting process tighter. I love actually bringing some of that
advanced process and discipline to things that I always wanted to be better.
I think, if you fast-forward 20
years, this is going to be an example of one of the most successful
acquisitions. This is why I come to work every day. I think that’s actually
what we’re on track for over the coming decade.
http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/how-a-culture-survives-when-a-start-up-merges-with-an-incumbent?cid=other-eml-alt-mip-mck-oth-1611
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