Strategy vs tactics as bets on different time horizons, and pricing risk in money and time: Jon Mark of Vestwell

The strategy vs tactics distinction usually gets drawn as a difference in kind. Jon Mark's version is that they are the same thing on a different clock, and once you accept that, both become a question about which bets you are placing.

Mark is COO of Vestwell, the digital platform for workplace savings and investment programs, powering nearly 25,000 small businesses with more than a million savers and $25 billion under management across all 50 states. The company has raised over $238 million, most recently $125 million led by Lightspeed at the end of 2023, in what Michael rightly notes was one of the hardest fundraising environments in a decade.

What Vestwell is actually doing

Every tax-advantaged savings product comes with its own administrative complexity and its own education problem. Mark's description of the company's job is to make that simple, distributed through workplaces, so people can find the next best dollar to put to work against their own goals.

The starting point was 401(k) and 403(b) plans, but with a specific angle: taking that experience and making it work for a small business. Easy administration with real payroll integration, and an interface where a saver can take every action they need to take on a portal, in an industry where printing a form and faxing it is still a live practice.

From there the ambition widened. 529 education savings. And most recently the acquisition of a student debt paydown product from Morgan Stanley, so employers can help employees reduce student loan debt.

The framing that ties it together is incentivizing any good financial behavior that helps people put their money to work, treated holistically rather than as separate products.

The scale of the gap

Michael raises the warnings in circulation about retirement preparedness, including from the largest asset managers, and asks what Vestwell sees.

Mark confirms it, and adds that plenty of people have seen this coming for some time. Vestwell is the largest provider of state-sponsored retirement programs, the auto-IRA schemes where a state mandates that employers above a certain size offer a payroll-deducted IRA if they have no retirement plan.

So government, advocates and the private sector all recognize the problem. His argument is that the difficulty was never awareness. It was building a product with the ease of administration, cost profile and feature set to actually solve it.

His illustration is precise. If you are a tow truck company in Nebraska being told your option is an expensive and onerous product your employees may not even want, that is unappealing. But if the product actually fits the need, then something that has to be done can be a pleasure rather than a burden.

The number that frames the opportunity: of roughly 33 million businesses in the United States, only around three million have a retirement plan.

The Gen Z shift

An observation worth noting from the middle of the conversation.

The conversation has moved from retirement savings toward student debt, and Mark's read on why is that Gen Z is acutely aware of how much debt they carry, sees government promises not materializing, and is confused about what the right action even is. Some believed their debt had been cancelled, stopped paying, and now have credit score problems.

Which is the commercial logic for the holistic approach. A benefit that helps with debt is a genuine tool for attracting and retaining that talent in a way a retirement plan alone is not.

Where AI fits, and where it does not

Vestwell has around 30 areas under evaluation in its AI strategy.

Mark's personal observation is the one that generalizes. When he looks at genuinely complicated, nuanced questions in the retirement and education savings space, one of the best tools for explaining them turns out to be a language model, because of how well it takes something complex and reduces it.

They launched a chatbot into the platform, and the interesting data point is what people asked. Within three days there had been 500 conversations, and they were not all procedural questions about how to access money. People were asking whether they should be saving now, at 26 years old. They were looking for an intelligent agent to understand their situation and start advising them.

Where Mark draws the line is instructive, and it is a genuine strategic position rather than a hedge. Vestwell has always believed in the importance of the financial advisor, and he thinks the blend of the two is what actually delivers good advice.

His reasoning: a model can make the esoteric simple, but it is hard to imagine a computer absorbing everything, understanding the emotional dimension of financial decisions, and then delivering advice. What changes is where the advisor spends time. Less on explaining basic concepts, less on administration, and more on the specific work of getting a well-informed person onto the right path.

Operationalizing the tax code

Michael asks how heavy regulation shapes operations, and Mark's reframe is the best sentence in the episode for anyone in a regulated industry.

