Tuesday Email: When Your Best Process Becomes Your Worst Habit

Happy Tuesday!

Every Tuesday, I share one idea worth sitting with before the week gets away from you. Not a checklist. Not a framework. A perspective on what it really takes to build something that lasts — and a challenge to the way you're thinking about what comes next.

This newsletter isn't for everyone.

If you're genuinely satisfied with where you're at, in your career, in your firm, I respect that completely. But if you're still reaching for the next plateau, read this one carefully.

The thing most likely to hold you back isn't a bad process. It's your best one.

The core paradox is this: the processes that grew us to where we are won't get us to where we want to go.

Growth is not a straight line. It's a series of plateaus, each one requiring a different approach than the one that got you there.

The RIA that grew from $100M to $1B didn't do it the same way the entire journey.

It moved through distinct phases: a couple of people doing everything themselves, then more people with a cowboy mentality, then something more structured.

The artisan model that defines most firms at the start, the founder's bespoke, high-touch, deeply personalized service, is the primary driver of initial success. And it inevitably becomes the worst habit of a maturing organization.

That doesn't mean abandoning white-glove service. It means figuring out how to institutionalize it. How to standardize it. Not to diminish the value, but to empower more people in your firm to deliver it consistently.

Back in 1988, two researchers named Levitt and March studied why successful organizations stop improving. What they found was uncomfortable. They called it the competency trap.

The core idea: organizations become collections of routines built on past success. What worked gets encoded into SOPs, rule books, shared perceptions. These become the firm's memory. The problem is that the further we get from the original moment of success, the blurrier those routines become.

I'm a golfer. I ebb and flow. When I'm playing well, I try to hold onto whatever I was doing and replicate it. The closer I am to that moment, I can. But as time passes and I play less, my memory of what actually worked gets replaced by what I think worked. It becomes more myth than method.

We do the same thing in our firms. Every single day.

When a routine produces a favorable outcome, we get better at it. That increased competence produces even better outcomes. A self-reinforcing loop forms. And that loop quietly kills our instinct to search for something better.

Competence creates complacency.

Inside an RIA, we all have specific processes we need to execute: opening accounts, scheduling reviews, trading, building financial plans.

We get so good at doing them one way, the way of the past, that we stop looking for better ways. As technology evolves, as new people join, as the firm grows, as client needs shift, we stay true to what's always worked. We do this at the expense of evolving.

There's something even harder at work: a pull toward certainty that lives deep in how firms allocate energy.

Every day, our firms are making a choice. We may never name it, may not even notice it. But we're choosing between exploitation and exploration.

Exploitation is the daily work: managing portfolios, running reviews, executing the service model. It's predictable. Comfortable. Essential.

Exploration is something else entirely: piloting a new niche, testing a team-based service model, trying a new planning approach. It's uncertain, distant, and uncomfortable. Not many people raise their hand for that.

The success trap exists because exploitation is seductive. If you put $1 million into refining your existing sales process, you have a 90% chance of a predictable return. Put that same million into exploring a disruptive new model and you might have a 10% chance. Logically, you put your chips on exploitation. Every time.

The problem is that exploitation slowly chips away at your edge. You don't feel it happening. You feel competent. You feel like things are working. Then one day you get punched in the face.

Exploration doesn't work as a rescue plan. You can't just turn it on. It's built chip by chip, slowly, where no single step feels like progress, until suddenly it does. The great firms are doing exploitation for today while quietly exploring what comes next.

This tension doesn't show up randomly. It shows up at very specific moments in a firm's life.

There's a concept called the transition from the go-go years to the adolescence years. Go-go is chaotic, high-energy, founder-led, entrepreneurial. It feels like success because it is. But it also builds a dangerous dependency: on individuals, on the founder's way, on the energy of a few people rather than the capability of a system.

In this transition, something painful tends to happen.

The people who helped make the go-go years successful believe they've earned a place at the table in the adolescence years. And they're not wrong to feel that. But the skills that built the firm aren't necessarily the skills the firm needs next. That tension is real, and it's one of the hardest things to navigate as a leader.

Geoffrey Moore talks about the difference between pioneers and settlers. I'm a pioneer. I live there. I love the vision, the chaos, the startup energy.

But as a firm matures, pioneers become a liability if we don't adapt. We resist the settler work: the administration, standardized workflows, institutionalized service. The value proposition has to shift from individual charisma to firm capability.

This is one of my biggest personal struggles. I know our firm needs to be in a settler era. And I know that if I hold it back by refusing to build process and standardization, I'm stunting our growth. Pioneers have to find a way to keep exploring while enabling the rest of the firm to exploit well.

We've been through this transition multiple times.

What I've learned is that it's never dramatic. You don't flip a switch. You look back and see the evolution. While you're in it, it's harder to see. The key is staying open.

When we were around $2B to $3B in AUM, we wanted better visibility into our numbers. My dad had founded the firm and understood the finances in his own way, but now there were three of us trying to make growth decisions: where to invest, what to build next.

The old approach wasn't giving us what we needed. So we started working more closely with our accountant, then brought in a fractional CFO.

That decision changed everything.

For the first time, we had real modeling: if markets do X, what does it mean for revenue? If we make this hire, what does it do to cash flow?

When COVID hit, we didn't panic. We stress-tested the firm against different market scenarios. We knew the numbers that would trigger cuts before we had to make them. We made better decisions as a leadership team than we ever had before.

Eventually our fractional CFO moved on and we built out a full-time CFO and a proper bookkeeping structure. Now we can build strategy with a real foundation, looking two, three, five years out.

None of it happened overnight.

We started with our accountant. Added a fractional CFO. Built from there. Each stage was exactly what we needed at that moment. We didn't need to hire a full-time CFO on day one; we didn't even know enough to know what we needed.

We started exploring and added chips over time.

So how do you know which of your current processes are holding you back? There's a practical way to audit this.

Three dimensions. Each one tells you whether you're a scale-enabler or a scale-limiter.

Personality-to-process ratio. Does your workflow only work because one or two specific people know how to do it? Or can any trained team member execute it consistently, because it's built into your systems? If someone steps out tomorrow, can someone else step in? If not, you have a dependency problem.

Integration depth. Is data moving seamlessly through your systems, or is someone manually bridging the gaps with a spreadsheet? This is the hardest dimension and the most costly. Fixing it requires investment in technology, time, focus, and a real understanding of how your firm actually operates. Most firms are further behind here than they think.

Exploration-exploitation balance. Is 100% of your team's energy going to current operations, or is there protected time to explore what comes next? Research has found that slow learners, people who are slower to adopt the organizational code, actually contribute more to long-term knowledge by maintaining diversity of thought. When new people join your firm, that's your best window to challenge the way you've always done things. Every new hire brings a different lens. Use it.

The deepest shift isn't operational. It's personal.

The mentality that makes a Futureproof advisor is moving from star advisor to enterprise architect. The question stops being how good you are and becomes: have you built something that works without you?

That's the definition of a business. Something that's empowering, influential, impactful, whether you're there or not. If it only works because of you, you haven't built a business. You've built a job.

We can't let the processes that got us here keep us from getting to where our clients will need us to be.

So here's the challenge: the moment you think you have it figured out, be prepared to change.

Not because what you built was wrong. Because you're ready for what comes next.

The best is ahead!

-Matt