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Tugboat Institute @Edward Jones: Trusted Relationships

Tugboat Institute @Edward Jones: Trusted Relationships

Susanne Lally
Tugboat Institute
November 2, 2021

The Tugboat Institute® tribe gathered in St. Louis last week for Tugboat Institute @Edward Jones. This was our 9th Fall Exemplar visit and offered an in-person as well as virtual experience to more than 100 Evergreen® CEOs. Edward Jones is an Evergreen company with $1.7 trillion of assets under care. Their 19,000 financial advisors serve over 7 million clients from 15,000 offices located in approximately two-thirds of counties in the US and all 10 provinces in Canada.

Edward Jones was established in January 1922 by Edward D. Jones—known to most in the firm as Mr. Jones Sr.—who devoutly believed that all people who work for him deserved respect and fairness. He and his son, Ted, who joined the firm in 1948 as its 18th broker, shared an abiding passion for the business they were creating.

In contrast to their competitors in the securities industry that focused on cities with offices teaming with brokers, Ted had the visionary idea of serving farmers, small businesses and families in small American towns. He knew they had financial resources but were overlooked by the traditional investment companies. Peter Drucker would later call this “a market in contemplation.” To serve these people, Ted developed the idea of a single financial advisor in each small town and encouraged every advisor to knock on doors introducing oneself personally. This was a groundbreaking business model and sparked other disruptive innovations that Edward Jones follows to this day.

In 1972, John Bachmann, Ted’s successor, wrote a short memo that redefined the course of the company with the forward-thinking concept of expanding from their current 100 offices to 1,000 while still holding true to the core value of providing exceptional service to clients in rural markets. John ended his revolutionary memo with the missive to, “Act boldly now.” In fact, at the opening of its 1,000th branch in 1986, John raised the bar again, announcing his new Big Hairy Audacious Goal (BHAG) to establish 10,000 offices across North America and continue the tradition of building hyper local business—one financial advisor at a time.

John served as the third managing partner of the firm for an unprecedented 24 years. The position would later be filled by Doug Hill and then Jim Weddle. Each played a critical role in the development and success of the firm. For our exemplar visit, we had the privilege to have the firm’s sixth managing partner in just under 100 years host the experience—Penny Pennington.

Penny assumed the role in 2019 and shared with our members her view of a managing partner that remains consistent with her predecessors, “I didn’t take this job to be a caretaker.” Rather she is raising the ambition of Edward Jones by moving the company from a mission-driven firm to a purpose-driven one—where Edward Jones’ purpose sits at the headwaters of the firm’s culture, strategy, trade-offs, and execution. Along with this shift, the company is taking a “human centered” approached to complete wealth management for their clients.

During a fireside chat with Dave Whorton that kicked off the exemplar, Penny was clear that the success of Edward Jones is not accidental or inevitable. This candid conversation also allowed Penny to share in-depth her life story, the history of Edward Jones, and how the Evergreen 7Ps® principles come to life at the firm.

After the fireside chat, executives and leaders from Edward Jones gave a series of presentations on Evergreen practices instituted at the company, followed by frank Q&A sessions. The first talk focused on Purpose, and how Edward Jones’ purpose is the north star, and the “why” for the firm.  Next the team presented the cultural and people practices necessary to make the purpose a reality. Their presentation expounded on the 5 mindsets that are integral to the company: lead by example, establish a place of belonging, continue learning, make effective decisions and grow community impact. As Penny eloquently put it during the Q&A after this presentation, “Being better versions of ourselves as human beings allows us to be better for our clients.”

Additional sessions included discussions on pragmatic innovation, the strategic advantages of ownership, the investment philosophy of Edward Jones, creating leaders and leadership capacity, the elevation of ethics beyond mandatory compliance, and the crucial role of volunteering and outreach projects that make a difference in the communities where associates live and work. Our membership was also treated to a talk by the firm’s fifth managing partner, Jim Weddle, who shared one of his greatest life lessons, “What got you here might not keep you here or serve you best.”

Those who attended were gifted with a deeper understanding that Edward Jones is a purpose-driven, dynamic, adaptive, learning organization that will continue to thrive and positively impact clients, colleagues, communities and society. It is this sentiment that makes Edward Jones exceptional and one also shared by the 200+ members of Tugboat Institute that commit every day to building leading and lasting Evergreen® companies.

Susanne Lally is Director of Marketing and Partnerships at Tugboat Institute

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