All of these tax-advantaged savings products amount to operationalizing the tax code, within the constraints of what the regulations permit.

Which turns his job into a defined puzzle: inside a fixed set of constraints, build something through people, process and technology that is a good experience for the customer and efficient for the company.

It is also how he briefs anyone joining Vestwell in a leadership role. You are coming into a genuinely complex space and you have to work out how to abstract it, generalize it, and build inside very complex constraints something that has resisted automation.

And his explanation for why so few have tried is worth sitting with. It has been easier for most companies to throw bodies at the problem, finding labor in cheaper geographies, than to solve the underlying technical problem, or the underlying thinking problem of how to conceptualize the right approach within those constraints.

Two things in your control

Asked how he moved from SVP of Strategy and Operations into the COO seat, Mark gives an answer he says is deliberately actionable, because the question is almost always really about how to replicate it. Both things, he stresses, are within your control.

The desire to deeply understand the substance of the problems you are solving. Not approaching it with a stack of business school vocabulary, but understanding the cause and effect relationships between the concepts, what the implications are, and reasoning through them. He believes some people start stronger at this, and that it is trainable like any muscle.

Finding people who take an interest in your development. His distinction: there is a large difference between a manager who uses you as a cog in the machine and someone who wants to pour themselves into you. And crucially, while you are sometimes at the mercy of who you work for, you are also in charge of picking who you work for.

His summary: natural curiosity paired with good mentorship is the fastest route to an accelerated career.

How he actually found the mentors

The tactical version is more useful than the principle.

Early on, he chose Bridgewater specifically because developing talent is part of its ethos. That, he argues, is the thing you can assess from the outside, and it matters most at the beginning of a career.

Once inside a place like that, you can evaluate individual managers. Talk to peers. Find out who is genuinely good at development. Mark changed managers several times inside Bridgewater in pursuit of whoever could give him what he needed at that point.

And when he moved to Vestwell, his criterion was to work for someone strong in the things he was not yet strong in, in a role that was roughly half within his existing capability and half outside his comfort zone.

On imposter syndrome

Michael raises the obvious consequence of deliberately taking a job you can only half do.

Mark's answer is direct: it is a thing for everyone, and anyone who says otherwise is lying. He acknowledges that may sound arrogant and says he holds it with conviction anyway.

What got him past it was the same instinct as everything else. Understand the situation. If you can understand the problem deeply, arrive at a solution, and see a path from A to Z, you may still feel unqualified, but you can demonstrate a practical path to resolving what needs resolving.

Where he finds it genuinely insurmountable is when you are so far out of your depth that you cannot reason through the problem at all and there is no vector to start from. And that, he says, is what mentors are for. Phone a friend. A little clarity goes a long way toward getting from A to B, and getting from B to Z is usually simpler than it looks.

How a COO asks questions without micromanaging

Mark's method has two parts, and the second is the one people get wrong.

The first is disposition. Ask a lot of questions, and ask them in a way that disarms people, because you genuinely are just trying to work out how to make this better. He acknowledges people get nervous when a COO starts poking at how something works, and the antidote is everyone understanding that they are safe and that this is about winning together.

The second is separating the inquiry from the action. He may end up talking to someone three layers down in a different part of the organization because he needs to understand how something works to make another decision. He is not going to tell that person what to do. He takes what he learned to the right place in the organization and has the conversation about what to do there.

The risk tolerance story

The most memorable moment in the episode is domestic.

About six years into his relationship, Mark's partner said they did not understand how two people with such different risk tolerances could like each other.

His answer was that they have roughly the same risk tolerance. Which produced the look you would expect, because from the outside he appears far more willing to take risk.

His explanation: he digs deep enough to understand a situation that he becomes willing to take the risk. What he is not willing to do is look at something, register that it is risky, and do it anyway.

Which is the whole argument for deep understanding, applied to risk. He frames it as the difference between leaders who see risk as an impediment to getting results and those who can navigate it to make smart calls, which is difficult when you are growing at the pace venture backing demands.

