002: Ron Carson on “The Sustainable Edge” & Turning His Dorm Room Startup Into $6B Firm

 

[INTRODUCTION]

 

[00:01:46 Brad: In this episode I have a conversation with Ron Carson, the founder and CEO of Carson Wealth. A top 10 Barons Wealth Management firm who oversees today nearly six billion dollars of assets. Ron was also recently honored by being an inaugural inductee into the Barons Hall of Fame. In close to a decade of working in the financial services industry, I’ve got to say this is one of the most intriguing conversations I’ve ever had. Ron give some incredible insights into the steps it took to turn what started as a business out of his dorm room founded in 1983 at the University of Nebraska into one of the largest wealth management firms in the country today.

 

In this wide-ranging conversation, we cover all kinds of topics. They range from Ron’s philosophy on goal setting and his success percentage each year to Ron’s random encounter with the construction worker in Omaha during an especially low point in his career where he questioned actually giving up. What’s interesting this random encounter actually changed the trajectory of Ron’s business? Along the way this conversation we throw in a random 80’s movie reference and a principle that taught Ron he still uses in business today. We discussed what hiring tools and philosophy Carson Wealth utilizes to create a culture that delivers, what Ron calls a “four seasons experience” while operating with FedEx efficiency? What tip did a billionaire client actually once give Ron that changed how he leads his team today? What is creative destruction and how knowing about it and planning to evolve can keep you from becoming the next Blockbuster or what Ron calls the travel agents of the past. And also some incredible insights on where Ron sees the future of Robo-Advisors going and the potential for a symbiotic relationship between human Advisors and Robo-Advisors. So as always super incredible conversation with Ron Carson, these show notes and links can be found at bradj.net/podcast. Also Ron offers a special pre-order link to his upcoming book, The Sustainable Edge. It’s gonna drop on January 19th so you’ve got a pre-release link where Ron included a few additional offers for those that order ahead of time. So without further ado, my conversation with Ron Carson.

 

[INTERVIEW]

 

[00:04:14] Brad: With that in mind we’re gonna go ahead and we’ll keep this super conversational, if that’s cool with you.

 

[00:04:18] Ron: I love that format Brad. Perfect!

 

[00:04:22] Brad: Okay! So, I figured with it being January 4th and the first business day of the New Year, I think goal setting is in everybody’s mind right now, and I just wanted to get any insight from you. Obviously, you have tremendous success in this business. Are there any, which you would say, different ways you look at goal setting or something that’s unique to you that’s help you get where you are today?

 

[00:04:51] Ron: There is. I mean, I love the process of setting goals, achieving goals, probably my favorite time of the year.  Especially this year because I was laid up. I had all kinds of time to pull out and look at the goals that I hit and the goals that I didn’t hit, why I didn’t hit them. I have a saying that we need to live our life by design and not by default. We need to have a game plan as to what we really, truly want to accomplish in our lives and avoid to live by the belief that… if you have a clear vision of where you wanna go then you should back it up with what we call ”smack certified goal” and it need to be specific, measurable, achievable and compatible goals. And every year, I go 20 years out, right now I’m 51, so… over the last couple of weeks when I’m 71 and my wife would be 70, and my kids would be X… I hope to have grandkids then. I want to get some framework to what my environment may be like then. One of the things, I want to accomplish in 15 years, in 10 years, in 5 years, in 3 years, in 1 year… and the 1 year goal, of course, where we’re at today. And then continue to follow through a process of what I’ll need to do daily in order to get those goals and what I’ve learned over the years is I tend to especially early on, I tend to overestimate what I could get done in the short run but when I look at the body of work dramatically underestimated what I could get done over the long haul and when I reviewed all of the goals which I did recently, my worst year of the hitting goals was 49 percent, My best year was 94%.

 

I tell people that  when you set a goal you believe there’s a 50/50 chance of hitting that goal you’re going to hit about 80% of your goals. Last year I actually hit exactly 80% of my goals which was purely coincidental over my entire life of setting goals, I’ve hit about 78% of my goals so that 80% rule tends to fall into place and I find others do as well so if you’re heart of hearts, it’s 50/50, you follow up process, you have a way of tracking, keeping it top of mind, you accomplish far more than you think possible.

 

[00:07:14] Brad: So that’s incredible insight right there because you know you go back to your grade school report card a 75% to 80% you take that home to your parents. They’re probably looking at you a little disappointed but when you lay out these big picture goals I mean obviously a guy that’s where you’re at today, that’s incredible and you don’t even have to accomplish all of them each year. So just the fact that you layout the framework.

 

[00:07:41] Ron: Brad, that’s an interesting observation you made about school. I mean I was an average student and I brought home, I got B’s, some A’s and my parents were disappointed and I understand why now. Because our society expects average and so to the degree that you want to give something above average, you can really control the world. Before, I went into the army, believe it or not against my parent’s best wishes and I was in Fort Knox Kentucky and here I was, they had a program where you could go into junior year High School. I remember once I got to boot camp and I’m waiting to meet the sergeant major that really was going to run the boot camp and we waited for an hour, we practiced standing up and everything. I was just real terrified and he walked in the room and he gave what I believe to be one of the most motivational talks I’ve ever heard of my life at which I didn’t expect. He said, “You know, you live in a society that doesn’t expect much and if you’re willing to give it 10% more than average, he said, you can control your own destiny and you can have absolutely anything that you want” was the gist of his one hour talk that he gave to us.

