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John Schlifske on the Legacy of Northwestern Mutual (Podcast) · Masters in Business

0:02
Speaker 1: This is Mesters in Business with very Renaults on Bluebird Radio.
0:09
Speaker 1: This week on the podcast, once again, I have an
0:12
Speaker 1: extra special guest, John Schlifsky. He is the chairman and
0:16
Speaker 1: CEO of Northwestern Mutual, the insurance giant that's in the
0:20
Speaker 1: top one hundred on the Fortune five hundred list. Uh.
0:24
Speaker 1: They have over thirty one billion dollars in annual revenues,
0:28
Speaker 1: two trillion plus in life insurance products, and about two
0:32
Speaker 1: hundred billion dollars in investable client assets. Uh. This really
0:37
Speaker 1: is a fascinating conversation, not just about the insurance industry,
0:41
Speaker 1: but about how the entire financial services industry has changed
0:46
Speaker 1: over time, how it's become more integrated, more holistic. How
0:53
Speaker 1: the concept of, you know, the insurance salesman out hawking
0:57
Speaker 1: policies is so outdated. Uh. John is really super knowledgeable
1:03
Speaker 1: about a variety of things within the industry. Northwestern has
1:08
Speaker 1: been very aggressive in not only their own internal green initiatives,
1:13
Speaker 1: but they're diversity initiatives. You tend to think of a
1:17
Speaker 1: company like them as a large, staid insurance company that
1:21
Speaker 1: might be a little behind the times. They are nothing
1:23
Speaker 1: of the sort. They seem to be fairly cutting edge
1:26
Speaker 1: relative to the typical financial services firm. I was fascinated
1:32
Speaker 1: by the conversation. I find Schlisky to be really a
1:35
Speaker 1: fascinating executive, and I think you will also, so, with
1:39
Speaker 1: no further ado, my interview with Northwestern Mutual's chairman and CEO,
1:45
Speaker 1: John Schlifsky. This is Mesters in Business with very Renaults
1:52
Speaker 1: on Bluebird Radio. My extra special guest this week is
1:58
Speaker 1: John Schlivsky. He is the chairman and CEO of insurance
2:02
Speaker 1: giant Northwestern Mutual. The firm ranks number one oh two
2:06
Speaker 1: on the Fortune five hundred. They have over thirty one
2:09
Speaker 1: billion dollars in annual revenue. Northwestern has three hundred and
2:14
Speaker 1: nine billion dollars in assets and two trillion dollars in
2:18
Speaker 1: active life insurance coverage. John Schlifsky, Welcome to Bloomberg. Well, thanks, Verry.
2:24
Speaker 1: I'm glad to be here, appreciate it. So let's start
2:28
Speaker 1: out talking about some of your beginnings. I read one
2:32
Speaker 1: of your first jobs was scraping paint off of trucks.
2:35
Speaker 1: To tell us about that, well, my, uh, yeah, My
2:39
Speaker 1: father owned a very small trucking company in Milwaukee, and
2:43
Speaker 1: so when I was thirteen I had to start working
2:45
Speaker 1: there and I basically did all the jobs none of
2:49
Speaker 1: the professional truck drivers wanted to do, including things like
2:53
Speaker 1: cleaning bathrooms and cleaning trucks and scraping paint off of
2:56
Speaker 1: things and stuff like that. So it was I think
3:00
Speaker 1: it was my dad's way of uh making me want
3:03
Speaker 1: to go to college because I was you know, it
3:05
Speaker 1: was a lot of gritty and grimy work and uh
3:10
Speaker 1: um in a family business environment. So it was a
3:13
Speaker 1: great experience. Uh And and it certainly taught me the
3:16
Speaker 1: value of an education, I'll tell you that. So, speaking
3:18
Speaker 1: of education, you go to college, you get an m
3:21
Speaker 1: b A. And it looks like pretty much right out
3:25
Speaker 1: of school, you started at Northwestern Mutual and eight seven
3:28
Speaker 1: was Was that your first job right out of school? No,
3:32
Speaker 1: my first job was with MetLife doing similar things. Uh.
3:36
Speaker 1: So I graduated from business school and went to MetLife
3:39
Speaker 1: for four years, both in Chicago and in New York
3:43
Speaker 1: and uh and then I got recruited to go to
3:46
Speaker 1: Northwestern Mutual, which is in my hometown of Milwaukee. So
3:49
Speaker 1: it seemed like a kind of a dream come true
3:52
Speaker 1: for me, and so I started. Yes. So then I
3:54
Speaker 1: did go to Northwestern much and that was thirty four
3:57
Speaker 1: years ago. I can't believe it. UM, back in seven,
4:00
Speaker 1: that's right, Did you always want a career in financial services? Was?
4:04
Speaker 1: Was that the plan? What I really wanted to do
4:06
Speaker 1: was be in the investment world. I had. I had
4:08
Speaker 1: had a couple of summer jobs in banks, and I
4:11
Speaker 1: saw their asset management uh stuff. And when I was
4:16
Speaker 1: in business school at Kellogg at Northwestern, Warren Buffett was
4:21
Speaker 1: speaking in Chicago, and you know, it was for young
4:24
Speaker 1: and investment people, and he said, if you really wanted
4:27
Speaker 1: a great investment care you should work for a life
4:29
Speaker 1: insurance company because they have great processes. They're typically buy
4:34
Speaker 1: and hold investors, very analytical in nature, uh, exposure to
4:40
Speaker 1: the the entire balance sheet, from bonds through equities, all
4:43
Speaker 1: that kind of stuff. And so I you know, I
4:46
Speaker 1: think that made a huge impact on me. And so
4:49
Speaker 1: as I was interviewing at business schools UM, I became
4:53
Speaker 1: increasingly interested in the investment side of financial services. So
4:56
Speaker 1: U looked at some investment banks, looked at money management
5:00
Speaker 1: firms on Wall Street and things like that. And I think,
5:03
Speaker 1: given my experience, and I was relatively young when I
5:06
Speaker 1: got that business school, I think the life insurance jobs
5:09
Speaker 1: were just perfect for me because it was a place
5:11
Speaker 1: where I could, uh, you know, build my skills and
5:14
Speaker 1: start out really at the bottom as a junior analyst.
5:17
Speaker 1: And uh um, and I really loved managing money. I
5:22
Speaker 1: just I love the game. I love the you know,
5:26
Speaker 1: the game in the sense of trying to figure stuff
5:28
Speaker 1: out that other people hadn't. And so I was I
5:30
Speaker 1: think I was always attracted to that sort of analytical framework,
5:35
Speaker 1: and that's why I went to MetLife and then ultimately
5:37
Speaker 1: Northwestern Mutual. So I read an interesting quote from you,
5:41
Speaker 1: and I want to get your feedback on this quote.
5:44
Speaker 1: What had the biggest impact was the recession of nineteen
5:47
Speaker 1: seventy three and seventy four. I watched my dad be
5:50
Speaker 1: worried about at that point about even meeting payroll. I
5:53
Speaker 1: saw the volatility of being a small business owner, and
5:57
Speaker 1: that drew me to want to work for a big
5:59
Speaker 1: company for security reasons. Explain the thinking that well, uh yes, So,
6:05
Speaker 1: as I mentioned, my dad had the small trucking company
6:08
Speaker 1: maybe at its peak had had thirty employees. Uh and
6:11
Speaker 1: I and I was fourteen and fifteen during the recession
6:14
Speaker 1: of seventy three and seventy four, and I didn't really
6:16
Speaker 1: understand it the way I do now. But I do
6:19
Speaker 1: remember him coming home and you know, hearing him talk
6:23
Speaker 1: to my mom about making payroll for his employees and
6:26
Speaker 1: having to draw in his own savings accounts a couple
6:29
Speaker 1: of times to feed the check account at work. And
6:32
Speaker 1: I remember one week where he said he made twenty
6:34
Speaker 1: two cents. Uh, you know, that was what's left over
6:37
Speaker 1: after he paid all the employees. And and I it
6:39
Speaker 1: just scared me, I think. And I just saw that
6:42
Speaker 1: that pressure and that volatility, and uh uh. And then I,
6:46
Speaker 1: as I mentioned, I had a summer. I worked in
6:48
Speaker 1: a mail room at a bank one summer. So imagine
6:50
Speaker 1: you go from this grimy, gritty trucking company where you
6:55
Speaker 1: never know where the next paychecks coming from, to a
6:59
Speaker 1: bank where every he's clean and showered and well dressed.
7:02
Speaker 1: And I think that had a tremendous impact on me.
7:06
Speaker 1: And then you had the security of it, which is
7:08
Speaker 1: the bank seemed to be much less impervious to the
7:12
Speaker 1: economic volatility, at least to someone working in the mail
7:15
Speaker 1: room at the time. I'm sure they had their challenges. Uh.
7:18
Speaker 1: And so I just uh, I just never wanted to
7:22
Speaker 1: work for a small company and I never wanted to
7:24
Speaker 1: to run my own business. I always wanted to work
7:28
Speaker 1: in a big company. And I think that that notion
7:30
Speaker 1: of security was a key element in it makes a
7:33
Speaker 1: lot of sense. So from MetLife you end up at
7:36
Speaker 1: Northwestern Mutual, where you start working your way up the ladder.
7:40
Speaker 1: Tell us a little bit about your career path. Well,
7:43
Speaker 1: as I said, I started out in what we call
7:45
Speaker 1: our private capital area, so that was doing private placements
7:49
Speaker 1: of so privately placed debt, privately placed equity, leveraged buyout.
7:53
Speaker 1: The eighties where the leveraged buy out you know, Glory days,
7:56
Speaker 1: and Northwestern Mutual was was a huge participant in it.