Price every risk in money and time

Asked for tactics, Mark warns his answer may sound pedestrian, and it is the most practical thing in the conversation.

Tie every risk, through a chain of cause and effect, back to money and time.

His objection is to the vocabulary. Someone says this is a risk of ruin event, everyone agrees it must be avoided, and Mark asks why. What is it going to cost? How much time will it delay, and delay what?

The discipline is forcing everyone around you past the buzzwords. Not stopping at "we will never pass our compliance audit and all our big clients care about that," but continuing to what that costs in money and time.

What it produces is an organization that can genuinely price risk. His example of the output: this is a risk of about $200,000 if it goes wrong, that is the maximum we identified, and the upside of doing it is roughly $100,000 of revenue. At which point the answer is obvious to everyone and the decision takes seconds.

And the benefit is distribution. The people doing that thinking may not be the ones who make the final call, but if they do as much of the reasoning as possible, his job gets easier.

Strategy and tactics are the same thing on different clocks

Michael's framing of the problem is that people believe they are forming a strategy when they are actually assembling a series of tactics toward an outcome.

Mark's answer collapses the distinction. Strategy and tactics are roughly the same thing on a different time horizon. In both cases you are choosing what to bet on.

If he is working out how to have a sustainable, high-margin business three years from now, he is placing a set of bets today that should deliver it. If he is thinking about how the next board meeting goes in three months, he is placing a different set of bets toward that result.

What differs is the size of the bet, the horizon it plays out over, the cost, and the expected payoff. Everything else is constant adjustment, because he cannot recall a time at Vestwell when he could lay out every detail nine months ahead and have it play out as prescribed.

He credits the framing to Bridgewater, where every decision was made as an expected value calculation, which he describes as training everyone to become poker players.

Why they are staying in small business

The standard software playbook is to establish a foothold in small business and then build up through mid-market to enterprise. Michael asks whether that applies.

Mark's answer is that mid-market is within reach, and that the growing ecosystem of emergency savings, student debt paydown and retirement is what makes them interesting there.

But the focus remains small business, for a reason that is both commercial and mission-driven.

Commercially, the market is enormous: 33 million businesses, three million with a plan.

And personally, his reasoning is worth quoting in substance. A mid-sized business would have had a workplace savings platform regardless. He gets more excited about putting a benefit into the hands of people who would not otherwise have had access to one. He chose Vestwell because growth and mission tied together in a way that made the work valuable to him beyond shareholder return.

How they evaluate acquisitions

There are many headline reasons to acquire: revenue, a new product, talent that is additive to the strategy.

What Mark insists on is a cogent deal thesis for how the acquisition benefits the business, and continuous measurement against it.

Every Vestwell acquisition has been a product that moves them closer to the mission of closing the savings gap, with a clear path from the price paid to positive growth.

He acknowledges this sounds simple and possibly obvious. His defense is that if you are not comparing expectations to outcomes continuously, you will regularly miss the mark, and nobody wants that.

One anchor metric, and a channel showing the numbers

Asked how the mission stays live rather than decorative, Mark gives two mechanisms.

A tangible north star. Closing the savings gap is an ethos, and you cannot attach a number to an ethos. So the company anchors on funded accounts, or in the case of the debt product, active users. His point is that you need one anchor metric that matters more than all the others.

Clarity of objectives plus a transparency forum. The executive team invests real time building an annual OKR framework. The headline objectives barely change year to year, because the story is consistent: add distribution, connect more businesses and individuals, get more accounts funded, do it efficiently, manage risk. What changes is what sits underneath each one.

Then the visibility. A KPI channel in Slack showing monthly progress. All-hands meetings covering the results and what they are doing differently as a consequence, including where something is stumbling and what they learned.

His reasoning for why the communication matters is the part I would keep. Most people want to do a good job, and they cannot do a good job without the broadest possible picture of what is happening, because that is what lets them make the right micro decisions in whatever seat they occupy.