 

Sometimes in the most unlikely spot you pick up some of the greatest nuggets and to this day I still think about him and I still think about that and realizing that, I think our schools expect the average. I think that most people if you deliver average they’re relieved because most people are not and to the degree that you and your organization you have a general philosophy that you’re going to give it your all, all the time. You accomplished going back to the goal setting, you accomplished a lot more and you’re impressed and you’ll help a lot of people a lot more than you think possible.

 

[00:09:40] Brad: Great advice. Alright so this is a fun question. So I remember when I first got into this industry which would have been 2007. So for those of you that from the peak side that maybe aren’t familiar with Advisor’s Excel, largest insurance brokerage, independent insurance brokerage company in the US just over five billion dollars of annuities and life insurance sales last year through a small group of advisors we consult nationally. So, for those of you that aren’t aware of our story. So, 2007 I remember the first book that I got handed was Tested In The Trenches, so it’s cool now to come full circle and we’re doing this conversation with you today and I read that thing, I devoured it and then I started to share this this myth of Ron Carson right in our industry and it went so far as to say I remember one day, someone was like, Ron only works with Nebraska cornhusker fans, people that enjoyed red wine or that are private pilot’s and they have to have at least a million bucks. So the first question is, is that true? I’m curious.

 

[00:10:50] Ron: Partially true not early on Brad, I would work with anybody that had a pulse and as I refined my marketing, I really wanted to work with people that I have some commonality with. So, if you look at my top 10 clients they had one or four of those, I call them…. Truly, it was golf, it was the wine, aviation or really big red football and so much of my marketing revolved around that that it was just a natural market for me that to pursue.

 

[00:11:22] Brad: Okay good. I’m glad it holds some true. So I’m curious because I think a big disconnect and I see this on the coaching side with our clients as well. You put a massive producer up on stage and all of a sudden there’s these steps that are missing. And in fact, Jerry, one of my clients submitted a question along these lines. And if you could just spend a little bit of time around Ron Carson the guy that started, what do that business even look like in 1983 at your dorm room and maybe the big transitional steps along the way and really the big breakthroughs that  got you through the glass ceilings each way to where now Carson Wealth $6 billion of assets and really what that looks like and maybe even some roadblocks or some struggles or issues you had along the way.

 

[00:12:17] Ron: Yeah, I appreciate that. You’ll notice the book, Tested In The Trenches  was named that because I was frustrated many times. I would hear people giving advice to other people when in fact they haven’t done it. And they would talk about this big grand ideas without how they truly really get there and we need to understand that all of our journeys really start with the most basic simple things. And that’s getting up, showing up and trying something. And you’re right, I mean it was…

 

So, I grow up on a farm and in the 80’s my dad said, you’ll have to find something else to do and I was sitting in the library during study hall and Money Magazine said, “the top 10 professions for the future, one of them was becoming a CFP. And I thought, “Well, you know I’m so tired of being grungy and having grease on my skin” because we were always working on our equipment. If you grow up on a farm you know what I mean. In those days you couldn’t get it all off you and I thought I wanna do something I can wear suit and tie every day and I said I’ll become a Certified Financial Planner. So, okay, I will do that.

 

I love to tell people that all this thought and research went into it but it was really that simple. I went down to Nebraska, originally to go down and play football for Tom Osborn as a defensive end. I was hurt my first year and I had a medical Redshirt and I thought you know what I wanna start my business and I never went back to play football but I started just cold-calling out of the phone book for at the time in 83 there was an insurance product that Amica Life would come out with which was universal life and it was in a universal life today everybody knows of it but it was cutting edge way of insurance and I sold insurance for about six months.

 

There’s nothing magic about it. My wife today, girlfriend then, even Jason who works with me here at Carson wealth was my dorm roommate, it was just hard work. I would cold call on the phone for two, three or four hours until I get two or three appointments up for the next day. I would tell people that they… I’m not proud of this but I had no money so you had to just survive in those days I told people they sent in a card requesting information which they didn’t but there was so much direct mail going on in those days no one knew and they would always say, “How long do I send, ” it was something about six months ago. So, who could remember so I’d showed up most of wouldn’t ask to see the card that I didn’t have and so I had some limited amount of success. To me in those days, I was having tremendous success because I grew up in a… I’m going to call it a lower-middle-class to poor family depending upon how farming was going, determined whether we were poor or lower middle-class and so making a few hundred bucks, I felt like I was on top of the world.

 

[00:15:20] Brad: I can relate to that. I grew up in Kansas on a farm throwing a few square bales along the way. So, it does instill some hard work qualities and also instills “I want to get off of the farm.” Ok so, you went and that’s the start of kind of how this whole Carson Financial Services, that whole aspect got started. So once you graduated then did you take a full scale where you went and opened up your own shop or what did it look like from there.

 

[00:15:52] Ron: Yeah, what I learned from my father, which probably was really good at that time, I think later on were not be healthy as my dad was a workaholic. I mean we work all the time. I didn’t even to get to out for summer sports because of that and I love to tell you, I loved it but I really you know I wanted to play baseball, I wanna do some of those things. My dad couldn’t keep anybody working for him either. He’s the kind of guy that there was no such thing as a lunch break. You brought your lunch to work. You ate it while you were working. But it did teach me work ethic.

