00:20:47 · Steve Stagner
[00:20:47] S0: it would be at our peril to not shift with the customer. So there was some research that I had seen, and I don't have the exact quote right here, but it was roughly 77% of the clients want a greater suite of services and 80% would switch for best in class technology. So if you break it down to the client, like as a client, how amazing would it be if I knew the status of my tax return all year and could see some technology and log on and to see where like the Domino's pizza tracker, but it's the tracker of my tax return and what's missing, what's in the oven and here's what's missing. But then on top of that, some dashboards for either business or personal where I could see kind of what's going on with my money and other things that are happening. We're working with the firm directly on client dashboards and the clients are loving it. And so what does that do for you, Miguel? That gives you a stickier relationship with the client, because the client now values the information and the intel and then what you're doing from that. And if you just look across the continuum of everything, like take, I mentioned Domino's. Domino's is really winning the pizza war based on technology. Starbucks is winning the coffee war based on technology because of the mobile app. So that's in the consumer space. So consumers always want more information, more transparency, they want speed, and they want accuracy. And so the more you can put that in front of them, that's gonna be who wins. I don't think it's a zero sum game. I think that, you know, there's a lot of really great leaders in this space and thought leaders and millions and millions and millions of dollars being invested. But I think, you know, for us and our firms, we really are going to go heavy and invest in technology that's going to help the client.
00:22:39 · Miguel Armaza
[00:22:39] S1: Speaking of the second leg of that stool, and that's your people. Yes. Like technology comes and goes, but you have some core principles about managing a workforce, motivating your team. Have you found your principles, your beliefs to have kind of been pretty steady throughout your career or have some of those things changed specifically about managing a workforce?
00:23:09 · Steve Stagner
[00:23:09] S0: Yeah, I mean, over my career, I believe in this philosophy of there's three reasons why humans go to work. And if you engineer your value proposition as a leader around these three reasons, then you gain the holy grail of commitment, not compliance. And there's a difference. Commitment is a choice people make and compliance is what you pay for. And so you can't like force commitment like, Hey Miguel, I need you to be more committed at work. I can force compliance, I need you to show up on time. But to force commitment, that's a choice people make. So how do you influence that choice? And so the three reasons are individual growth, cause and then reward and recognition. So if you picture a Venn diagram, what we focus on is individual growth and over my career, this hasn't changed. If you invest in people, it's an aid in us, we all wanna grow. You know people that have probably left companies to go work for someone else and make less money and when you ask them why they say, well, I wasn't growing, I wasn't being challenged. Like we as human beings want to grow. So if you put more challenge in front of people and more education, then what happens is they get more excited because then they get to apply that growth and it's really amazing. So you have to, you can't put the acorn in the ground and say, grow dammit, but what you can do is you can put the soil, the sunlight and you can provide the environment for growth and those who really wanna grow are gonna really grow. The second reason is cause that it can't just be about EBITDA, like EBITDA, EBITDA, EBITDA for the company doesn't matter as much to the common team member. So why are we doing this? And so improving lives of the people around us and improving the lives of our clients And if we can continue to evidence the things that we're doing to improve our world, then I think what happens is people feel more connected to the cause and more connected to their company and more proud of their company. They'll wear the shirts with the logos, they'll go out into town and they'll talk about it. And so the more we can do in the communities and help that'd be great. And then reward and recognition, we obviously need to pay competitively, but it's beyond compensation. It's also about recognizing what people are doing. So my view is those three are constant over time.
00:25:30 · Steve Stagner, Miguel Armaza
What's probably changed is what the generations value in terms of like percentages, like what they value. But I will say, for example, cause has become a greater component than maybe twenty five years ago when it was maybe just more comp, know, maybe more reward. Now that this newer generation really wants to believe that they work for a company that's making a big difference. But at the same time, my approach is we must do all three, we must invest in all three, and we must connect the dots with the team and the output is lower turnover, less people leave, and then higher recruiting, better retention, higher recruiting because people want to enroll and enlist and engage in this journey that we're taking because this journey sounds exciting. And because I can grow, I'm changing the world and I'm gonna be paid and people care. If you hit that sweet spot, you unlock it. It's amazing. So that's what we're trying to do. [00:26:26] S1: And Steve, one of the things that people are talking about in technology is just the fact that some of these AI first companies are growing faster. You see a similar effect post implementation of your tech stack or is it too early to tell?
00:26:26 · Miguel Armaza, Steve Stagner
[00:26:26] S1: And Steve, one of the things that people are talking about in technology is just the fact that some of these AI first companies are growing faster. You see a similar effect post implementation of your tech stack or is it too early to tell? [00:26:47] S0: Yeah, far too early for us to tell. I'm one hundred and fifty or sixty days in or so, and we're just getting started. I will say there is certainly some research out there that I think Harvard did a study or I think it was Bain or BCG did a study. And I mean, results were that the AI leaders, the AI people that were enabled with AI were 40% more efficient, did two to three times more productivity. Whether or not those facts are, I think that was from a book, The AI Driven Leader, but whether or not those facts are going to play out exactly that same way or not, what I can tell you is it's very, very clear that if you're not leveraging AI, you're going to get left behind. It would be the equivalent of not using the internet in 1990. And so I just, I think today we can laugh at that, but you know, there's just no way you could get by without it or, you know, I'm not gonna use email. This is not something that we can resist. So we need to adopt it. We need to enable it, and we need to get into it. [00:27:53] S1: Steve, why are roll ups cool again? Why is not just Thrive, but there are other large asset managers, right, implementing similar strategies to Crete, but in in different verticals.
00:28:10 · Steve Stagner
[00:28:10] S0: I think the the reason why if you zoom out on the industry, there's a talent shortage, and then there's this technology, the steep learning curve in this technology and the private equity has entered the space. So a lot of firms hit walls and I go across the mattress industry, the veterinarian clinic industry, the HVAC industry and the roofing industry. And what happens is an entrepreneur starts off and builds a company to a certain point. I was that entrepreneur, I built my company to a certain point. But for me to go from zero to 50 stores, it took me eight years. But to have access to the capital, the technology and the intelligence and the data the data driven decision making that comes with partnering with a private equity firm is a game changer. Accelerated not only my life, but my company at Mattress Firm to birth a national chain in a category that was very fragmented and there was no national chain. That would not have happened, not as fast and it would probably wouldn't have happened at all, because what happens is you Peter principle and you hit this scale where if you don't have the infrastructure, you really can't get there. So that's constant across all these industries. And I talked to these entrepreneurs that I relate to very well, that they've kind of hit a wall, They want to know how to get to the next level, but they just kind of their growth starts to slow over and it's just how do I get there? So the network effect is really important. So how do we come in and then we provide that network effect so that we can help them get over the pioneer tags of learning. Like we've already tested this technology and here we can give it to you. We have access to this data. We have like for example, take going to India. I've talked to a lot of firms that do offshore, but India is an extremely nuanced country. I just flew over there and spent ten days or roughly ten days. And we are putting boots on the ground leadership over there and investing heavy in partnerships, strategic partnerships over there and technology. Well, if you're a mid size or small firm, you want to access, you know, kind of having extra capacity, but doing it well and doing it right. Do you have the time or the knowledge to hop on a plane and fly for sixteen hours and then know where to go in a country you've never been in and do it really well.