One of the most delicate and potentially dangerous issues companies face is the transition from one chief executive officer to another. Or, for that matter, the transition of leadership at lower ranks in the company as well.
A mistake can take years to recognize and correct.
“We use a saying around here a lot that success demands a successor. We’ve had a lot of success as a company. We’ve got to put people in place after us who are positioned to do an even better job than what we did when we were in our respective roles,” said Mark Steffe, the recently named president and chief executive officer of First Command Financial Services Inc.
He replaced Scott Spiker Jan. 1, 2020. Spiker will serve as executive chairman of First Command through the end of September 2020, at which point he will assume the role of non-executive chairman of the board.
It was a transition years in the making.
“It became evident several years ago that Mark was the right person to lead First Command when I stepped away, and we were very purposeful about planning and executing a process that provided Mark with all of the tools necessary to seamlessly transition into the CEO role,” said Spiker.
The in-depth transition plan included working with an executive coach, immersing himself in unique leadership assignments, expanding his knowledge through coursework and engaging with military families and military leaders, Spiker said.
“The strength of the entire leadership team is evident right now, as is the depth of the bench that’s been developed during the transition process. These are both major advantages for an incoming CEO,” he said.
First Command Financial Services is a financial planning company that specializes in serving people in the military. It was founded in 1958 and has about 600 employees in Fort Worth and has 178 offices worldwide, most located near U.S. military bases.
Steffe is the first CEO in company history who did not serve in the active military, but he has a decade of experience working with military families. He also is from a family where other members served.
He joined First Command in 2010 with 19 years of experience in the financial services industry. He became president in 2017 and chief operating officer in 2018.
When he took the job, he knew that he had a shot at the top job – not guaranteed but possible – when Spiker decided to step down.
It became a serious possibility about three years ago.
“We laid out a painstakingly detailed development plan that Scott and I and our head of HR worked on – really on a monthly basis – for the last three years,” he said.
Spiker had kept the board of directors in the loop, and when everyone thought it appropriate, the executive team was notified.
“Mark has been immersed in the culture of First Command for a decade now and, while that doesn’t equate to personal military experience, it has provided him with the ethos of service to the military necessary to successfully lead this organization,” said Spiker. “Mark has demonstrated repeatedly that he understands the challenges faced by our nation’s military families and that he has the leadership skills to guide the organization in its efforts to make lifelong financial security possible for all military families.”
The company was founded by World War II veteran Carroll H. Payne, who flew B-29s in what was then the Army Air Corps. During the war, he realized that when someone died in action, it meant that a family somewhere had also lost a breadwinner.
Later, at Eglin Field in the Florida Panhandle, he saw military retirees whose pensions did not cover their living expenses. He swore that wouldn’t happen to him and when he decided to retire from the service in 1958, he founded a company called USPA, which became First Command Financial Services, to assure that it didn’t have to happen to others.
First Command Financial Services is a private company owned by the employees through an employee stock ownership plan started almost two decades ago. It’s now a Subchapter S ESOP. The company has about 50 officers, who together own roughly 20% of the shares.
When Steffe’s promotion was announced, the company also announced that Amy Doherty, who joined First Command after serving as the chief information officer for AARP, had been named executive vice president and chief operating officer.
Steffe said Spiker has been great at developing people and thinking through succession plans with the board of directors.
And not just for the CEO role. The leadership team looks at succession formally twice a year and an informally throughout the year, checking who is in line, what talent they have onboard and what talent they need to develop or add from outside.
“This is an ongoing and active process for us,” he said.
There is an 11-member leadership team including Spiker, and First Command takes pride that four members are women.
Excluding Spiker, that means 40% of the team is female in an industry where the average is around 20%.
“We’re proud of that,” Steffe says, but adds that the company likes to think in terms of inclusion rather than diversity.
“Inclusion, we believe, are the actions you go through. Things like ensuring people feel comfortable at First Command, and that no matter where you come from, you feel valued,” he said.
“We find if you’re more inclusive as a company and you treat people well, which we always have, and you value them and they feel trusted and empowered, you’ll attract more of all types of people to First Command,” he said. “And then the result of that activity is a more diverse workforce and that gives both us and them an opportunity to grow and succeed in the company.”
It’s an important issue for him personally.
“I’ve got a 14-year-old daughter at home and I think from birth we’ve raised her to be a strong independent person and thinker and I want her to have the same opportunities that I’ve always had. I don’t ever want her to be eliminated because of her gender. So not only is it a good business decision for us, but there’s a personal piece for me that that makes it real,” he said.
First Command Financial Services Inc. has investment, banking and insurance aspects to it, so it can offer people in the military plans that will still work once they leave the military, which most clients do.
Financial planning is free to active duty personnel and they are not wedded to a specific adviser so that their plans – stored in a home office database – are portable as they transfer from base to base. Plans developed in the field are reviewed by people in the home office, so clients get the benefit of multiple eyes on the plan.
Unlike most financial services companies, there’s no minimum account size, Steffe said.