 

So, when I was doing what I was doing and people go, “You’re crazy. Why do you wanna work that many hours?” I’m thinking this was so easy. I actually get paid a little something to do this and didn’t get paid anything to do the other. But, I got to a point where I hated this business. I think it was 88’. I’m almost certain it was 1988 because it was after the stock market crash and I had a day where I had not sold anything the entire week. I had been stood up, keep in mind that I’d set these appointments so no one would let me in there house that day and all I had was a bunch of paperwork to go back and I am sitting, waiting to make a left hand turn and every time I go by this intersection, I think about this. It’s a hot humid day in August and this guy is jack hammering cement out of the medium and just sweating away and I envy that guy for a moment because I’m thinking “he’s getting paid, I’m not. He doesn’t have a worry in the world. All I’ve got are worries, and he gets to go home tonight, have a shower, have a cold beer and really enjoy a great day of productivity and I have nothing to show for it.”

 

And that’s when I say, “I envied him for a moment, albeit.” It was a brief moment because I like,”Oh my gosh, this so much what I came from on the farm. I want something more for myself and my family which I didn’t have. I had a wife at the time. And so that’s where love affair marketing was born I went back to, now I had progressed from working out of my car to working out, my wife and I had a studio apartment. So I was working on a studio apartment. It wasn’t until 1992 that actually even had raw office space that someone could come to an office and actually meet with me and I remember having a hand full of clients that I called up just to check in just to see how they were doing and their reaction really surprised me they said, “You know Ron, you’re really just calling just to say hi?” and at the end of the conversation I realized the only other time I’d ever reached out to any of my clients is when I had something to sell them.

 

I had a [inaudible] of every CP, pretty much everybody owed money [inaudible] in those days. When they came due, the bank would always try to get them to roll over couple days early, I always set an appointment like three or four days ahead of time, go see them, get them committed to making an investment and then annuity, a mutual fund, insurance, whatever happen to be at the time.

 

But as I reached going back to this day of dejection where I hated the business and I was feeling really down. Love affair marketing was born because people, if you just reach out and you touch them and you show sincere interest and care for how they’re doing and I remember one lady saying, “Ron, I’m so touched that you just reached out” and I’m like, “you know really I was doing it for me, I needed a friendly voice on the other end because I had a maximum amount of rejection that I can’t handle for the week.” I didn’t say that but that was I was thinking so I went through and called everybody I could just to check in to see how they were doing and love affair marketing are building this emotional reciprocity making deposits into  their bucket. So when and if you needed something they were more willing to do and that revolutionize the way that I approached the business, I approached people and the number of referrals that I get.

 

It is so simple to do but I still find advisors that don’t make the birthday calls. They don’t reach out and touch their client, they don’t have a proactive touching communication program but they’re off spending a lot of money doing a lot of things when in fact they could mine the diamonds in their own backyard.

 

[00:20:18] Brad: What’s interesting about it to is you feel good doing it.

 

[00:20:23] Ron: You do.

 

[00:20:24] Brad: It’s like I could go to a public seminar which we obviously help a lot of our advisors do that as well. It’s a great form of marketing but it’s this awesome form of marketing where you actually give back to the people that trusted you and help you build your firm from the ground up and I just… It mystifies me how sometimes people don’t take advantage of that they’re the people that love you anyway.

 

[00:20:48] Ron: And Brad I just want to add something on that love affair marketing and really that’s the things that I teach in both TNT in my newest book “Sustainable Edge” this stuff works and it’s so powerful that you really want to make sure that you’re in this profession for the right reason and that you really truly are… If you start of thinking that, “I want to put my clients interest ahead of my own” the money shows up. I know our profession/industry always says that but so few people do it. But if your will to simply have that philosophy and apply the principles that I’ve laid out, that Scott and I have laid out in the “Sustainable Edge” you not only have a success, but what you said Brad, you’ll help more people and you feel so good. You have such a return on psyche that you have such an energy and a re-invigoration about what we do that in some cases I’ve had advisors say, “I never thought it was possible to feel and have the type of energy that I’ve had in my profession while doing so much good.”

 

[00:21:54] Brad: Funny time for this quote, nobody on the calls is going to expect the source but I remember when we were sitting in your office and we had a conversation you and I and you pulled out a Brewster’s Millions quote and it was, for those of you that remember, I think it was an 80s movie, but you can not give away money, time, effort, love without it being returned  tenfold. So, like you said you never know where you’re going to pick up those little nuggets of wisdom right?

 

[00:22:22] Ron: And that’s a great movie to go back and watch. I mean it’s obviously… I think Richard Pryor was the main actor in it but it’s so true that if you live a life of abundance and you’re giving, it does come back tenfold but if you’re giving because you expected it to come back tenfold, it won’t. You literally got to give it from the love of wanting to give and then it does. The universe just has a way of rewarding you for doing good.

 

[00:22:52] Brad: Awesome. So I want to continue down this path. So we’re walking through this step-by-step’s. So I kind of got to the point where you went out, you ventured out, you opened up your own office in 93 or so. Where was the transition or maybe even any of the marketing that you want to share with everyone listening and watching here. Where was the transition where it went from Ron with more of the administrative staff, to where you brought on your first associate advisor or second advisor in your office and what frustrations did you have maybe along the way and what worked well which you figured out?

