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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.

Alexa Von Tobel is the founder and CEO of LearnVest.

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.

Alexa Von Tobel is the founder and CEO of LearnVest.

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.

Alexa Von Tobel is the founder and CEO of LearnVest.

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.

Alexa Von Tobel is the founder and CEO of LearnVest.

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Alexa Von Tobel is the founder and CEO of LearnVest.

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