7:59
Speaker 1: So it was it was a fun experience because we
8:02
Speaker 1: were we were looking at so many different companies, so
8:04
Speaker 1: many different industries, so many different kinds of capital structures,
8:08
Speaker 1: and I was learning so much um So we had
8:11
Speaker 1: that growth in the company and then I was I
8:14
Speaker 1: was growing as a as a professional. And one of
8:16
Speaker 1: the things I've always appreciated about Northwestern Mutual, and I
8:19
Speaker 1: think it's still true to this day, it was a
8:21
Speaker 1: true meritocracy, and and by that I mean that I
8:25
Speaker 1: always thought the people who got promoted, including me obviously Uh,
8:29
Speaker 1: we're being rewarded for what we did, what we knew,
8:32
Speaker 1: how we were growing. And I never felt it was
8:34
Speaker 1: there was a club. I never thought connections were the
8:37
Speaker 1: way to the top. I always thought it was doing
8:39
Speaker 1: the right thing and being rewarded for it. So I think,
8:42
Speaker 1: you know, over my over, you know, it's your growing
8:44
Speaker 1: up in your twenties and thirties and forties. Every now
8:46
Speaker 1: and then head hunters would call. But I always wanted
8:49
Speaker 1: to stay at Northwestern Mutual really for two reasons. One,
8:52
Speaker 1: I love the culture, I love the what the company
8:54
Speaker 1: stood for. And then the second, as I mentioned, I
8:56
Speaker 1: always felt it was a true meritocracy where you were
9:00
Speaker 1: rewarded for what you did. And I think, ultimately, if
9:03
Speaker 1: you had told me I'd be still here, I don't
9:06
Speaker 1: think I would have believed you. But when you start
9:08
Speaker 1: stringing together year after year of this feeling about good
9:12
Speaker 1: about the company, it's culture and its mission, and good
9:14
Speaker 1: about your career and your bosses and the way you're treated, um,
9:18
Speaker 1: I just think that growth was amazing. And so here
9:23
Speaker 1: I am twenty at whatever it is, thirty four years later,
9:27
Speaker 1: one feeling really privileged to have been able to make
9:30
Speaker 1: most of my career at this great company. Sound sounds
9:34
Speaker 1: really interesting. And you've been CEO for is it what
9:38
Speaker 1: seven eight years already? It's even you can believe it. Yeah,
9:43
Speaker 1: that's a shocking that's a shocking number. So, speaking of
9:47
Speaker 1: how quickly time goes by, Northwestern Mutual has a hundred
9:51
Speaker 1: and fifty year old history. How does that affect how
9:55
Speaker 1: you manage the firm? What does that legacy mean to you? Well,
9:59
Speaker 1: I I would start up with the notion that it's
10:02
Speaker 1: uh both an honor and a responsibility. So it's sort
10:06
Speaker 1: of like take your favorite sports team, the Packers, the Yankees,
10:10
Speaker 1: you know, whatever team has this unbelievable legacy when when
10:14
Speaker 1: you're running the place, you can't lose sight of not
10:17
Speaker 1: just what a great job it is, but the huge
10:19
Speaker 1: responsibility that goes along with it, and this notion that
10:23
Speaker 1: we've been around for generations, we've taken care of people
10:26
Speaker 1: for generations, and that we have to do that for
10:29
Speaker 1: years and years to come. I say, I always like
10:32
Speaker 1: to tell the story. So we're a mutual company. That
10:34
Speaker 1: means we're owned by our policy owners, were not a
10:36
Speaker 1: stock company, and we don't really have an end date.
10:39
Speaker 1: There's no there's no notion that at some point this
10:41
Speaker 1: company will get sold to somebody else or that uh there,
10:44
Speaker 1: you know, we need to find a different ownership structure
10:47
Speaker 1: or anything like that. We we are in business uh
10:50
Speaker 1: for past generations, are current customers, and generations yet to come,
10:54
Speaker 1: even people who aren't even born yet. Uh. There's a
10:57
Speaker 1: sense of responsibility to take can care of that. And UM,
11:01
Speaker 1: I think that's one of the things I love about
11:03
Speaker 1: this job that as the CEO, you can think in
11:06
Speaker 1: three different time directions. We obviously have to deliver and
11:09
Speaker 1: I call them near now in far so we have
11:11
Speaker 1: to deliver near. We have to we have to do
11:14
Speaker 1: what's required today to deliver uh or excuse me, that's
11:18
Speaker 1: the now, to deliver value to our policy owners today.
11:21
Speaker 1: But we also have to be effective and relevant both
11:24
Speaker 1: in the near term, let's say two to four years
11:26
Speaker 1: out and in the far years out. We're selling products
11:31
Speaker 1: today in which people will own them for sixty, seventy
11:34
Speaker 1: eighty years, and so that that notion of working over decades,
11:38
Speaker 1: creating relevance over decades, creating economic value over decades, evolving
11:44
Speaker 1: over decades is really one of the sort of legacies
11:47
Speaker 1: that goes with running a company that's over a hundred
11:49
Speaker 1: and sixty years old. And if you look at this company,
11:52
Speaker 1: we started as a life insurance company that we're now
11:55
Speaker 1: number one in the in terms of market share in
11:58
Speaker 1: the country. And you mentioned we have over two trillion
12:01
Speaker 1: of life insurance in force. But we've evolved. We now
12:04
Speaker 1: sell a variety of risk products including disability, income, annuities,
12:08
Speaker 1: long term care. But we also are a major wealth
12:12
Speaker 1: management player. We have over two hundred close to twounter
12:16
Speaker 1: million excuse me billion dollars of assets under management for
12:20
Speaker 1: our wealth management clients. We're growing, uh swiftly in that business.
12:25
Speaker 1: We're integrating insurance and investments at our at the client
12:28
Speaker 1: level to create better outcomes. And those are all proof
12:31
Speaker 1: points I think around how this company has evolved and
12:34
Speaker 1: how is the leader. You feel this tremendous responsibility to
12:39
Speaker 1: steward the company for the next generation of employees, policy owners,
12:45
Speaker 1: and people who sell our products, which we call our field.
12:48
Speaker 1: They all have a long term stake in the in
12:50
Speaker 1: the value of this enterprise. So John, let's talk a
12:53
Speaker 1: little bit about change. You were discussing how the company
12:58
Speaker 1: has adapted over the past few decades. How have the
13:02
Speaker 1: economics of life insurance changed over time. Well, the economics
13:08
Speaker 1: have u changed in a material way, and it's it's
13:12
Speaker 1: really UH tied to what's going on in the marketplace.
13:18
Speaker 1: In the marketplace, UM, the fundamentals that create value for
13:22
Speaker 1: our policy owners haven't changed. It's how well the investment
13:25
Speaker 1: portfolio performs, It's what's your mortality experience, It's how persistent
13:30
Speaker 1: of the policies, how long do the policy owners keep
13:32
Speaker 1: their policies, and then ultimately can you manage the expenses
13:35
Speaker 1: of the business and be a low cost providers. So
13:37
Speaker 1: those things haven't changed in their the core to creating
13:41
Speaker 1: value for our policy owners who happened to be our
13:43
Speaker 1: customers at the same time. But what's really been I
13:47
Speaker 1: would say the most dramatic in the last let's say
13:49
Speaker 1: fifteen years or so is the role of interest rates UM.
13:53
Speaker 1: They obviously have a huge impact on pricing. When interest
13:57
Speaker 1: rates go down, the the cost of life insurance goes up,
14:01
Speaker 1: not necessarily the premium per se, but for permanent life insurance.
14:06
Speaker 1: A huge component of the value is the cash value
14:08
Speaker 1: that builds over time, and when UH interest rates are low,
14:12
Speaker 1: that cash value builds at a much slower rate. And
14:14
Speaker 1: so that's what I mean when I say it becomes
14:17
Speaker 1: more costly. So with rates coming down in the dramatic
14:21
Speaker 1: way they have really over the last fifteen years, that's
14:24
Speaker 1: had a very important, UH sort of headwind on the
14:29
Speaker 1: value of life insurance. And so if you think about
14:33
Speaker 1: it this way, UM, you know, policies issued in in
14:37
Speaker 1: the mid nineties had interest rates in the eight percent
14:40
Speaker 1: range UH, and now we're in a period where interest
14:44
Speaker 1: rates are down around three pc. So that that's a
14:47
Speaker 1: huge difference in terms of the value that's created in
14:50
Speaker 1: these policies over time. The good news is from Northwestern
14:54
Speaker 1: Mutual's perspective that we we really have recognized this and
14:58
Speaker 1: have stayed ahead of the curve. I remember going to
15:00
Speaker 1: Japan in the late UM two thousand's, right around two
15:04
Speaker 1: thousand and eight two thousand nine, and I visited with
15:06
Speaker 1: a number of Japanese life insurance companies at the time,
15:10
Speaker 1: and they, of course have been going through this same
15:12
Speaker 1: sort of decline in interest rates for the past couple
15:15
Speaker 1: of decades in Japan and UH. I think that the
15:20
Speaker 1: two takeaways I had there were one, it never stops,
15:23
Speaker 1: and you have to be prepared for a very long
15:26
Speaker 1: period of low interest rates and you have to get
15:28
Speaker 1: your financial house in order, which we've done. And the
15:31
Speaker 1: second is you have to continue to evolve. You have
15:33
Speaker 1: to continue to show value to your policy owners because
15:37
Speaker 1: what may have been the key value, which is higher
15:39
Speaker 1: interest rates, goes away. And so I'm really proud of
15:42
Speaker 1: the way Northwestern Mutual has navigated this period. But ultimately, uh,
15:48
Speaker 1: it's low rates that have been the biggest headwind on
15:50
Speaker 1: the company, and they've had the single biggest impact on
15:53
Speaker 1: the economics of our industry. Huh. Really interesting you mentioned
15:57
Speaker 1: mortality as another after. There are two issues I have
16:02
Speaker 1: to ask about. One is the impact of people living longer.
16:06
Speaker 1: In general, we we've tend to see lifespans extent, but
16:11
Speaker 1: at the same time, you know, we've had over half
16:14
Speaker 1: a million COVID related deaths. How do those two factors
16:18
Speaker 1: play into the economics of the insurance business? So, uh,
16:24
Speaker 1: you know, the increased longevity of Americans over the last
16:29
Speaker 1: century has been a huge positive for the life insurance industry,
16:33
Speaker 1: and mortality continues to improve, although not at the same
16:36
Speaker 1: pace it did let's say, in the twenties and thirties.
16:39
Speaker 1: But in general, Americans tend to be living longer, living
16:44
Speaker 1: healthier lives, and that has a huge benefit to the
16:48
Speaker 1: value of their policies obviously. And uh, and that's one
16:51
Speaker 1: of the and one of the reasons Northwestern Mutual stands
16:54
Speaker 1: out is that our mortality experience is actually better than
16:56
Speaker 1: the the industry average. We underwrite very well, and so
17:00
Speaker 1: all of that mortality improvement really is returned to our customers,
17:04
Speaker 1: our policy owners in the form of dividends. We paid
17:08
Speaker 1: out over six point two billion dollars in dividends in
17:11
Speaker 1: twenty and and that's a huge proofpoint on the the
17:14
Speaker 1: economic value that we create. Immortality is a huge component
17:17
Speaker 1: of it. COVID, of course, is a tragedy for this country.
17:21
Speaker 1: UM and UH, you know, it's obviously many many, many
17:25
Speaker 1: hundreds of thousands of deaths due to COVID. What we
17:28
Speaker 1: found for our our company is that the average age
17:33
Speaker 1: of our COVID claims has been around one years old,
17:39
Speaker 1: and the average duration of those policies is over forty years.