 

[00:23:30] Ron: Yeah so lots of stuff there. Back to the love affair marketing, so because I identified love affair marketing, I started identifying going back to that question about type of client that I had. What were their passions? I really wanted to know and I really targeted. So I had events and I would look because I didn’t have much money when I first started of so I was looking for things that already going out of my community that I can bolt on to and have some sort of presence to something bigger while not having to spend a lot of money. The other thing was referrals, my clients went out of their way to give me referrals and it’s really a stat that’s out there and it’s probably two or three years old, but it doesn’t change from year to year.

 

While 50 percent of new client comes from referrals but only 11 percent of advisors actually ask and so I taught myself to always ask but only ask after I’ve made many deposits in the emotional bucket. The other thing Brad that really drove my business was systemization. How do we have repeatable process so that things don’t fall to the cracks. I always promise my clients the All Four Seasons experience with FedEx efficiency.

 

Staff, I am glad you mentioned that. One of the turning points of my business as well was to not think of my co-workers as staff but as internal stakeholders. Don’t think of human capitals as an expense but truly as an investment and an investment that you are making together, you’re making it side by side with your internal stakeholders because you’re building something together. I think if you can get over that mindset that it’s an expense, I’m going to bring people in you’re looking for some sort of bargain in that area, that was a mistake I made time and time again but once I learned to really…

 

And this really came from one of my billionaire clients. He made his billions from scratch, he didn’t even start his business until he was 50, a year older than I am… a year younger than I am right now and a self-made billionaire in Omaha. I said, “what was the…” I used to do a series called Habits of Top Achievers where I would interview very successful people, now I really did it because I wanted to get to know them to become a client and by the way that works but it gave me a treasure trove of great advice and what this particular person told me said, “Ron”…

 

Because at the end of the interview I’d always say, “okay, what’s the one piece of advice that you can share with me that has most lead to your success?” and this particular one who said, “hire the best people you can and get the hell out of their way” and he said, “as soon as I learned that I was a good delegator but I wasn’t the person to do the stuff, my business flourished well beyond anything I thought was possible.

 

[00:26:08] So think about your love affair marketing, systemization, a different way that you view a team… understanding to… I used to sit in front of clients and think I had to have answers for everything. You don’t want to be a library, you want to be a librarian, you want to know where you can find the information, you don’t have to have the information. When you’re building your team, and I think we are going through a major change today in the way that service is going to be delivered into the marketplace, to make sure they share your culture.

 

I have a philosophy that culture eats strategy for lunch. I don’t care how great your strategy is, if you don’t have people that share your vision and your passion… We’re very careful here at the Carson group as to anybody that we invite in and make part of the group because human… your internal stakeholders and the human capital that you allow to make up your organization are going to drive your… The quality of your success is going to be directly proportionate to the quality of the people you surround yourself with.

 

[00:27:15] Brad: So true. I’ve seen it over and over again on my side and what’s interesting is when you try to go the affordable route it creates three, four or five times more work when you have to replace those types of employees. There was a… actually for those of you that aren’t familiar with this, there’s a great documentary on Netflix it’s called The Lost Interview with Steve Jobs. This is prior to his return to Apple. So this is before he built the iPod, the iPhone and he gives one piece of advice, they asked him how he built the team that created the original Mac back in 1984 and he said, “I only hired A players” and iron sharpens iron, steels sharpen steel and he said, “what I found is the number one de-motivator for great employees is to team them up with somebody that is not a great employee because they have to go back and fix their work and it’s super frustrating to them” so he said, that was my key which is basically what you are echoing right there is the same thing that worked for Steve Jobs, worked for Ron Carson to build a $6 billion firm so that’s cool to hear.

 

[00:28:21] Ron: You would think we would know that because in investing, if you buy a cheap penny stock it looks cheap and you’re getting something for nothing you’re not they tend to go lower. Real estate is the same way. It is a especially true with the people you surround yourself with.

 

[00:28:37] Brad: Cool. So I’m curious, any big mistakes during this time period where 51-year- old Ron Carson could look back and talk to 25-year-old Ron Carson and say, “don’t do that” or “that was a huge mistake, why did you do that?” any moments like that along the way as you were building the firm?

 

[00:28:56] Ron: Yeah I had so many mistakes I don’t know where to start. I mean one, early on of my career, I was product focused, I wasn’t solution focused. So I was not putting my clients interest ahead of my own, I was out selling something versus really understanding what their needs were and really providing solutions for that. Another major mistake which I just shared with you is you’re really not hiring the highest quality people that I could surround myself with. Another mistake was thinking that you had the answer for everything and not allowing other people… as a matter of fact, probably one of the greatest personal epiphanies I’ve had is I want to be the dumbest person in my organization and I think I’ve succeeded and surround yourself with bright people and let them make mistakes. That was probably one of my biggest mistakes personally if someone made a mistake I was on them about it.

