"Bullish on Canada - and Wabash"
Gary Reamey '77

"Changing Course, Full Speed Ahead"
Allan "Andy Anderson" '65


Magazine
Winter 1998

Looking for Mr. Drucker (John Bachmann p.3)

When Bachmann reflects on the company for which he's worked most of his life-a firm that has grown from two offices in 1955 to almost 4,000 today-he sees its history not in terms of dollars, but in the faces of the people who built it.

"Mr. Jones [Edward Jones, Sr.] poured a foundation; he created an investment business that treated people a certain way," Bachmann explains. That business, with one office in St. Louis, was committed to the city and believed the best chances for growth lay there.

In 1948, Ted Jones, the founder's son, made a decision that would turn the company 180 degrees the other way. Preferring to call on farmers and small-town residents, he found that not only did they have money to invest, but the people with whom they did business also had money to invest. By 1955, the company opened its first branch office in Mexico, Missouri, and the pattern for the next 30 years was set.

"Ted was the architect, the designer," Bachmann says of the man whose portrait hangs at the entrance to the company's 350-seat auditorium. "He saw what no one else saw, and he designed a business around that vision."

Jones believed the most effective way to reach this unserved rural market was to open offices in small towns and become a part of the community. He thought the best way to serve these customers was with a single representative in a single office in each town.

"Each Edward Jones office becomes an expression of how that person believes a business should be run," Bachmann explains. "By having one-person offices, we attract uncommon people-high achievers."

These high achievers are also given relative freedom in the type of partnership Bachmann says is necessary for the "knowledge workers" of today. "We have computers that look at the patterns of their trades to make sure they're not doing something that would be a violation," Bachmann says. "But those boundaries are like the edge of a canvas, and within the canvas there is an enormous variety in what you paint." Brokers seem pleased with the system. A 1995 survey in Registered Representative magazine found Jones brokers most satisfied among the top eight financial services firms when asked to rate their level of satisfaction with their employer.

That's the Edward Jones of today-a company that's gone far beyond what Ted Jones had built when Bachmann, searching for a way to help the company grow, sent him a memo in 1972.

"I told Ted that he had a strategy of the business that we all thought we understood, yet we all viewed that strategy a little differently and frequently made decisions that cancelled one another out," remembers Bachmann, who was in charge of long-range planning. "'If we could codify what you see,' I told him, 'so that we're all singing from the same sheet of music, then we could really focus our energy and resources into those things that make us distinctive.'"

Soon Jones and Bachmann were pouring through Management: Tasks, Responsibilities, and Practices by then rising business consultant Peter Drucker, whose portrait now hangs only a few yards from Jones' in the office lobby. Drucker and his works gave the partners "a set of instructions on how to build" the business Ted Jones had envisioned. When Jones handed the firm over to Bachmann in 1980, the new managing principal sought more direct involvement from Drucker.

In the spirit of his Wabash days, he spent a month crafting a letter to entice the 71-year-old, who was not seeking new clients, to take a closer look at Jones. "I had one chance to impress him with the fact that we were an organization that had embraced his way of doing things-a laboratory that affects his own work."

Among Drucker's first contributions as a Jones consultant was his insistence that one of the company's early assumptions-that its appeal was primarily to rural and small-town Americans-was dead wrong.

"Peter kept saying that our appeal was not geo- graphic," Bachmann says, becoming more animated as he explains the concept that was to bring Jones offices back into the cities and suburbs. "He helped us understand that we were successful because we appealed to a certain kind of investor."

It turned out there were even more of those kinds of investors in American cities than in rural areas. Armed with Drucker's methods, Bachmann became the "contractor" of the Jones expansion into the cities, skillfully building the strong management team necessary to maintain the firm's distinctive "customer-first" service while increasing the number of Jones offices from 304 in 1980 to almost 4,000 today. And he's not through yet, having set a goal of 10,000 Jones offices in the U.S., Canada, and the United Kingdom by 2004. (Next Page)

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