17:43
Speaker 1: So what's what that's telling us is it, by a
17:46
Speaker 1: large at least for Northwestern Mutual's policy owner base, Uh,
17:49
Speaker 1: the COVID impact has been relatively negligible. These are obviously
17:54
Speaker 1: much older people who have had these policies and forced
17:57
Speaker 1: for a long period of time. And if you look
17:59
Speaker 1: at sort of the difference, but you know, just in
18:02
Speaker 1: terms of death rates with COVID and who's dying versus
18:05
Speaker 1: let's say the Spanish flew back in the areas, it
18:10
Speaker 1: tends to negatively impact much older people rather than much
18:13
Speaker 1: younger people. And so that's that's muted the mortality cost,
18:18
Speaker 1: let's say, at the mortality expense of COVID as it
18:21
Speaker 1: relates to our policy owner base, and so as as
18:25
Speaker 1: we've told our board, uh, you know, we're in business
18:27
Speaker 1: to pay claims. We pay death claims because people need
18:31
Speaker 1: that their families needed, their loved ones needed, and we're
18:34
Speaker 1: proud to pay out our COVID claims. But at the
18:36
Speaker 1: end of the day, uh, it's been something that hasn't
18:39
Speaker 1: been nearly as bad from a financial perspective as many
18:42
Speaker 1: people thought a year ago today. So you had mentioned
18:45
Speaker 1: other forms of insurance like disability and long term care.
18:49
Speaker 1: I know a number of other carriers have run into
18:52
Speaker 1: some problems with that. What seems to be the difficulties
18:56
Speaker 1: with those products is it is it they're just harder
18:59
Speaker 1: to ice or did they simply underwrite the wrong group
19:03
Speaker 1: of people. There's no doubt that some products in the
19:08
Speaker 1: insurance world are harder than to price than others. Uh.
19:12
Speaker 1: You know, if you think about insurance in general, you've
19:15
Speaker 1: got a group of people paying premiums upfront uh and
19:18
Speaker 1: then collectively they're sharing in the risk of loss. Um.
19:22
Speaker 1: And when it comes to long term care, there's a
19:24
Speaker 1: number of assumptions that were really um I think miss price.
19:28
Speaker 1: From an industry perspective, I'm glad to say Northwestern Mutual
19:30
Speaker 1: didn't fall into that trap. Um. But without getting too esoteric,
19:34
Speaker 1: the single biggest mistake that many companies made with pricing
19:39
Speaker 1: long term care was what's called laps rate. And so
19:41
Speaker 1: this is the percent of the policies which laps in
19:44
Speaker 1: which people stopped paying premiums on. And many long term
19:48
Speaker 1: care products were basically laps supported pricing. In other words,
19:53
Speaker 1: they overestimated how many people would pay premiums for a
19:57
Speaker 1: while and then let the product laps before any benefits
20:01
Speaker 1: were ever paid on it. And what the industry found
20:03
Speaker 1: out is that long term care is in fact a
20:07
Speaker 1: product that once people have, they don't want to give
20:09
Speaker 1: up because they know how near and dear it is
20:11
Speaker 1: to their financial security. And so, yes, the industry had
20:14
Speaker 1: some rather significant UM mistakes when it comes to pricing
20:20
Speaker 1: that product. I'm proud to say that, UH Northwestern Mutual
20:25
Speaker 1: has been sort of much more UM conservative with our
20:29
Speaker 1: pricing we have. We don't do lap supported pricing in
20:31
Speaker 1: the long term care market, and as a result, we've
20:34
Speaker 1: had much better experience with our products. I do think
20:37
Speaker 1: long term care is an example of a product that
20:42
Speaker 1: is uh, what's the way to say it. It's it's
20:46
Speaker 1: people need that product. It's really really important for the uh,
20:52
Speaker 1: let's call it the average American to think about, um,
20:56
Speaker 1: how they take care of their long term expenses post retirement.
21:00
Speaker 1: And I always use the example people have no problem
21:03
Speaker 1: ensuring their home even in retirement after the mortgages paid,
21:07
Speaker 1: because they can't imagine losing a physical asset to a
21:09
Speaker 1: fire or something like that. And yet the odds of
21:12
Speaker 1: making a claim on long term care and much higher
21:14
Speaker 1: than the odds of your house burning down in retirement.
21:17
Speaker 1: And yet people don't assume that that risk is something
21:19
Speaker 1: they should insure against. And so long term care insurance
21:23
Speaker 1: is a nest. I think it's a necessary product. I'm
21:26
Speaker 1: proud to see the way the industry has been evolving
21:29
Speaker 1: to find new ways to deliver long term care protection
21:32
Speaker 1: to our policy owners, including Northwestern Mutual increasing now long
21:37
Speaker 1: term care insurance and the risks of it are being
21:39
Speaker 1: embedded in life insurance products so that you you basically
21:42
Speaker 1: have a combination of both the mortality risk insurance as
21:46
Speaker 1: well as a long term care risk insurance. And I
21:49
Speaker 1: think that's really important because at the end of the day,
21:52
Speaker 1: one of the biggest concerns people have is running out
21:54
Speaker 1: of money in retirement, and long term care is one
21:57
Speaker 1: of those events that can completely throw your financial plans
22:00
Speaker 1: for a loop and and create you know, unfore unfoecasted expenses,
22:06
Speaker 1: especially around things like Alzheimer's, memory issues and so on.
22:10
Speaker 1: And so for our industry to uh begin to come
22:14
Speaker 1: out with these hybrid products rather than just stand alone
22:18
Speaker 1: products that can create sort of these outcomes that people
22:21
Speaker 1: need is something that I think the entire industry should
22:24
Speaker 1: be be very proud of. The Other factor about these
22:26
Speaker 1: combo products that's interesting is it's they're less likely to
22:30
Speaker 1: be mispriced the way standalone products are because the combination
22:35
Speaker 1: of your premiums over long term with the accumulation of
22:39
Speaker 1: cash values and a traditional permanent policy more than offset
22:43
Speaker 1: some of the risk that goes with long term care.
22:45
Speaker 1: And so I think you're going to see long term
22:48
Speaker 1: care insurance continue to be at the forefront of what
22:51
Speaker 1: people need for financial security and uh, but just not
22:55
Speaker 1: in a standalone chassis so to speak. You mentioned where
22:58
Speaker 1: under ensured when it comes to products like long term
23:02
Speaker 1: care and what else are we as a nation under
23:07
Speaker 1: in short against what risks are out there? I would
23:11
Speaker 1: say that most Americans, and I'm generalizing, but I you know,
23:15
Speaker 1: I think this is generally true, are are underinsured when
23:19
Speaker 1: it comes to both in additional long term care. They're
23:21
Speaker 1: under insure when it comes to both life insurance and
23:24
Speaker 1: to disability insurance. UM. And we find that when our
23:29
Speaker 1: reps sit down with clients and go through a rigorous
23:32
Speaker 1: planning process, especially people who have loved ones, that they
23:35
Speaker 1: need to take care of the notion. Uh. They often
23:40
Speaker 1: have a notion that I've got a group d I
23:42
Speaker 1: policy or group life insurance policy and that takes care
23:44
Speaker 1: of me. And yet when they see what could happen
23:47
Speaker 1: if they would become disabled, especially in their twenties or
23:50
Speaker 1: thirties or forties with you know, twenty or thirty years
23:52
Speaker 1: of earnings, uh potential out the door or worse, a
23:57
Speaker 1: death um they find they're very much underinsured. You know,
24:01
Speaker 1: the problem we have as a as a industry is
24:05
Speaker 1: that everybody needs what we have, but nobody understands how
24:09
Speaker 1: much they need. And it's it's a it is typically
24:12
Speaker 1: all three of the products we're talking about, life, insurance, disability,
24:15
Speaker 1: income and long term care. Our products that are bought
24:19
Speaker 1: are not bought but sold. And by that I mean
24:21
Speaker 1: people don't wake up in the morning for the most
24:23
Speaker 1: part try to figure out how much of any of
24:26
Speaker 1: those they need and go out and buy it the
24:27
Speaker 1: way you get up and say I want to buy
24:29
Speaker 1: a car, I want to buy a refrigerator, I want
24:30
Speaker 1: to buy a vacation for my family. And so it
24:34
Speaker 1: is important that financial advisors understand these products that they
24:37
Speaker 1: can show the value of them to their clients. And
24:41
Speaker 1: typically when that's done, especially not in a product sale
24:44
Speaker 1: kind of way, but as part of a comprehensive plan,
24:46
Speaker 1: we're we're always pleased to see that people, for the
24:50
Speaker 1: most part, do want to buy more because most people
24:54
Speaker 1: do want to take care of their loved ones and
24:55
Speaker 1: plan for these unexpected events. And this is why, as
24:58
Speaker 1: I mentioned earlier, this ocean of integrating insurance and investments
25:02
Speaker 1: together is a is a we think a much better
25:04
Speaker 1: way to create outcomes for our clients that are valuable,
25:08
Speaker 1: rather than just engaging in sort of one off products sales.
25:11
Speaker 1: So let's talk a little bit about what makes life
25:15
Speaker 1: insurance somewhat unique in the world of financial services. It
25:19
Speaker 1: seems to be the only one that hasn't been disrupted
25:23
Speaker 1: by technology, as so many other industries, especially finance, has been.
25:29
Speaker 1: Why is that, Well, I think there's a short answer
25:34
Speaker 1: and a long answer. The main reason, sort of in
25:37
Speaker 1: the short run, why life insurance you haven't seen the
25:40
Speaker 1: disruption in life insurance that you've seen in other financial
25:43
Speaker 1: services companies, I think is because it's a very capital
25:46
Speaker 1: intensive business. And so for companies you know, either startup
25:51
Speaker 1: fintech startups or even established players like Amazon or whatever,
25:55
Speaker 1: to get into it, it's it's a very capital intensive business.
25:58
Speaker 1: It requires a ton of money from a capital perspective,
26:01
Speaker 1: and because rates are low right now, the return on
26:04
Speaker 1: that capital is much I think less attractive to many
26:08
Speaker 1: uh disruptors. Let's call it that then maybe other places
26:11
Speaker 1: they could go right now. So that's the short answer.
26:14
Speaker 1: I don't think that's um a reason not to be
26:17
Speaker 1: worried about disruption, and I'll talk about that in a minute.