 

[00:30:01] My philosophy now is I’d rather for you to ask forgiveness than permission. I see so many cool things that are innovative, that are creative, things that never would have occurred to me that are getting done and getting implemented. I’m seeing them the same time they’re getting rolled out sometimes. I’m like, “Wow, we did this?” and it’s the type of culture that we have here. The other was, and to this day, I’m susceptible to this so I’ve got to consistently be aware of…

 

Most of us are entrepreneur marketing machines and because of that we rarely meet a marketing idea that we don’t love, but don’t get pulled into a bunch of different directions and down a bunch of rabbit holes. Understand what it is you want to build, focus on that. You want to be aware of your surroundings and opportunities, I get it, but you also don’t want to get pulled in a lot of different directions because as a leader, I think about the highest and best use and the most valuable to the organization is really vision, it’s the culture, it’s not letting us and I’m probably the biggest… Where I used to be the person leading in a thousand directions more times than not. Now I’m the person saying, “no, let’s focus on fewer things. Let’s make sure that we get them done” and does that really fit into what we’re trying to accomplish and so it’s LNG. It’s leadership and its growth and development for my internal stakeholders. That’s where I really enjoy and is the highest and best use of my time today.

 

[00:31:37] Brad: Alright. So I’m going to hit on something you mentioned a little bit ago that I love the concept, I think it’s hard for a lot of the people on call at least I know the conversations I’ve had. Are there any tips that you have to allowing people to make mistakes because I think most successful advisors are type A personalities, hard drivers and it’s hard to let go. So any  breakthroughs that helped you along the way there?

 

[00:32:05] Ron: Yeah. I remember I was in a retreat one time and we just had a retreat not too long ago where we think about okay, what do we want to accomplish, where do we want to go? And I asked for someone’s opinion on something and they are like, “I really don’t have an opinion.” And I said “you got to have an opinion.” and they were all like, “yeah, I do but I really don’t want to share it.”

 

So, I had a private conversation with them and they said, “you know every time I share something you end up just telling me why it won’t work” and I was like, “Man, I really am. I am the road block. I am the one that’s stifling my greatest minds at the organization from really allowing that creativity that happen. There’s a limit though. I mean if you have internal stakeholders that continue to make the same mistake over and over again that’s a structural problem and the way that they make decisions. But I tell you what, if I have someone who makes a mistake, and they can make 20 mistakes in different areas because they’re coming from a position… Where I’m accomplished, I’ve learned a lot of things that maybe didn’t work and were able to have a better strategy going forward, I’ve been okay with that and you just gotta bite your tongue.

 

Here’s the other thing, you are talking about mistakes is that people that work with you are not going to do the things the way you do them, it’s just not. Deep down, because many of us have been successful entrepreneurs, we’ve been very protective. What got us to… If you’re satisfied hitting a certain level of growth and staying there, if you continue to adopt that philosophy you’ll never move beyond it. Let people do things their way. Let them have true authorship in the things that they develop and don’t ever… even if it’s your idea don’t take credit for, give credit whenever possible and try never even if it’s your idea to let someone else have authorship of whatever the idea is and that part.

 

I want to come back to a point too. A mistake that I made and that was working all the time. When I talk, I’m going back to the “Sustainable Edge” because the general premise and a true “ah-ha” moment for me was when I was able to surround myself with really high quality people and we were focusing on fewer things, my life got much simpler and much more satisfying because when I was working all the time it really wasn’t a lot of fun and my wife would say, “gosh you’re stressed out all the time, why do you do it? I mean we have plenty of resources i.e we can buy anything that we want so why do you do it?” and I said, “that’s a great question. I think I love it most of the time but I really want to do some other things in my life.”

 

So as I started to surround myself with good people, fewer, better, focused decisions, I got a balance in my life. And as soon as I brought more balance in, my growth rate accelerated. As my growth rate accelerated, it made me excited because looking at what lead to that growth was the balance. So balance lead to growth, growth fed the balance and it’s this virtuous, very positive cycle. You’ll never get to the positive sustainable edge cycle, a balance growing growth and growth growing balance unless you allow people to make mistakes and you surround yourself with the best people you can find.

 

[00:35:43] Brad: Great advice. Thank you! So question from Chris that’s on the call here. So we talked about hiring superstars as advisors, his question is, “he’s heard the advice on the administrative side to hire loyal hard workers that are more about people that are good at following a system as opposed to superstars because superstars will kind of venture their own way. Have you found that to be true or do you think that advice is off base?”

 

[00:36:11] Ron: Well it depends on the position. So we have a process, we use Top Grading to initially vet a lot of people and if you’re not using Top Grading, I strongly recommend it.  I know, and I have to get an updated number from HR, but as of a couple of months ago about 50 percent of the people that start the topgrading process don’t even finish and it is by design. It’s a very intense way of applying for a job so the people that make it through they’re already telling you something about themselves. Then we do a telephone interview.

 

[00:36:46] Brad: So Ron real quick there because I want to make sure I got that right for all the listeners and we’ll include this on the show notes. Pop, P-O-P grading? Or…

 

[00:36:54] Ron: Top. T-O-P. Top Grading.

 

[00:36:57] Brad: Top Grading. Got it. Okay.

 

[00:37:00] Ron: And so by the way it is saved our people that are looking to bring people in a lot of time and they’re telling me that the applicants that actually go to the process are much more qualified than we’ve had in the past and then we have a very defined roles and responsibilities, what’s the job description. Then we do a telephone interview. Of course, we are looking at the resume as well that say, “Is this person is properly equipped?”

