The secret to our success

I just finished reading Michael Lewis’ “The Big Short”, which deals with the fascinating and ultimately devastating details of the subprime mortgage trading industry and how it brought our financial system to its knees. Lewis describes how financial institutions created and sold worthless derivatives simply because they could make a lot of money doing it – at the expense of their investors and inevitably many of their own organizations. They were fueled by greed and hubris, with little thought or concern for anything else.

This reminds me of a lesson I learned early in my career at PS&F. Our number one core value is “Focus on client objectives.” This was made clear to me in a discussion I had with my predecessor, Vic Parker. Young, energetic, and full of ideas, I approached Vic one day with a number of suggestions to improve efficiency within our company. Vic listened patiently and then asked one question – ‘how will this improve client service?” Based on my obvious pause and empty expression, Vic knew I had not given that any thought. I was focused only on reducing cost and improving bottom line. I quickly learned that everything I did needed to be viewed through the core values of our organization. If it didn’t fulfill a value, it wasn’t done.

Vic clearly saw what Jim Collins and Jerry Porras later described in their wonderful book, “Built to Last”, as “the tyranny of the or”: “you can either have a great culture or make money; you can provide exceptional client service or manage your expenses.” Collins and Porras maintain that the best companies change ‘or’ to ‘and’, and that each objective exists in harmony. You will never sacrifice one to achieve another, and in fact, to do so should be culturally impossible, because your business operations are driven by your values.

The philosophy of the founders of PS&F embraced Collins and Porras’ concept. Parker Smith & Feek is a privately held, employee owned firm because we feel that’s the best structure in which to align those values. Our shareholders are invested in this business and its long term success. Further, we compensate everyone here with a salary, as opposed to the standard form of compensation in our industry, commissions. We do that in order to reward driving client value – not selling stuff.

Our approach to business is not unique by any means. In fact, a great joy of mine is interacting with many of our fine clients every day and watching them apply these same principals within their companies. Core values and business success are not mutually exclusive in America today, despite what has happened on Wall Street.

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