26:20
Speaker 1: But I think there's um a lot of disruption coming
26:24
Speaker 1: our way. But I think in the long run, we
26:27
Speaker 1: really have been positively changed by technology, and I think
26:30
Speaker 1: COVID has accelerated that change in a huge way. And
26:35
Speaker 1: I'd like to say we're not in anymmore, We're in
26:40
Speaker 1: And that's sort of a glib way of talking about
26:41
Speaker 1: how the acceleration in our industry because of COVID has
26:45
Speaker 1: really taken a decade of change and compacted it into
26:48
Speaker 1: one year. Where you see the most disruption in the
26:52
Speaker 1: short run around our industry is around the client experience
26:56
Speaker 1: as it relates to purchasing our product. Companies are are
27:00
Speaker 1: simplifying the process of becoming a ensured by in terms
27:05
Speaker 1: of in the way you buy insurance. They're they're simplifying
27:10
Speaker 1: the application process, they're simplifying the underwriting process. They're doing
27:13
Speaker 1: it all sort of digitally with with no human interaction,
27:18
Speaker 1: and they're basically making it easier and easier for clients
27:21
Speaker 1: to who see the value of our product to buy
27:25
Speaker 1: the product. And so that's where you're seeing the disruption
27:28
Speaker 1: in the short run. And on the same side, on
27:30
Speaker 1: the wealth management side, you're seeing these robo advisors who
27:33
Speaker 1: are trying to sort of simplify many of the core
27:37
Speaker 1: principles of investing, diversification, dollar cost averaging, tax planning, all
27:42
Speaker 1: those kind of things. And ultimately, uh so I would
27:46
Speaker 1: argue that we are seeing disruption creep in our industry,
27:49
Speaker 1: both on the risk side, the insurance side, as well
27:51
Speaker 1: as on the wealth management side. Uh And by the way,
27:54
Speaker 1: I think that's a good thing for our industry. It's
27:57
Speaker 1: taking longer because, as I said, it's a capital intensive business.
28:00
Speaker 1: But but there's nothing about life insurance that would make
28:03
Speaker 1: me think that we're somehow, um uh immune from the
28:08
Speaker 1: kind of disruption we've seen in other parts of the
28:10
Speaker 1: financial services industry. And so the companies that are going
28:14
Speaker 1: to survive are the companies that are leaning into this disruption,
28:17
Speaker 1: that are UM experimenting around the customer experience um and
28:23
Speaker 1: so on. Ultimately, though, life insurance is a product that
28:28
Speaker 1: is really tied to two things, foregoing of money now
28:33
Speaker 1: and pooling those risks to protect everyone over time, that
28:37
Speaker 1: that that that core essence of the product is not
28:40
Speaker 1: going away, that stands the test of time. It's the
28:43
Speaker 1: only way you can really protect yourselves against yourself as
28:47
Speaker 1: an individual against catastrophic losses. And by that I mean
28:50
Speaker 1: risk pooling. And so in the long run, uh, I
28:54
Speaker 1: see the disruption in our industry more around the customer
28:57
Speaker 1: experience and the way customer way companies engage with customers,
29:02
Speaker 1: and less around sort of the basic mechanics of the product,
29:05
Speaker 1: which is as I mentioned, risk pooling, mortality, expenses, and persistency. So,
29:11
Speaker 1: so let's talk a little bit about those UM employees.
29:16
Speaker 1: Given the circumstances and how everybody has been working from
29:21
Speaker 1: home and remote, how challenging has it been to find
29:26
Speaker 1: and train new advisors? What what's it like recruiting under
29:31
Speaker 1: a lockdown? Uh, well, it's been a lot harder, I
29:36
Speaker 1: will say that. UM. At the end of the day,
29:40
Speaker 1: I think though, the fact that we were prepared for
29:43
Speaker 1: this pandemic has has helped us be successful. UM. We
29:48
Speaker 1: didn't see the pandemic coming, don't get me wrong, but
29:50
Speaker 1: we we were well on our way to creating a
29:53
Speaker 1: digital experience both for our customers and for the people
29:56
Speaker 1: who sell our product, our advisors. And so when we
29:59
Speaker 1: went to a quarantine situation and then obviously the lockdown,
30:04
Speaker 1: we were able not only to service our customers and
30:09
Speaker 1: sell our products to our customers solely through digital channels,
30:12
Speaker 1: but we're also able to recruit people. In fact, we
30:14
Speaker 1: had a record year of recruiting in people join us
30:19
Speaker 1: as advisors UM And what I think is really noticeable
30:23
Speaker 1: about those recruiting about that recruiting class, it's more diverse
30:27
Speaker 1: than ever, more women, more people of color, and it
30:30
Speaker 1: really represents, I think a continuation around this notion that
30:34
Speaker 1: this is a great, noble profession. At the end of
30:37
Speaker 1: the day, people who work for Northwestern Mutual and others
30:39
Speaker 1: in our industry are really helping people become financially secure.
30:44
Speaker 1: We know that most the average American doesn't know where
30:47
Speaker 1: they're going from a financial perspective. They don't know how
30:50
Speaker 1: to get there. They leave they have they have cluttered,
30:53
Speaker 1: sort of centered less financial lives, and they ultimately need
30:57
Speaker 1: someone to bring that all together. And so this notion
31:00
Speaker 1: of being able to attract exceptional talent to this business,
31:05
Speaker 1: uh is not as hard as I thought it was.
31:07
Speaker 1: Going to be in a virtual world because the two
31:09
Speaker 1: things this notion that we have the digital tools, and
31:12
Speaker 1: because there's demand for what we do. We are not
31:15
Speaker 1: recruiting people to a dying industry were recruiting. We're recruiting
31:19
Speaker 1: people to an industry that really has a really bright
31:22
Speaker 1: future because of this notion that most Americans have to
31:26
Speaker 1: provide their financial security to themselves. Think about my father's
31:30
Speaker 1: generation had a pension plan, the equity value in his
31:33
Speaker 1: house and so security and that's really all he needed
31:35
Speaker 1: in retirement to be financially secure. But it's much more
31:38
Speaker 1: complicated today and and people are on their own. They're
31:42
Speaker 1: not getting sort of those corporate UH defined benefit plans
31:46
Speaker 1: of you know from the days of old, and so
31:48
Speaker 1: this there is strong demand for what we do, and
31:52
Speaker 1: I think when you add all that up, UH, it
31:55
Speaker 1: creates an ability for us to recruit into it. And
31:57
Speaker 1: then you add to this notion what we called the
32:00
Speaker 1: abundance mentality, which is that people UH support each other.
32:04
Speaker 1: People in our system they help each other. Our veteran
32:09
Speaker 1: advisors work with young advisors, they mentor them, they coach them,
32:12
Speaker 1: they do joint work with them, and all of that
32:15
Speaker 1: I think has put together for us a very robust
32:17
Speaker 1: year in terms of growth, even in the midst of
32:20
Speaker 1: this notion that it's not a face to face company anymore.
32:24
Speaker 1: So we're a growing company. We grow UH in single
32:28
Speaker 1: digits every year. We're never going to be a double
32:30
Speaker 1: digit growth company given our size and our our history.
32:33
Speaker 1: But the fact that we could continue to grow in
32:37
Speaker 1: such a strong way in twenty I think it's a
32:39
Speaker 1: proofpoint on the notion that there is a demand for
32:42
Speaker 1: what we do really really interesting. You mentioned it was
32:46
Speaker 1: a record year of recruitment, and you were successful in
32:49
Speaker 1: recruiting women and people of color. Lots of firms in
32:54
Speaker 1: finance have found that to be very challenging. What is
32:58
Speaker 1: Northwestern Mutual doing make UH their recruiting drive so successful
33:03
Speaker 1: when it comes to increasing diversity? Well, I think it's Uh.
33:10
Speaker 1: We're we're on about an eight to ten year journey
33:13
Speaker 1: in this UM regard. And by that, I mean we
33:16
Speaker 1: started about eight to ten years ago, and and we
33:19
Speaker 1: really decided at the time that it wasn't just going
33:23
Speaker 1: to be a one kind of year and done program.
33:26
Speaker 1: And and so the first let's say five years or so,
33:29
Speaker 1: all we focused on was the culture in our offices.
33:32
Speaker 1: We knew that we had a male dominated, white, male
33:35
Speaker 1: dominated workplace culture, not that there's anything wrong with that,
33:39
Speaker 1: but it wasn't as inclusive as it should be, and
33:42
Speaker 1: we needed to change the culture of those offices so
33:46
Speaker 1: that women and people of color felt just as comfortable
33:49
Speaker 1: in them as as a you know, a twenty five
33:52
Speaker 1: year old white guy. And so that was the beginning
33:54
Speaker 1: of this journey, which is, let's look at those aspects
33:57
Speaker 1: of our culture that needed to change so that it
34:00
Speaker 1: became more inclusive, more welcoming. You know. My favorite example
34:04
Speaker 1: is one of the one of our network office leaders
34:07
Speaker 1: used to have a contest for for new employees and
34:10
Speaker 1: if you won the contest, you've got a tuxedo. Well,
34:13
Speaker 1: the problem is women don't want a tuxedo, right, so
34:15
Speaker 1: that was never an incentive for them. It's a little point,
34:18
Speaker 1: but it shows you all the nuances that we had
34:20
Speaker 1: to do around culture to create this welcoming environment for
34:24
Speaker 1: anybody who wants to be in it. Then we spent
34:27
Speaker 1: the next five or six years really focusing on this
34:31
Speaker 1: notion of meeting people where they are and so you
34:34
Speaker 1: don't you don't recruit the same way necessarily for a
34:37
Speaker 1: white person at a big ten university, as you might
34:41
Speaker 1: uh a person of color at a historically black college,
34:44
Speaker 1: or a woman or who might be a career changer
34:46
Speaker 1: or all those kind of things. And so we really
34:48
Speaker 1: focused on meeting people where they were recruiting people who
34:52
Speaker 1: were in environments UH that um that they didn't like
34:57
Speaker 1: that they could see we had a better one. But ultimately,
35:00
Speaker 1: I think what happens and I think this is uh,
35:02
Speaker 1: this may sound a little bit like motherhood and apple Pie,
35:04
Speaker 1: but I think it's true. At the core of what
35:07
Speaker 1: we do is we help people become more financially secured.
35:12
Speaker 1: That is our mission, and that is an attractive proposition,
35:15
Speaker 1: regardless of your race or your gender or anything like that.
35:19
Speaker 1: And so ultimately, the more we can demonstrate to people
35:23
Speaker 1: that there's a home for you and that people want
35:26
Speaker 1: what you do, I think it's really um it's been
35:29
Speaker 1: one of the hallmarks of why we've been so successful
35:32
Speaker 1: from a diversity perspective and recruiting. It's because this is
35:35
Speaker 1: not a it is not a white male only mission.
35:39
Speaker 1: It's a mission that anybody uh can can look at.
35:42
Speaker 1: And if you look at let's say Black America, that
35:44
Speaker 1: is traditionally underserved when it comes to financial security. There's
35:49
Speaker 1: a huge opportunity for other African American and Blacks to
35:53
Speaker 1: come into this career and and make inroads into that
35:56
Speaker 1: um sort of let's say, neglected part of our economy.