 

Then if they make it to the telephone interview they come in for in person interview and  that in person interview they do a DISC. For those who don’t know what DISC is, it’s just a way of measuring what type of people they are, what kind of work, how they like to work, how they interact, what their social driver’s are, is money important to them, is knowledge important, all those things are important to know about the person and the role as it relates to the role that they’re going to fulfill. And then we’ll put them through Wonderlic, we want to know how intelligent is this person especially under pressure. So we’ve got a certain DISC profile that we’re looking for for a position. We have a certain Wonderlic score that we’re looking for a certain position. Admin would be different than our CIO or let’s say CFO. But all that could line up. But the most critical part is we’ll have them in for a series of three or four, we’ll have them to dinner, we’ll meet their spouse is a cultural part. Because all the rest of this stuff they could be rockstars on, but if it’s not a cultural line. Remember what I said, it could be the best strategy in the world but if you don’t have cultural alignment, nothing’s really going to get executed and we wear people out.

 

We just recently had Tyler Statham and his wife moved here from Scottsdale, Arizona and his wife was over to my house we’re having a glass of wine and she said, “Man, I never thought he would ever get this position” and I said, “Why?” and she said, “With just a number of times that you guys had to talk to him and all the stuff he had to go through” and I said, “Well, you know you just know we don’t bring anybody into our organization lightly.” And here’s the thing too, they’re young couple she was born in Scottsdale and moved to Omaha, Nebraska. He’s from Southern California. She’s from Scottsdale, Arizona and he come to Omaha to live in our winters, with the snow on the ground as we speak.

 

Anyway, have a process to bringing in the internal stakeholder. I think ours very expensive since we added all of this steps. Our turnover ratio is dropped dramatically because we’re getting the right people in the right spot.

 

[00:39:44] So back to the original question, it depends on the position. In some spots, you’re going to won over achievers and others you’re going to won different types of personality. Make sure the compensation is right and some people are driven, instead of compensation, they want to operate in a results based world where they don’t need a lot of base but they want a lot of upside. And then you’ve got your time and effort. Where people just want to put in the time and effort. This isn’t going to be a career. Culturally they can be a aligned where they’re not champions of the division 24 hours a day. Not that they can’t be part of a team but you’re going to reward them and compensate them differently as well.

 

[00:40:25] Brad: Great. On the book, because this kind of circles back around to the work life balance that you were hitting on. So on the Sustainable Edge and one of the giveaways for everybody on the call here today is the IQ grower. Can you walk through, for those of you that can see the feed here, it’s kind of a one pager. Can you walk through how that kind of leads into the focus that you were talking about there?

 

[00:40:50] Ron: Well, let’s go back because the reason, one of the things that I teach in TNT is to go to the blueprint process. And the blueprinting process if I can get someone to actually go through it is phenomenal. But it takes its emotional commitment that most people really struggle doing especially even though you’re the only one looking at what you put on the paper, it’s hard to sometimes be 100% honest with yourself. I struggle getting people to really commit to the blueprinting process, but I still recommend that you do that. I came up with the IQ grower process in order to give someone something much simpler than blueprinting. Now, if you do blueprinting, you can still use the IQ grower process but if you don’t do the blueprinting, IQ grower process will get to the heart out of the watermelon if you will. It get’s the essence out of what we’re trying to get you to accomplish.

 

And the very first step is “what do I value most?” So you want a list, what are the four things,  you know, why are you on this earth? What are the things that if they were no constraints in your life, what are the things that you value? Where would you spend most of your time? And that’s the next question is “What activities are most meaningful to you?” And that’s also, we have to come back and say, okay, if I’m valuing acts, that all my activities that are meaningful to me or different than what I value you have to go back and say, is there a mismatch there?

 

Am I really clear in my thinking? These are the things that I value but these are the activities that I really enjoy doing. But if you spend the time going through it and get alignment between what I value most, what my meaningful activities are and how I’m going to actually spend my day. And then what is my attitude for gratitude? One of the things that I have been a big believer for, I have a thing in my shower. I have 28 sayings that I’m grateful for and I always pick one and I think about it as I am in there, going through. I have all my goals actually laminated in my shower too. And that’s my theme for the day, what is that is going to resonate on my mind or I’m going to have to say top of mind. So Scott and I went to give people a template that they could have it front and center. You’ve got this first three steps, what do I value, what are my activities, and what I am  grateful for. And by the way, people that are mindfully grateful for anything are more positive people are happier as well.

 

[00:43:23] Then, step four is the vital one. What’s the theme for the week? What’s the one big thing that I’ve got to get accomplished for this particular week? And they’re going to know if I’m going to ask you there’s another call on how to say ‘how good are you at it and how excited are you?’ And ideally your vital ones every week you should be good at accomplishing whatever it is you want to get done and you should be excited for it. Otherwise, find another way or having someone else would accomplished this thing for you. And then I have The Six Mosts which I do every night before I go to bed. What are the six most important things in order of priority that I’ve got to get done? And there’s a column to the left that say, “Is this tied to my goal for the year? Yes or no?” Can you imagine if you have day after day where you’re six mosts isn’t tied to your goal? Well, that’s not the six most that’s just something you put on your notepad and get to when you can. It’s not urgent. It’s not important. It’s maybe necessary at some point that most if not only your six mosts should be tied to your goal. Like the vital one, I want to know, am I excited? And am I good at it?

