he $405 million acquisition of Wave Financial wasn’t about H&R Block’s image — it was a move to join like-minded companies in the trenches of innovation, no matter the weight either surging business holds, said Jeff Jones.
“We knew strategically that industry makes Wave a fit with H&R Block, and then it was a matter of ‘What do we do?’” explained Jones, CEO of H&R Block.
The Kansas City legacy company reached out to Toronto-based Wave and started conversations about the acquisition — which was announced Tuesday alongside H&R Block’s fiscal earnings release — a few months ago, Jones noted.
“They’ve taken a really complicated topic — which is accounting, invoicing, payroll and payments — they’re so well known for just having a beautiful, simple user interface. … We saw that and then we saw their roadmap and just how many new things have introduced [in the last nine years,]” he said.
Fully aware of how Wave was churning a new tide in a complex industry, Jones said H&R Block immediately started to look at where a partnership with the small business could benefit customers on both spectrums.
“Their clients are asking for tax help and our clients are asking for more bookkeeping help. So we know there’s synergy there, but [benefiting ourselves] is actually not our first priority,” Jones explained. “The first priority is to do everything we can for them to stay on their own growth trajectory.”
As a result, Wave will maintain the leadership of Kirk Simpson, co-founder and CEO, Jones added. The company also will remain in Toronto.
“We are excited to work together to deliver additional value to small businesses to help them succeed,” Simpson said in an H&R Block release.
The acquisition of Wave is expected to generate $40 to $45 million of revenue in the 2020 fiscal year, the company estimated in a release.
Jeff Jones, H&R Block
A champion for corporate innovation, Jones said he was confident the acquisition fell directly in line with the company’s developing motto: bigger, bolder, faster.
“I think one of my biggest concerns as a leader is you’re always trying to balance how much change, how fast, you know? I want people to be uncomfortable, but I also don’t want to fail on execution,” Jones explained, noting that Wave was the right opportunity at the right time.
Seated at a table in his office atop the 18th floor of H&R Block’s world headquarters in downtown Kansas City, Jones is conscious of additional opportunities for entrepreneurial growth in KC, he noted, adding that he remains passionate about engaging the legacy company with the entrepreneurial ecosystem.
“We are going to be making a commitment to participating in that landscape this year,” Jones said after quietly evaluating the space since his first day on the job in 2017. “When you put together the small business strategy, things that we’re going to announce later this year in Kansas City and the acquisition of Wave, it starts to round out a really nice picture.”
Supporting startups and small businesses — which Jones’ said could be thought of as equal, despite common misconceptions — is a step other area legacy companies and large corporations should consider exploring, if they aren’t doing so already.
“I’ve met many, many leaders — I certainly haven’t met all of them — but I’m not sure if I’m telling them something they don’t already know,” Jones said.
City of surprises
“What I have been so blown away by is the creative class in Kansas City. And that’s a broad statement, but the creative class generally is what drives communities further. It does in every city that’s ever been revitalized,” he explained, noting the importance of increased support for creative thinkers, doers, and builders.
“That’s restaurateurs, that’s tech startups, and that’s everything in between. I spend a lot of time learning about what’s happening here in that respect. A.) because I’m personally interested and B.) because we’ll figure out ways for Kansas City to participate,” Jones added.
Supporting such endeavors could help area corporations paint a picture of what’s really happening in Kansas City, increasing recruiting efforts and drawing more talent to the area, he said confidently.
“When we’re trying to recruit people, that first phone call if you live in San Francisco or New York or somewhere else, it’s a little bit of like, ‘I know the Chiefs are doing good, but you know, I’m not sure [about Kansas City],’” Jones said.
For Jones, there’s distinct satisfaction in proving such exceptions wrong, he said.
“Almost every time when they leave, the final thing they say is, ‘I had no idea.’ And that’s the ultimate to me. I mean, I don’t want Kansas City to be a secret, but I love the fact that there are so many ways they’re surprised,” Jones said.