36:00
Speaker 1: Me and so, I think it's really it's a it
36:02
Speaker 1: is an abundance mentality, and it's one in which we've
36:05
Speaker 1: started to make some notable successes. Were far from perfect
36:08
Speaker 1: on this the journeys now we're close to being over,
36:11
Speaker 1: but I really feel like we've started down the right
36:15
Speaker 1: path and we've got some proofpoints that it's working right now.
36:18
Speaker 1: So that's really interesting. How does that apply to the
36:22
Speaker 1: c suite and senior executives? A lot of big firms
36:25
Speaker 1: have been successful in recruiting people to the upper echelons
36:31
Speaker 1: of of the organization, but they've been less successful in
36:35
Speaker 1: retaining that talent. Yeah, we're very proud of our record. Day.
36:39
Speaker 1: I always start with our board, my board. So we're
36:41
Speaker 1: a Fortune one company, and only of our board is
36:46
Speaker 1: white male. That means six of our board is diverse,
36:50
Speaker 1: either in terms of gender, ethnicity, race, or or some
36:54
Speaker 1: combination of the three. And so we we start, we
36:57
Speaker 1: walk the talk right from the beginning, right at the
37:00
Speaker 1: top of our organization. The other thing I would say
37:02
Speaker 1: is that we tend to be a company that likes
37:05
Speaker 1: to develop talent internally. UM. Now we have some senior
37:09
Speaker 1: people who were recruited from the outside world, but by
37:12
Speaker 1: and large, UH we think the way to create a
37:15
Speaker 1: more diverse and inclusive company is not just from recruiting
37:19
Speaker 1: UH people to it, but from growing homegrown talent. All
37:22
Speaker 1: of my senior team, we all have a personal goal
37:26
Speaker 1: that that we hold ourselves accountable to. It affects our
37:29
Speaker 1: annual incentive plant payouts and our long term incentive plant payouts,
37:32
Speaker 1: and it's around diversity. UH. We we have to be
37:36
Speaker 1: moving people up in this organization. We want to see
37:39
Speaker 1: more people of color at management levels and up. We
37:42
Speaker 1: hold ourselves accountable for that. Every UM open job, when
37:46
Speaker 1: we look at a slate of people, has to have
37:48
Speaker 1: at least one diverse candidate on it. When we're considering
37:51
Speaker 1: UH filling those jobs we want to promote from within.
37:54
Speaker 1: The same thing is true if we've recruit from the
37:57
Speaker 1: outside for a job, that slate has to have at
38:00
Speaker 1: least one person and hopefully more that our represent diverse candidates.
38:04
Speaker 1: So we walk the talk from the very beginning from
38:07
Speaker 1: a recruiting and promotion perspective, and then we have fairly
38:10
Speaker 1: elaborate what I would call support mechanisms. By the way,
38:13
Speaker 1: they're not perfect, that they're getting better, but so that
38:16
Speaker 1: people of color and women in our organization feel they
38:19
Speaker 1: have the same mentorship that maybe I had as a
38:21
Speaker 1: white male back in the eighties. And so I think, uh,
38:25
Speaker 1: And as as we've talked about on this podcast, I've
38:28
Speaker 1: been here for thirty four years. And when I look
38:30
Speaker 1: at our our level, our management ranks, and I look
38:33
Speaker 1: at the women and the people of color in it,
38:35
Speaker 1: you know, I'm very proud to say a disproportioned share
38:38
Speaker 1: that is homegrown talent. And uh. And I'm hoping they
38:41
Speaker 1: see the same opportunities I did, the same mission that
38:44
Speaker 1: I have, the same mission that we have going forward.
38:47
Speaker 1: Uh And and so you know, I do think we
38:50
Speaker 1: can we can hold on that talent. But I will
38:53
Speaker 1: say the other thing is that when someone recruits away
38:56
Speaker 1: one of our black employees or or let's say a
38:59
Speaker 1: woman senior woman, I take great pride in that because
39:02
Speaker 1: what it says to me is that we're developing talent
39:05
Speaker 1: that other people value and are hiring away from us.
39:08
Speaker 1: And just like we lose white males to the recruiting process,
39:11
Speaker 1: sometimes when we lose people of color and women, I
39:14
Speaker 1: do that as a proofpoint that we are growing talent
39:16
Speaker 1: that other people value. So I think that's that's just
39:19
Speaker 1: this whole ecosystem is from a diversity perspective. Is you.
39:23
Speaker 1: It's not just one thing. It has to permeate your
39:26
Speaker 1: entire culture. It has to permeate your entire way of
39:29
Speaker 1: doing things. And as that happens, the roots take place.
39:33
Speaker 1: There's roots everywhere, and you're not really dependent on one
39:36
Speaker 1: or two people staying in order to hit some sort
39:38
Speaker 1: of metric. So so let's talk a little bit about, uh,
39:42
Speaker 1: the financial services world. One of the big themes has
39:45
Speaker 1: been the move away from the traditional wirehouses and towards
39:50
Speaker 1: more independent channels. How has that impacted your investment business
39:56
Speaker 1: if at all? You know, I wouldn't. I would say
39:59
Speaker 1: we probably had a handful of our career advisors go
40:04
Speaker 1: to independent channels. And the fact the matter is is
40:08
Speaker 1: that if a career advisor leaves Northwestern Mutual, it's almost
40:11
Speaker 1: it's almost inevitable that they go the independent route. But ultimately,
40:15
Speaker 1: our retention rate right now is about I think around
40:20
Speaker 1: which means the vast majority of our veteran advisors are
40:24
Speaker 1: staying with Northwestern Mutual year after year. I think, I
40:27
Speaker 1: think there's there's two things that we're doing to create
40:31
Speaker 1: sort of that stickiness, because we never you know, you
40:33
Speaker 1: never want to compete on, uh, anything that's a commodity,
40:37
Speaker 1: and so from our perspective, uh, I think our our
40:42
Speaker 1: sort of value proposition to our our veteran advisors is
40:47
Speaker 1: what's keeping them there. And it all starts with sort
40:50
Speaker 1: of our what we call our unrivaled holistic approach to clients.
40:53
Speaker 1: So it's the it's sort of the merger of a
40:56
Speaker 1: trusted advisor, a robust lining process with proprietary planning software,
41:03
Speaker 1: the integration of insurance and investments at the client level,
41:06
Speaker 1: which is somewhat unique in our industry, all backed up
41:09
Speaker 1: by a rich digital platform and omni channel service. So
41:12
Speaker 1: those five things do set us apart from most of
41:16
Speaker 1: the independent channels. They can't bring all of that sort
41:19
Speaker 1: of skill to bear, um, you know, to to a client.
41:24
Speaker 1: The second thing we have is obviously we have arguably
41:27
Speaker 1: the best products in the industry when it comes to
41:29
Speaker 1: our insurance products, are our long term value in our
41:32
Speaker 1: permanent life insurance product the second to none. We're a
41:35
Speaker 1: low cost producer in the industry. So you you combine
41:38
Speaker 1: those two things, and we we think that there's there's
41:42
Speaker 1: a home for advisors that creates something for them that
41:45
Speaker 1: they can't get anywhere else. And that's ultimately how we
41:49
Speaker 1: compete in the marketplace. And it's just creating a proprietary system,
41:54
Speaker 1: if you will, that ultimately works with clients. And we
41:58
Speaker 1: think we can demonstrate better outcomes over the long term
42:01
Speaker 1: with our clients, better outcomes from an investment perspective, and
42:05
Speaker 1: better outcomes from a risk perspective, and certainly when you
42:07
Speaker 1: integrate them, better outcomes. And so I think at the
42:11
Speaker 1: at the end of the day, that's what's causing this
42:13
Speaker 1: strong retention in our in our career advisors, is because
42:18
Speaker 1: the independent channel can offer everything that we do. So
42:23
Speaker 1: life insurance salespeople have gotten a bad rap um in
42:27
Speaker 1: popular culture. Is that is that deserved or unfair? And
42:31
Speaker 1: and what do you do to try and reduce that?
42:33
Speaker 1: I think it's totally unfair. I think I think the
42:36
Speaker 1: bad rap is because nobody wants to buy life insurance
42:39
Speaker 1: right It's it's the ultimate self sacrifice. It's giving up
42:42
Speaker 1: money today. Uh you know as a policy owner that
42:45
Speaker 1: I'll never see it will go to my loved one
42:47
Speaker 1: someday when I die, hopefully many many, many, many many
42:51
Speaker 1: years from now. But ultimately there's life insurance is a
42:54
Speaker 1: self sacrificing instrument that nobody really wants to deal with.
42:58
Speaker 1: And and you layer on that, nobody wants to talk
43:00
Speaker 1: about their own mortality. And so I think that's why
43:04
Speaker 1: the rap is unfair. I don't think it's because of
43:06
Speaker 1: the product itself. Whether you're talking about Northwestern Mutual or
43:09
Speaker 1: almost any of our competitors, the persistency in their product
43:14
Speaker 1: lines is substantial. People keep life insurance for a very
43:18
Speaker 1: very very long time, and the reason they do it's
43:22
Speaker 1: because it has a positive impact on their lives. Whether
43:25
Speaker 1: it's at Northwestern Mutual or at any of the other
43:28
Speaker 1: major carriers, those products that we're selling ultimately have value
43:33
Speaker 1: that people see decades from now. And so I think,
43:36
Speaker 1: and by the way, I don't think you can be
43:38
Speaker 1: truly financially secure without life insurance. It has um It
43:43
Speaker 1: benefits you throughout your life cycle. As a young adult,
43:45
Speaker 1: when you're taking care of your family as your near
43:48
Speaker 1: retirement in terms of the optionality it gives you, and
43:51
Speaker 1: then ultimately at the end of your life with a
43:53
Speaker 1: legacy either for charity or for your loved ones, and
43:56
Speaker 1: so this so I think it is a bad rap,
43:59
Speaker 1: but I think it's it's one that the industry has
44:01
Speaker 1: always dealt with, and we're proud to talk about it
44:04
Speaker 1: because we know that when clients by our products, they
44:07
Speaker 1: keep them. And I think that's a much better proofpoint
44:09
Speaker 1: than sort of this rap about life insurance salesman that
44:12
Speaker 1: see that that continues to go around and around and around. Interesting. So,
44:18
Speaker 1: so you mentioned um, managing risk over the long long haul.