 

Now there’s something that are impossible, for example: I workout pretty much everyday I don’t enjoy it and I’m not excited so they’re like two zeros from me. And, I guess I’m okay at it but it’s just one of those necessary youth goals, if I want good health and that’s one of my long-term goals I’m going to have. I’ll give you the fact that maybe they all can’t be you’re ecstatic to do but most everything on my six mosts and my vital one, I feel I’m good at and I’m truly excited and I look forward to doing. That is knowing that activity of the day is tied to my one year goal which is tied to my three, my five, my ten, my fifteen or my twenty year. When things get chaotic or they get tough or get distracted this IQ grower we call it, “Implementation quotient” getting stuff done that’s important you. Gives me the ability to act sometimes when motivation is not present. Gives me the ability to focus when I get distracted. Gives me the ability to get back on track and knowing that it’s the end of the day if I spent all my time on number 1 or number 2, I spent all my available resources on the number 1 or 2 most important thing that day which are ultimately tried to what I’m trying to accomplish in my life.

 

[00:45:47] Brad: That reminds me of advice from another guy at Omaha. Mr. Buffett. He calls it ‘the avoided all cost list’, right? Basically, all that stuff off my desk. Great advice. We’ve got about 10 minutes here on the call. There’s a laundry list of things that I want to ask. I know we don’t have the ability to discuss the whole book and its entirety on today’s call. If there’s one or two key items, ideas or concepts out of the book that you wanted to leave everybody with on the call, what would they be?

 

[00:46:23] Ron: There’s a couple. One is, we ask you we open up the book is the ultimate question. If you’re to die tonight, is the firm that you have today, your way of doing business, the firm that you would want to handle your loved one’s wealth. And that’s a biggy because if your firm’s not great without you, you don’t have a firm. You’ve got a job and it’s going to be great without you. So the ultimate question is that an exercise we ask you to go through ultimately. Once you can answer yes to that, you will get more referrals because you’ll be entitled. A lot of the reasons I believe advisors don’t ask for referrals is they don’t feel they have a value proposition that’s worthy of the referral. If you solve for the ultimate question you’ll have those.

 

The other is you have to grow at a certain rate. We put in the book 15% there’s some hard work around this, that’s the minimum growth rate in order to have a viable organization. My organization has grown at over 28% since 1983 so almost double that so you’re saying why 15? If you focus on it then you do everything to say at a minimum we’re going to grow at 15% and you’re probably going to grow 20% or 25% a year and we talk about some of the things that are really important and things you need to be thinking about.

 

I talk about how do you harness the subconscious mind. It’s one of the chapters in the book. Also, delivering value beyond a doubt. I mean there is massive opportunity in financial services today. We’re going into creative destruction. For those of you that don’t know what creative destruction is, it’s really an idea that was born by Karl Marx that was really refined, the thinking,  by Joseph Schumpeter which was an Austrian economist and our profession is going through this right now. So, creative destruction simply means you destroy one way of delivering value in order for a much better way and I can give you two examples of that. And this is important to understand because if you think you’re going to be able to do things the way you’ve always done them, we’re all in for a big surprise in the future.

 

The Telecom industry in Omaha here a company called, Level 3 Communications, wrote the 1996 telecommunications act. It allowed for competition. It allowed the old legacy carriers to really become irrelevant and as consumers we benefit it because look at the smartphone. Look at the cost of communication and transmission today. Look at the things we can do. It would not have happened without the creative destructive process.

 

[00:48:53] Another creative destructive process was blockbuster video. Blockbuster video in 2006 was I think it had 9,000 locations, 60,000 employees at the top and Netflix was coming on the scene. I remembered sitting on the analyst call and they’re like, “No, you get these discs and they scratch and sometimes they get lost.” The mistake the market made is they were comparing Netflix in the form that it was at that moment was not a threat. They didn’t think about Netflix evolving and four years later blockbuster filed bankruptcy.

 

Think about that, I mean how quickly that whole process actually unveiled. Today, Uber. Uber is going to replace the taxi cab driver and some of the private limousine services that are out there today. My question for you, when you think about adding value beyond the doubt, are you going to become a travel agent of the past? Think about it because travel agents were vital part. They can charge 10%. They were adding some value in all of a sudden the internet and other services replaced it. I mean, make no mistake I think our opportunities are greater than they’ve ever been but you’re going to have to think about how can you differentiate yourself what are the valuable services you can provide and if you do that, you do it at a fair price then you’re going to really rule the market.

 

[00:50:18] Brad: So, the analogy I would make for our industry is the Robo-Advisor. Can you share your insights there as far as how do you see even incorporating that into your firm? Do you see just the value proposition changing? What are your thoughts there?

 

[00:50:34] Ron: Yeah. I hate the term Robo. I think I’m going to compare Robo would’ve been Netflix when it first came on the scene. People were saying that’s not going to replace it, you’re right. What you see today is not. I’m actually an investor and some of these, I’m going to call, “disruptive technologies” that are going to be emerging. So the answer to your question Brad is yes. We’re definitely going to have what we call, “Meaningful human touch with maximum Technology” where those things actually converge.