Three phone calls in one evening

Mark's crazy story is a demonstration of what generalist actually means, on the night before closing an acquisition.

At around five or six in the evening, a call about security not approving how the engineering deployment pipeline would work for the incoming team. He had to teach himself what that was and propose an alternative.

Then a call about the health plans working differently than expected, which would have left every incoming employee with a month-long gap in healthcare coverage. He had to go and learn a part of retirement and benefits law he did not know, and by half past six they had a solution with no lapse.

Then, around seven, the discovery that a service agreement forming part of the closing had been built to cover mutual funds but not exchange-traded funds. By eight they had worked out an acceptable set of terms.

Everything was signed the next day.

His summary is the right one: if you need proof that a COO has to handle a wide range of domains, try solving healthcare, engineering and asset servicing in one evening. He remembers it as a good night.

And his correction when Michael credits him: he made judgment calls, and all the information and every idea about what might solve each problem came from the team.

The 5 things I took away from this conversation

1. Strategy and tactics differ by clock, not by kind. Both are bets. What varies is size, horizon, cost and expected payoff. I find this more useful than any of the taxonomies, because it makes the actual question obvious: what am I betting on, and when does it have to pay?

2. Force every risk into money and time. This is the one I am implementing. The moment someone says something is a risk of ruin, ask what it costs and what it delays. It converts an argument about vocabulary into an arithmetic problem most teams can solve themselves.

3. You pick who you work for. Jon's point that you are sometimes at the mercy of your manager but always in charge of choosing them is a useful corrective. He changed managers repeatedly inside one company in pursuit of development, which most people never consider as an option.

4. Take the job that is half outside your capability. And expect the imposter feeling, which Jon says is universal and that anyone claiming otherwise is lying. His antidote is not confidence, it is understanding: if you can show a practical path from here to the outcome, the feeling stops mattering.

5. One anchor metric that outranks the others. Vestwell's mission is closing the savings gap, which cannot be measured. Funded accounts can. Every company I have worked at has had a mission statement and most have not had the number that stands in for it.

FAQ

What is the difference between strategy and tactics? Mark's view is that they are fundamentally the same activity on different time horizons. Both involve choosing what to bet on. Strategy places bets that pay out over years, tactics place bets that pay out over weeks or months, and both differ in size, cost and expected payoff rather than in kind.

How should a company assess risk? By tracing every risk, through cause and effect, back to money and time. Mark's discipline is refusing to accept category labels like risk of ruin without asking what the exposure actually costs and what it would delay, which lets teams price risk themselves rather than escalating it.

How do you get past imposter syndrome in a new role? Mark argues everyone experiences it and the way through is understanding rather than confidence. If you can grasp the problem deeply, reach a solution, and demonstrate a practical path to it, the feeling stops being decisive. Where you cannot reason through the problem at all, that is when to call a mentor.

How does a COO investigate without micromanaging? Ask questions with a disposition that makes clear you are trying to improve something rather than assess someone. Then separate inquiry from action: gather understanding wherever it lives in the organization, but take any decision about what to change to the person who actually owns it.

How do you keep a company mission from becoming decorative? Attach a single anchor metric to it that outranks every other number, then make progress visible continuously through a metrics channel and all-hands discussion of what is working and what is not. Vestwell's mission is closing the savings gap; the metric is funded accounts.

Also mentioned

• Vestwell, its workplace savings platform and state-sponsored auto-IRA programs
• The student debt paydown product acquired from Morgan Stanley
• Bridgewater, where Mark learned to treat every decision as an expected value calculation
• Lightspeed, which led the $125 million round at the end of 2023
• 529 education savings plans, and the broader set of tax-advantaged vehicles Vestwell administers

Listen to the full episode

Jon Mark on Between Two COO's

Between Two COO's is hosted by Michael Koenig. Subscribe on Apple Podcasts, Spotify, or wherever you listen.