44:23
Speaker 1: You're in the business as CEO of managing risks for
44:26
Speaker 1: the company. What keeps you up at night? Well, um,
44:33
Speaker 1: you know, I think the biggest thing that keeps me
44:35
Speaker 1: up at night is some of the stuff from the
44:38
Speaker 1: external environment. If if you look at our business model
44:41
Speaker 1: per se. Obviously we're still in the midst of a transformation,
44:45
Speaker 1: so we've got to execute well. But the nuts and
44:48
Speaker 1: bolts of our operation do not make me nervous. In fact,
44:51
Speaker 1: you know, one of the things we like to talk
44:53
Speaker 1: about is last February, when when COVID was on the
44:56
Speaker 1: horizon and everybody was freaking out, we were very, very
45:00
Speaker 1: a calm about it because we had done all the
45:02
Speaker 1: scenario planning UH for both a pandemic and a stock
45:06
Speaker 1: market crash with low interest rates well in advance of
45:10
Speaker 1: last February in March. It's not, by the way, it's
45:12
Speaker 1: not because we knew that was coming this this past year.
45:15
Speaker 1: It's because that's what we do to make sure that
45:18
Speaker 1: we're always in operations for decades to come, and so
45:21
Speaker 1: I don't really lose sleep over the nuts and bolts
45:24
Speaker 1: of our operation. Where I get nervous is about UM
45:29
Speaker 1: A lot of the things going on. From a federal
45:31
Speaker 1: government perspective. I think we're in the midst of one
45:34
Speaker 1: of the biggest experiments we've ever seen in terms of
45:36
Speaker 1: government spending UH and modern monetary theory. I don't think
45:42
Speaker 1: we actually know how this experiment is going to end,
45:44
Speaker 1: and I think that's something that causes me to get
45:47
Speaker 1: paused and to be all, you know, another reason why
45:50
Speaker 1: UH we value financial strength so much. By the way,
45:53
Speaker 1: we're a triple A company, one of only two triple
45:56
Speaker 1: A companies in America that has a stable outlook and
45:58
Speaker 1: that financial strength is uh is what gives me comfort
46:03
Speaker 1: in in this sort of thing. The other thing I
46:05
Speaker 1: would say that causes me to lose sleep a little
46:08
Speaker 1: bit is this notion of operating in a virtual world.
46:13
Speaker 1: Northwestern mutuals culture and I hope you've heard this as
46:16
Speaker 1: I've talked, and our mission is is is steeped in
46:19
Speaker 1: all of our employees, and yet we've hired thousands of
46:22
Speaker 1: people in who have never said spend a day in
46:27
Speaker 1: the office seeing that culture firsthand. And so this virtual
46:30
Speaker 1: world that we're in I think has uh eaten away
46:34
Speaker 1: a little bit at that cultural piggy bank that we have.
46:37
Speaker 1: And I can't wait to get back everybody back on
46:40
Speaker 1: campus and back in the office is and back to
46:42
Speaker 1: work so that we can rebuild that culture over time.
46:45
Speaker 1: I'm a little bit worried about that right now, and
46:48
Speaker 1: that's one of the things that we're losing a little
46:50
Speaker 1: bit of sleep over. But fortunately, I think with the
46:53
Speaker 1: vaccinations and everything, I think we're closer and closer to
46:55
Speaker 1: the end of this. And then ultimately I think low
46:58
Speaker 1: rates are uh you know, continue to be UH problem
47:03
Speaker 1: for us. We you know, we we UH were built
47:06
Speaker 1: to last. It's not going to affect our company long term.
47:09
Speaker 1: But persistent low rates are very is a very sort
47:15
Speaker 1: of slow pressure on life insurance companies, and so we
47:19
Speaker 1: have to be uber vigilant about expenses. We have to
47:22
Speaker 1: be uber vigilant about where we place our bets. We
47:25
Speaker 1: have to be uber vigilant about execution because we don't
47:29
Speaker 1: have a margin of error when rates are so low,
47:32
Speaker 1: UH to make mistakes and waste money or or go
47:35
Speaker 1: down the wrong thing. So you know, those are the
47:38
Speaker 1: things that keep me up at night. And then of
47:39
Speaker 1: course the government. You never know where regulation is going
47:43
Speaker 1: to go, where corporate taxes are going to go. Those
47:46
Speaker 1: are wild cards that we can't control. We're lucky in
47:49
Speaker 1: that our industry is generally a bipartisan issue. We work
47:52
Speaker 1: with both sides of the aisle, and so when there's
47:54
Speaker 1: a new administration, we've got to build new relationships with
47:58
Speaker 1: the administration. But generally speaking, UH, our relationships in UH Congress,
48:03
Speaker 1: and you know, both in the House and the Senate
48:05
Speaker 1: are strong, but you never know what's going to happen there,
48:08
Speaker 1: and that's a wild card. I think that almost any
48:10
Speaker 1: business has to worry about. So generally speaking, I feel
48:15
Speaker 1: good about where we are. I'm not losing sleep at night.
48:18
Speaker 1: Being the strongest company in the industry helps. But you've
48:21
Speaker 1: you've just got to be uber vigilant about all these
48:23
Speaker 1: things that are going on, because you just can't make
48:25
Speaker 1: mistakes when rates are as low as they are. What
48:28
Speaker 1: about social unrest as a risk factor During last summer,
48:32
Speaker 1: during the Black Lives Matter protests, you were pretty vocal
48:36
Speaker 1: on social media. Tell us what motivated your voice and
48:43
Speaker 1: how it was received when within the company and within
48:46
Speaker 1: the industry. Yeah, so I was particularly moved this summer
48:51
Speaker 1: by some of that. And the reason I was moved is,
48:53
Speaker 1: as I said, we're very proud of our record around
48:56
Speaker 1: diversity inclusion. But after the George Floyd killing and some
49:00
Speaker 1: of the social unrested followed, I made a point to
49:02
Speaker 1: call about twenty or twenty five of our black and
49:06
Speaker 1: African American leaders throughout our company, both in our home
49:08
Speaker 1: office in Milwaukee, but also in many of our network offices.
49:13
Speaker 1: And I think that the biggest sort of impact I
49:17
Speaker 1: had was this notion of hope being constantly deferred. And
49:24
Speaker 1: it's it's this notion and not just at Northwestern Mutual,
49:27
Speaker 1: but from a societal perspective, and so this notion of
49:30
Speaker 1: as a black professional in this country, you hope things
49:33
Speaker 1: are better, you hope you're getting to a point of
49:36
Speaker 1: full equality and things like that, and yet those those
49:39
Speaker 1: hopes get deferred because of some of what we what
49:41
Speaker 1: we saw, and so those conversations, combined with what we
49:45
Speaker 1: saw going on around the country, really had an impact
49:47
Speaker 1: on me in a in a way that I honestly
49:50
Speaker 1: didn't think that they would, And so I knew that
49:52
Speaker 1: there was a lot of work to do. What what
49:53
Speaker 1: I'm proud of in terms of the way Northwestern Mutual
49:56
Speaker 1: Approach did is that we didn't just the issue press
49:59
Speaker 1: really says, and we didn't just donate money to this
50:02
Speaker 1: cause or that cause. Those are easy things. I'm not
50:04
Speaker 1: saying they're bad things, but they're easy. But what I'm
50:06
Speaker 1: really proud of is the hard work that we did.
50:08
Speaker 1: So we farmed, we farmed the task force. At I chair,
50:12
Speaker 1: we call it sustained action for racial equality and and
50:15
Speaker 1: the I think the two key words in that are
50:17
Speaker 1: sustained action. We decided not to just do something that
50:21
Speaker 1: sort of met the summer unrest head on, but something
50:26
Speaker 1: that we could be proud of five, ten, fifteen years
50:28
Speaker 1: from now. And we have a strategic roadmap. We're investing
50:31
Speaker 1: in our communities, were investing in our culture. We're investing
50:34
Speaker 1: in financial literacy for African Americans and blacks, and we're
50:38
Speaker 1: investing in the professional development of Blacks and African Americans
50:43
Speaker 1: not just at our company, but in our communities. And
50:45
Speaker 1: I think that kind of work is what I'm proud
50:49
Speaker 1: of because ultimately, um and I tell this story, you know,
50:54
Speaker 1: in sort of a fast way, but you can approach
50:58
Speaker 1: diversity inclusion with your left brain or your right brain
51:01
Speaker 1: if you're let's say your left brains the analytical side.
51:03
Speaker 1: America is becoming more diverse. Okay. The notion that you
51:07
Speaker 1: can be a thriving, relevant company just catering to white
51:10
Speaker 1: Americans is crazy from just a purely objective perspective. So
51:14
Speaker 1: regardless of your feelings on this, there's a strong business
51:17
Speaker 1: case to be made, uh for diversity inclusion. But from
51:21
Speaker 1: the right, the right side of your brain, the more
51:23
Speaker 1: empathetic and emotional side, as I say, it's the right
51:26
Speaker 1: thing to do. We have a mission to make people
51:29
Speaker 1: more financially secure. That mission doesn't include labels like white
51:33
Speaker 1: or black or Hispanic, or male or female. And so
51:36
Speaker 1: we we this, this notion of doing the right thing
51:41
Speaker 1: for people who feel like their hope has been deferred
51:43
Speaker 1: too long fits right into the mission of this company.
51:46
Speaker 1: And there's no way we can't be just as good
51:48
Speaker 1: as that at that as we are as it comes
51:51
Speaker 1: to wealth management or risk products. And so, uh, this
51:55
Speaker 1: is a skill that we're gonna build. It's a skill
51:56
Speaker 1: that Northwestern Mutual is going to be world class at
51:59
Speaker 1: and something that I'm proud that started. It's too bad
52:01
Speaker 1: it had to start because of a killing and social unrest,
52:05
Speaker 1: but maybe that's one of the bright spots in this
52:08
Speaker 1: that ultimately it's going to lead to something that's much
52:10
Speaker 1: bigger and better than anything that was going on before
52:13
Speaker 1: or really really interesting. Um. A couple of years ago,
52:17
Speaker 1: you guys built a brand new headquarters. G it's about
52:21
Speaker 1: five years ago. UM, I know there was an element
52:25
Speaker 1: of sustainability in that new um h Q tell us
52:30
Speaker 1: about Northwestern Mutuals sustainability efforts. Well, uh, look at me.
52:38
Speaker 1: You can't be a hundred and sixty plus years old
52:41
Speaker 1: and not care about the environment. Okay, I mean it's
52:44
Speaker 1: it's this we want to be around for another hundred
52:46
Speaker 1: and sixty years, and our sort of ecological sensitivities predate
52:54
Speaker 1: climate change and predate all the current things that are
52:58
Speaker 1: going on, because we all utimately want to conserve things,
53:01
Speaker 1: and we want to conserve things because that's what great
53:05
Speaker 1: companies do, and we don't want to be seen as
53:07
Speaker 1: wasting any resource, especially natural resources. So the building is
53:11
Speaker 1: a proof point around I think two things. One is
53:14
Speaker 1: the ability to create a building that can be green,
53:17
Speaker 1: that can that can create a wonderful work environment, but
53:21
Speaker 1: at the same time be at the forefront of all
53:23
Speaker 1: the efforts around energy conservation, UM and so on and that.