 

So someone can come to, I don’t like calling it a website, I call it digital marketing hub and they can pick and choose how they want to interact with our firm. We don’t want to have them tied up and if they want to work with an advisor this way, they want to work with an adviser that way. If there’s times that they go I really don’t need an advisor for this point in my life. We want to make it really simple to move from one model to the other model. The other thing that’s not far away is there is data. These big data aggregators where tonight, there will be millions and millions and millions, if not trillions of accounts actually aggregated where they know account level detail, how old you are and how you’ve actually perform. They don’t have your private information but they know enough about you where I think by this time next year you’ll be able to go to our digital marketing site and someone can say, “Gosh! I heard this guy talk about investing and I should get a second opinion.”

 

[00:52:07] I know the technologies here today whether to be commercially viable here from now is the big question. But can you imagine if your client could link all of their accounts or just an account because they’re curious and I can tell them, “Hey John, other people just like yourself that at your age over the last three years you’ve underperformed them by 17%. You paid 11% more in fees than you’ve take on 34% more in volatility. ” That technology is out there today and it is not an indecency it’s compared to my peer group compared to other people just like myself. By the way, here’s our step actually perform, If you want to transfer you can actually complete an online application to do so. That’s going to happen so if you’re stuck in a way of doing business that’s not going to allow for maximum optionality, I think that just as fast as Blockbuster  went to the wayside, the legacy Telecom carriers went to the wayside, the old traditional way of doing business, five years from now, I think won’t look anything like it looks today, which on some levels scares me to death, but on others really excites me for the future.

 

[00:53:21] Brad: Very interesting. If there was one thing that your firm’s doing today to make sure you aren’t the blockbuster of the past as far as from a technology aspect, what would that one tip be your tool? If you don’t mind sharing.

 

[00:53:34] Ron: I’ll invite you just to go look at our digital marketing hub what you would call a website. You can go to carsonwealth.com or Carson institutional Alliance. Either one of them. They’re very interactive. We’re able to push and pull information. Prior to, we launch this in July and I’ll give you a couple of stats here. July 1st we went live with our digital marketing hub. In three months we had 28,000 unique users. Prior to that, that is more unique users than we had had in the several years, as far back as we had records for we had more unique users, more unique visitors in a three month period of time. We would get occasional lead or two a month from our website. We had 300 and some leads actually come in from this and you can just see exactly what we’re doing and how we’re able to pull you in, get some information from you and then have an advisor actually reach out.

 

So that’s a very first generation of what we’re doing today and then we’re also always thinking internally about what’s the next, the next, the next next and the next next next. So we always have, what’s immediate that we’re implementing, what are things that we plan on implementing next year and what’s our wish list of items that if we had no constraints, how would we want to do business, what would be want to be able to offer to the marketplace?

 

[00:55:06] Brad: Great. Ron, so on your side I want to respect your time. I know you’re kind of busy guy and you’ve been out of the office so I’m sure you have extra stuff going on. I’m going to ask a few questions here to wrap up. I’m changing my last question due to this conversation but the first one’s a selfish one. If there was a napa cabernet that I needed to try out there that I’ve never heard of, what would you recommend?

 

[00:55:35] Ron: Well, Altamura. As a matter of fact, Frank and Karen actually own the vineyard Altamura, their 12, 13 and 14 are going to be among the best ever. Their 2007 was ranked the number 6th best wine in the world. It’s about 80 bucks a bottle, pretty reasonable. If you tell him, “Ron Carson asks you to call” they should give you a 20% discount on that. I was in Vegas a few months ago and they have it on the menu for $375 a bottle, so that tells you what they’re selling it for, for the places you can actually get it, because they sell out every year.

 

[00:56:13] Brad: Thank you. I’ll make sure to pick a bottle that up. Here’s my final question and as we’re wrapping up here I just want to say thank you so much Ron for joining us here. This has been an incredible conversation I know it’s brought a ton of value to everybody joining us here today so thank you.

 

[00:56:30] Ron: Thank you and I would love to offer our pre-order for our books too. It comes out January 19th. If you do a bulk order and you can go to the sustainableedge.com. The sustainableedge.com and if you order, even at 10 books we do something for you at 50 books, at a 100 books. You can even get a powerpoint for when you go out and prospect small business owners. So, to do a bulk order there’s some cool premium items that myself and Scott are willing to do for you and if you can put the order in prior to January 19th our publication date, we’d really appreciate it.

 

[00:57:06] Brad: And for everybody on the call here today, we’ll make that super easy for you. We’ll shoot an email out with that link that Ron’s talking about with those different offers so keep an eye out for that. Also, keep an eye out for this as a podcast. We’ll repurpose it and get some show notes out. Ron, however you guys  want to use that on your side to you’re welcome to.

 

[00:57:25] Ron: Great. Thanks for having me today, Brad. It’s been great.

 

[00:57:28] Brad: One last question for you Ron. I had to change it because of the piece of information you shared there. If you had one piece of advice that you could share with me that lead to your success, what would it be?

 

[00:57:43] Ron: Get out of the way. Just get out of the way. The people that are around you have way more answers that can provide opportunities than you give them credit for. So, get out of the way and let it happen.

 

[00:57:57] Brad: Alright, great advice. Thank you Ron. Enjoy the rest of your Monday. Really appreciate you coming here today.

 

[END]