Trust the Process

The Philadelphia 76ers mantra has been “trust the process” after their GM, Sam Hinkie, was hired in 2013.  Mr. Hinkie said, “We talk a lot about process – not outcome – and try to consistently take all the best information you can and consistently make good decisions. Sometimes they work and sometimes they don’t, but you reevaluate them all.”

The process took time to take hold as the team won few games from 2013 to 2017. In 2016 they only won 10 games.  In fact, they were so bad they broke the NBA’s record for consecutive games lost.[1]

Because of their dismal performance, they were able to draft elite college talent through the league’s lottery pick system including Joel Embiid, Ben Simmons and Markelle Fultz.

Finally, in 2018 the process worked as they won 52 games and won their first playoff game since the 2012 season.

The process worked for Mr. Hinkie and the 76ers because he offered the fans a “concrete plan based on quantitative analysis.”   It appeared everybody was on board with the process except the owners and in April 2016 Mr. Hinkie stepped down as the GM.  Now that the 76ers are winning it appears the process is working, and Mr. Hinkie has been vindicated.

Financial planning is a process.  The gathering of your data and the discovery of your goals are major components for a successful plan. The journey to your finished product can be more important than the plan itself.  It will be your financial playbook expressing how best to approach your goals and investment selection by highlighting the strengths and weaknesses of your finances.  Once these items have been identified, you can focus your efforts to improve your finances by enhancing your strengths and improving your weaknesses.

After your plan has been implemented it’s important to reevaluate it often.  An annual check-in is recommended.  The review and analysis of your plan will allow you to make the necessary changes so that you can keep your financial team moving forward.

It may take years before you reach your goals, so patience is required.  The 76ers waited five years before they obtained their goals of reaching the playoffs.  They’re now winning and enjoying the fruits of their labor.  You may suffer setbacks along the way to obtaining your goals but if you follow your process you’ll be able to enjoy the fruits of your labor as well.

“If you can’t describe what you are doing as a process, you don’t know what you’re doing.” ~ W. Edwards Deming

 

Bill Parrott is the President and CEO of Parrott Wealth Management an independent, fee-only, fiduciary financial planning and investment management firm in Austin, TX.  For more information please visit www.parrottwealth.com.

4/16/18

Note:  Past performance is not a guarantee of future returns.  Your returns may differ than those posted in this blog and investments aren’t guaranteed.

 

 

[1] https://qz.com/890093/trust-the-process-how-three-years-of-losing-on-purpose-turned-the-philadelphia-76ers-into-winners/, Dan Kopf, January 28, 2017

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