53:28
Speaker 1: And this building is and I can get into details
53:30
Speaker 1: around the windows and the cooling and all that stuff,
53:32
Speaker 1: but ultimately it is a very beautiful sustainable structure that
53:39
Speaker 1: has a great work environment as as part of it.
53:41
Speaker 1: But the other thing that's interesting, and this isn't right
53:43
Speaker 1: to your question, but it ties into your previous question,
53:45
Speaker 1: is when we built that building, we committed to the
53:48
Speaker 1: city that we would have a large portion of the
53:53
Speaker 1: work done by minority contractors. And that's another form of
53:56
Speaker 1: sustainability that doesn't necessarily tie right to the um, to
54:01
Speaker 1: our climate or our ecological resources. But by using minority
54:06
Speaker 1: contractors on a you know, a half billion dollar building,
54:10
Speaker 1: we were able to create sustainability for them. They were
54:13
Speaker 1: they were building skills, they were building financial resources, they
54:15
Speaker 1: were building a resume of pedigree around this kind of
54:18
Speaker 1: really important work. And so I think the sustainability of
54:21
Speaker 1: that building isn't just from a from an ecological perspective,
54:25
Speaker 1: but also from what we did as it relates to
54:28
Speaker 1: minority contractors and their ability now to go forward. And
54:31
Speaker 1: as you've seen other construction in Milwaukee develop our new
54:34
Speaker 1: fights or form where the Bucks play, other major office buildings,
54:38
Speaker 1: those UH construction projects are now learning from what we
54:42
Speaker 1: did and employing the same both sustainability issues and the
54:46
Speaker 1: same minority contractor issues, and it's just you can see
54:49
Speaker 1: the ripple effects of that, and it's it's why I'm very,
54:52
Speaker 1: very proud of that building. Now. Our employees will tell
54:54
Speaker 1: you they love it because it's great work environment, but
54:56
Speaker 1: I'm proud of it not just because of that, but
54:58
Speaker 1: because it's sort of the um the catalyst it became
55:02
Speaker 1: for all the things that we're talking about today. So
55:05
Speaker 1: the last big question I have is what are the
55:09
Speaker 1: looming large opportunities that you see when you look out
55:14
Speaker 1: ten or twenty years for both Northwestern Mutual and the
55:18
Speaker 1: financial services industry. Well, I think the I think this
55:23
Speaker 1: is a growth industry. It's just it's just amazing, you know.
55:27
Speaker 1: To repeat what I said, most people have fractured centator
55:30
Speaker 1: list lives from a financial perspective. They have too many things.
55:33
Speaker 1: They don't know how to pull it together. They're on
55:35
Speaker 1: their own. They're pioneers in the sense that there's no
55:38
Speaker 1: uh way, you know, agreed upon way to do it.
55:41
Speaker 1: They don't know where they're going financially, they don't know
55:43
Speaker 1: how to get there. They need someone to help them. Uh.
55:46
Speaker 1: And and it's it's unbelievable the demand that's out there now.
55:49
Speaker 1: It's latent demand. And by that I mean people don't
55:53
Speaker 1: necessarily know exactly how to get what they want. You know.
55:56
Speaker 1: Henry Ford had that famous uh saying, if I have
56:00
Speaker 1: people what they wanted, they would have said faster horses
56:03
Speaker 1: because they didn't see the view of the value of
56:05
Speaker 1: a car. And I think our industry faces that a
56:07
Speaker 1: little bit. People want financial security, they want to make
56:10
Speaker 1: sense of their financial lives. They want someone to pull
56:13
Speaker 1: it all together for them and make sense of it,
56:15
Speaker 1: but they don't necessarily see the way to do that
56:18
Speaker 1: is through a trusted advisor, planning and the integration of
56:22
Speaker 1: risk and investment. So that's our job. Our job is
56:25
Speaker 1: to show people the way to get the financial security.
56:28
Speaker 1: But but people are underinsured, people don't know how to
56:32
Speaker 1: say for retirement, people don't know how to take care
56:35
Speaker 1: of themselves financially, and uh it that that is the
56:39
Speaker 1: financial literacy in this country is I would say below
56:42
Speaker 1: average for where it should and could be. And so
56:44
Speaker 1: I think the opportunity for our company and for others
56:49
Speaker 1: like us is absolutely um unbounded. I mean, I really
56:54
Speaker 1: believe we're a growth industry. Now, We're gonna grow at
56:57
Speaker 1: single digits. As I said, we're not going to be
56:59
Speaker 1: the year over year thing. Because this is hard work.
57:02
Speaker 1: You've got to engage clients one at a time. You've
57:04
Speaker 1: got to meet with them and do the planning, the
57:07
Speaker 1: rigorous planning that they need and show them the way forward.
57:10
Speaker 1: But I as I see more and more companies shift
57:12
Speaker 1: away from sort of this product oriented cell where I
57:15
Speaker 1: just want to sell a product to move on to
57:17
Speaker 1: forming these lifetime relationships with clients and get them to
57:20
Speaker 1: have the outcomes they want, not the products they want,
57:23
Speaker 1: but the outcomes they want. I think our industry is
57:25
Speaker 1: going to continue to shine and uh so, I I
57:28
Speaker 1: am actually quite optimistic about our future. I'm sixty two
57:33
Speaker 1: years old. We have a mandatory retirement policy here at
57:36
Speaker 1: sixty five, so I've got three years left with this company,
57:39
Speaker 1: and I feel melancholy about that because I think our
57:42
Speaker 1: brightest days are ahead of us. I just think there's
57:44
Speaker 1: so much opportunity in this country to help people become
57:48
Speaker 1: more financially secure, and it's it's very exciting. And then
57:51
Speaker 1: when you overlay how we're using technology to improve the
57:54
Speaker 1: customer experience, to make it more, to make it frictionless,
57:58
Speaker 1: more seamless, better for our lillions um, I think I
58:03
Speaker 1: think that this is is a is a bright future
58:06
Speaker 1: and so as this company does both perform and transform
58:10
Speaker 1: at the same time, I think we are just having
58:14
Speaker 1: that one of the brightest futures that we've ever had
58:16
Speaker 1: as a company. And I'm really proud that we can
58:18
Speaker 1: deliver performance in the here and now, but at the
58:21
Speaker 1: same time build out this customer experience platform that's going
58:25
Speaker 1: to ensure relevance for years and years and years to come.
58:29
Speaker 1: So so here's an unanticipated question and a little bit
58:32
Speaker 1: of a curveball. I didn't realize Northwestern Mutual had a
58:37
Speaker 1: mandatory your retirement age. Have you even begun thinking about
58:43
Speaker 1: what you're gonna do in retirement or maybe that's the
58:47
Speaker 1: wrong word post Northwestern Mutual. Well, I haven't really started
58:54
Speaker 1: thinking about it, to be honest with you. I've still
58:57
Speaker 1: got a lot to do here and I'm really excited
59:01
Speaker 1: about what i want to do, and it's a full
59:03
Speaker 1: time job. Um. You know, in my heart, I think
59:08
Speaker 1: i'd like to teach after Northwestern Mutual. Um, but I
59:12
Speaker 1: haven't put much thought into it beyond that. But some
59:14
Speaker 1: sort of graduate business school environment where I could talk
59:18
Speaker 1: about all that I've learned and share it with people
59:20
Speaker 1: would be really fulfilling. And I think I get much
59:23
Speaker 1: more sort of joy out of that than a than
59:25
Speaker 1: a second gig somewhere in corporate America anything like that.
59:28
Speaker 1: So uh, But I, as I said, I've got plenty
59:32
Speaker 1: of time. I mean, Joe Biden and I are going
59:34
Speaker 1: to end our terms at about the same time. I'm
59:37
Speaker 1: sure he's not thinking about retirement, and neither of my
59:39
Speaker 1: I I've got a lot to do here. We've got
59:41
Speaker 1: a great team, and I really want to focus on
59:43
Speaker 1: delivering in the here and now. Great answer, Let's jump
59:46
Speaker 1: to our favorite questions that we ask all of our guests,
59:50
Speaker 1: starting with what are you streaming these days? Tell us
59:53
Speaker 1: what's keeping you entertained during this work from home era
59:58
Speaker 1: either Netflix or Amazon Time or whatever podcast or audio
1:00:02
Speaker 1: you might be listening to. What's keeping you busy these days? Well,
1:00:06
Speaker 1: I would say that from a streaming perspective, except for
1:00:10
Speaker 1: The Crown, my wife and I don't do much of
1:00:14
Speaker 1: that stuff. I when I am winding down, I'm much
1:00:19
Speaker 1: more about reading books than I am about streaming. But
1:00:21
Speaker 1: I will say we got sort of addicted to the
1:00:24
Speaker 1: series The Crown and love it. My mother's English. I
1:00:27
Speaker 1: went to English. I went to England every summer to
1:00:30
Speaker 1: visit my grandmother. So I'm a little bit of an anglophile,
1:00:33
Speaker 1: and that's that series really resonated with me. But to
1:00:36
Speaker 1: be honest with you, I'm much more interested in reading
1:00:41
Speaker 1: books when I have some free time. I think that
1:00:43
Speaker 1: quiet really appeals to me. And so uh um, that's about.
1:00:47
Speaker 1: That's about it. From a streaming perspective. Well, we'll get
1:00:50
Speaker 1: to books in a moment. Let's talk about your mentors
1:00:54
Speaker 1: who helped to shape your career. UM, I've been UH,
1:01:03
Speaker 1: I've been blessed with UM a lot of mentors. You know.
1:01:08
Speaker 1: I think that probably, UM, there's two Rather than name names,
1:01:14
Speaker 1: I would say two things really, UH I value in
1:01:18
Speaker 1: terms of the mentorship that I got UH as a
1:01:22
Speaker 1: as my career was developed. The first thing is I
1:01:24
Speaker 1: mentioned early on that Northwestern Mutual does a lot of
1:01:28
Speaker 1: leverage buyouts and UM and we continue to be very
1:01:32
Speaker 1: active in that part of the capital markets as a company.