“The saying around here is that we don’t chase wealth, we build it,” he said.
Advisors work with enlisted personnel as well as officers and help them get on a path to financial success. That might mean a small number of dollars a month in a mutual fund, a small insurance policy and a small savings plan.
But often, the starting place is credit card debt. Because First Command has a bank, advisers can consolidate that debt down from 26% to between about 8% to 11% debt on a bank loan. The reduction in monthly debt payments puts clients in a position to start on an investment plan.
The way the management team at First Command works, don’t expect big changes under Steffe because the next steps have been under discussion for a long time.
“Any of our major decisions for the last several years, we have worked on collectively,” he said.
The company developed a set of strategic intentions in 2009, which is frequently revisited.
“We’ve stayed on those five strategies pretty consistently for the last several years and so if there was any disagreement or a view that we should go a different route, we’ve all had plenty of opportunity to speak up, have our input heard, have the business plan molded where that input needs to be factored in,” Steffe said.
It’s part of that plan, but there currently is some concentrated effort on customer experience – not new but accelerated.
“We need to become quicker, more nimble and adopt an agile approach and we’ve been working on that for the last several months,” he said. “A lot of times what you’ll hear us say, ‘Further, faster, better.’ How can we deliver more value to our clients and to our field force faster, better and more than we ever have in the past.”
Time was clients compared experience with a financial company with other financial companies. That’s changing.
“Now, their points of reference are whatever other experiences they have. So, if they look at our website or our mobile app, they’re not comparing it just against other banks or credit unions, investment companies, insurance agencies, they’re comparing it against Uber or Amazon or whoever else. And they expect the experience with our digital capabilities to be as good or better than the other capabilities,” Steffe said.
He’s in the current class of LeaderPrime, the Leadership Fort Worth program for CEOs new to the area or to the job and designed to introduce people across the traditional silos.
First Command – despite its size and success – has a relatively low profile in Fort Worth. So, what would he like people to know?
“This is a great company and, for me, a jewel in the heart of Fort Worth,” Steffe said.
He had never heard of First Command when he was recruited, but from the start, he admired the passion and dedication First Command has for serving the men and women in uniform.
“A lot of companies talk about putting their clients front and center of all their decisions and really taking care of their clients,” Steffe said. “This is the first company I’ve worked for that did it all day, every day.”
He’d like Fort Worth residents to understand the size of the company and the motivation to service that drives.
BY THE NUMBERS
First Command Financial Services
4200 S. Hulen St.
Fort Worth, TX 76109
1958 – Year founded in Fort Worth
1985 – Year moved to current location
600 – Number of employees in Fort Worth
280,000 – Approximated number of military families served
74 – Percent of customers active duty or retired/separated military
$30.0 billion – Funds in managed accounts and mutual funds
$60.2 billion – Life insurance coverage in force
500 – Approximate number of financial advisors
8 of 10 – Ratio of veterans or military spouses among financial advisors (note: if you want to use a percentage, it is 84%)
5 – Ranking among military brands
178 – Number of offices worldwide
25,000 – Approximate number of hours donated to military and other charitable causes by First Command personnel in 2019
2 – Number of days company gives of paid time in addition to vacation and holiday leave for volunteer work
Hundreds – Number of events local offices sponsor on military bases across the country and abroad
7 – Percent of profits donated to current charitable organizations.
Source: First Command Financial Services
Military Engagement. This strategic priority is the center of our focus on our Vision and Mission. Military Engagement encompasses a variety of initiatives to support deserving military families. These initiatives guide us as we continue to hire and retain a robust Advisor force to provide face-to-face, personal financial coaching to our core market. And they allow us to expand our presence on or near military installations to serve more military families.
Advisor Lifecycle. Advisor Lifecycle is focused on aligning the wants of the future clients we wish to attract and the needs of the existing clients we serve with the missions of the various markets in which we operate. Through this alignment, we will create a stable, financially healthy Field Force that is well positioned to meet the needs of our clients at every life stage.
Client Experience. We are committed to being a uniquely relevant brand for our core market that is differentiated from our competition and positioned for ongoing growth. The realization of that commitment means that we must increase our relevance to military family prospects and create lifelong, loyal clients. This lifetime experience must extend well beyond the military service to ensure that we provide our clients a great experience at every touch point regardless of their stage in life.
Digital Transformation. We seek to create a digital experience that our clients expect while complementing and preserving the face-to-face coaching relationships with Advisors. Success demands delivering a superior digital client experience that integrates seamlessly across all our products and services and across all relevant channels.
Leadership & Culture. As our company continues to mature and grow, we are building the necessary leadership competencies to respond to and extend our capabilities to address:
• the challenges of the market,
• our competitors,
• the changing needs of our clients, and
• the expanding regulatory framework.
We need to extend our leadership for the present and cultivate new leaders for the future. We will enable our leaders to create an inspiring environment that empowers their teams to meet the demands for ongoing innovation and of the fast pace of change.
Source: First Command