1:01:35
Speaker 1: But back when I was making those investments, the opportunity
1:01:38
Speaker 1: to either sit on a board that we of a
1:01:41
Speaker 1: company that we were an owner of, or at least
1:01:43
Speaker 1: be part of a board meeting when I was in
1:01:46
Speaker 1: a more junior role and see all those CEOs in
1:01:50
Speaker 1: action and how they ran companies. And it wasn't just
1:01:52
Speaker 1: financial services, it was aluminum die casting and retail products
1:01:57
Speaker 1: and consumer products and things like that. That ability to
1:02:00
Speaker 1: see UH, different industries confront similar problems, I think was
1:02:05
Speaker 1: was really helpful. UM. And then UM, you know my board,
1:02:10
Speaker 1: I've I've been you know a CEO for now going
1:02:13
Speaker 1: on eleven years. Before that, I was very involved with
1:02:16
Speaker 1: our board, and what I would say is that um
1:02:20
Speaker 1: our board, my board has been unbelievable in mentoring me.
1:02:23
Speaker 1: I can't tell you how many times when I was
1:02:25
Speaker 1: a junior executive making presentations to our board where a
1:02:30
Speaker 1: board member would take me aside after a board dinner
1:02:32
Speaker 1: and sit down with me for fifteen or twenty or
1:02:34
Speaker 1: thirty minutes and tell me what I did right, and
1:02:36
Speaker 1: tell me what I did wrong, and tell me where
1:02:38
Speaker 1: my style got of out of hand and things like that.
1:02:41
Speaker 1: And I think a lot of times people sort of
1:02:45
Speaker 1: say their board has been valuable, but I really need it.
1:02:49
Speaker 1: The mentorship that I've gotten and sort of the the
1:02:52
Speaker 1: advice that I've gotten, not necessarily about strategic goals, but
1:02:56
Speaker 1: more around style and relating to people and engaging with people.
1:03:01
Speaker 1: I think those those two things have really had the
1:03:04
Speaker 1: biggest impact on my sort of development as an executive,
1:03:08
Speaker 1: and it's stuff that I'm very appreciative of. Really really interesting.
1:03:12
Speaker 1: You mentioned books. Let's talk about some of your favorites.
1:03:16
Speaker 1: What what are you reading right now and what are
1:03:19
Speaker 1: some of your all time uh mostly loved books. Uh. Well,
1:03:24
Speaker 1: I am a big fan of history books. So you know,
1:03:29
Speaker 1: early in my career, you know, people would give me
1:03:31
Speaker 1: books like Good Degrade and stuff like that, and I've
1:03:34
Speaker 1: read them and I think they're good. Uh And I'm
1:03:36
Speaker 1: not complaining about it, but I found that I learned
1:03:38
Speaker 1: much more from reading about actual history and how people
1:03:42
Speaker 1: dealt with it. And I and I tend to, uh
1:03:46
Speaker 1: you know, move from American history to European history. Uh
1:03:52
Speaker 1: and and I you know, I just have a huge
1:03:53
Speaker 1: interest in both of those. Right now, I'm reading this really,
1:03:56
Speaker 1: someone recommended this book. It's called Oliver wis Well and
1:04:00
Speaker 1: it's I can't I think it was published in It's
1:04:04
Speaker 1: it's it's the one exception to my rule because it's
1:04:06
Speaker 1: a fiction book. But it's historical fiction about the Revolutionary
1:04:10
Speaker 1: War told from the perspective of loyalists, so people fighting
1:04:14
Speaker 1: against the colonists and the militia and George Washington and
1:04:17
Speaker 1: it's and it's really interesting, um to see it from
1:04:20
Speaker 1: that point of view. But I just finished that book.
1:04:23
Speaker 1: And I'm my wife and I just celebrated our wedding
1:04:27
Speaker 1: anniversary today as a matter of fact, and she gave
1:04:29
Speaker 1: me this book on Sunday, she jumped the gun a
1:04:31
Speaker 1: little bit. And it's called Lincoln's Mentors. That's by a
1:04:34
Speaker 1: guy named Michael Gerhard, and it's it's really about all
1:04:37
Speaker 1: the people in Lincoln's life that influenced his policy. And
1:04:42
Speaker 1: I'm not about it on page a hundred. I just
1:04:44
Speaker 1: started it, but it's it's really fascinating to see how um,
1:04:49
Speaker 1: the early people in his career Henry clay Is is
1:04:52
Speaker 1: the one I'm reading about now, and how influential they
1:04:55
Speaker 1: were in his sort of development as a leader. Um
1:04:59
Speaker 1: and so UM. I'd recommend both those books, the ones
1:05:02
Speaker 1: out of print. But this, this book by Michael Gerhard
1:05:06
Speaker 1: is I think it's relatively new and it's it's so far,
1:05:09
Speaker 1: so good. So that's what I'm reading right now. Very interesting.
1:05:13
Speaker 1: What sort of advice would you give a recent college
1:05:16
Speaker 1: grad who was interested in a career in either insurance
1:05:20
Speaker 1: or finance or both. Um. The the advice I got
1:05:26
Speaker 1: when I was twenty two is advice I followed at
1:05:28
Speaker 1: work for me, and so I always like to share
1:05:30
Speaker 1: it with other people. And one of my neighbors when
1:05:32
Speaker 1: I was just getting out of college, said the secret
1:05:35
Speaker 1: and he worked at a bank of fairly senior guy
1:05:38
Speaker 1: a local bank in Malwauke, and he said, if you
1:05:40
Speaker 1: work harder than anyone else between the ages of twenty
1:05:43
Speaker 1: five and thirty five and never stopped developing additional skills,
1:05:48
Speaker 1: so you're always learning, you'll set yourself up for a
1:05:51
Speaker 1: great career. And I've tried to follow that. Obviously, I'm
1:05:54
Speaker 1: well beyond thirty five now, but in my twenties and thirties,
1:05:57
Speaker 1: when you're young and you have bondless energy, there's no
1:06:00
Speaker 1: reason not to work harder than everybody else. And and
1:06:02
Speaker 1: I did that, and I think that was the foundation
1:06:06
Speaker 1: for the career. And then as as we talked about
1:06:08
Speaker 1: just reading books or finding other ways to constantly be learning,
1:06:11
Speaker 1: think about how Northwestern Mutual in thirty four years my
1:06:15
Speaker 1: career there has changed. It's dramatic how we've evolved and
1:06:19
Speaker 1: changed and transformed ourselves. And you couldn't do that if
1:06:23
Speaker 1: you weren't reading and learning and observing and being curious.
1:06:27
Speaker 1: And so I think I think those two things, working
1:06:31
Speaker 1: hard and never stopped being curious, never stopped looking at
1:06:34
Speaker 1: other industries or people for for skill sets or ideas.
1:06:38
Speaker 1: I think it's really ultimately a great way to build
1:06:43
Speaker 1: a career, regardless of whether it's an insurance and finance
1:06:45
Speaker 1: or probably anywhere else. Quite interesting. And our final question,
1:06:51
Speaker 1: what do you know about the world of insurance and
1:06:54
Speaker 1: corporate leadership that you wish you knew when you began
1:06:57
Speaker 1: your career thirty four US years ago? When I started
1:07:03
Speaker 1: at Northwestern Mutual, as I mentioned, I worked in the
1:07:05
Speaker 1: investment side. I could have cared less about life insurance.
1:07:08
Speaker 1: I just loved being a portfolio manager, investing in companies,
1:07:12
Speaker 1: watching them grow, etcetera, etcetera. If I wish I had
1:07:15
Speaker 1: known what a great industry this is back then, and
1:07:17
Speaker 1: maybe this sounds a little self serving, but our industry
1:07:21
Speaker 1: is vibrant, it's growing, it's full of innovation, and I
1:07:25
Speaker 1: think sometimes people aren't attracted to it because they think
1:07:28
Speaker 1: it's kind of boring and old and stagy, and it's
1:07:31
Speaker 1: really not that. And I wish I had known more
1:07:34
Speaker 1: about that. I probably would have paid more attention to
1:07:37
Speaker 1: things going on around me rather than just honkering down
1:07:39
Speaker 1: and doing the investment stuff. And uh um. From a
1:07:43
Speaker 1: leadership perspective, Um, you know, I'm still evolving there. But ultimately,
1:07:51
Speaker 1: what I've really learned about leadership that I didn't know
1:07:54
Speaker 1: back then is that you have to have both a
1:08:00
Speaker 1: keen um intellect and strategic mind, but you also have
1:08:06
Speaker 1: to have high emotional i Q emotional quotation and I
1:08:10
Speaker 1: and I really when I was younger, I thought, Wow,
1:08:13
Speaker 1: if I have a good idea to explain it, everyone
1:08:16
Speaker 1: will just buy into it and start working there. And
1:08:18
Speaker 1: I totally under appreciated how much how important it is
1:08:23
Speaker 1: to engage with people not just on an intellectual level,
1:08:26
Speaker 1: but on an emotional level, so that there's so that
1:08:29
Speaker 1: they know that you care about them. They know that
1:08:31
Speaker 1: the reason you have this idea is not for selfish reasons,
1:08:34
Speaker 1: but it's for the good of the organization. They believe
1:08:37
Speaker 1: that what you're doing isn't just for personal aggrandizement for
1:08:40
Speaker 1: the but for the for the good of the organization.
1:08:43
Speaker 1: I don't think I really appreciated that fifteen or twenty
1:08:46
Speaker 1: years ago. Maybe even ten years ago, I didn't appreciate it.
1:08:48
Speaker 1: But as I you know, as I as I've been
1:08:50
Speaker 1: in this job longer, you just can't underestimate the value
1:08:55
Speaker 1: of both of those things being integral to actually moving
1:08:59
Speaker 1: some things forward. Thanks John for being so generous with
1:09:03
Speaker 1: your time we have been speaking with John Schlifsky. He
1:09:06
Speaker 1: is the chairman and chief executive officer of Fortune one
1:09:10
Speaker 1: hundred company Northwestern Mutual. If you enjoy this conversation, well
1:09:15
Speaker 1: check out any of our previous four hundred interviews. You
1:09:19
Speaker 1: can find those at iTunes, Spotify, or wherever you get
1:09:22
Speaker 1: your podcast fix. We love your comments, feedback and suggestions
1:09:27
Speaker 1: right to us at m IB podcast at Bloomberg dot net.
1:09:32
Speaker 1: You can sign up for my daily reads at Rid
1:09:35
Speaker 1: Halts dot com. Check out my weekly column on Bloomberg
1:09:38
Speaker 1: dot com slash Opinion. Follow me on Twitter at Rid Halts.
1:09:43
Speaker 1: I would be remiss if I did not thank the
1:09:45
Speaker 1: crack staff that helps put these conversations together each week.
1:09:49
Speaker 1: Maroufal is my audio engineer atko. Val Bron is our
1:09:53
Speaker 1: project manager. Michael Boyle is my producer. Michael bat Nick
1:09:58
Speaker 1: is my head of research. I'm Barry Ritults. You've been
1:10:01
Speaker 1: listening to Master's in Business on Bloomberg Radio.