Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad streets in New York City, you're Inside the ICE House. Our podcast from Intercontinental Exchange, on markets, leadership and vision in global business. The dream drivers, that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism. Right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
We are recording this podcast on the same day that later tonight, the four and one Tampa Bay Buccaneers are traveling to Lincoln Financial Field to take on the two and three Philadelphia Eagles. And by the time you listen to this episode, the outcome of game is already going to be known. But what won't be clear, is how the team's respective quarterbacks are going to impact their team's long term success. Tom Brady, who brought his hall of fame stats to the Bucs two seasons ago, after leading my hometown Patriots to six Lombardi trophies, leads the Tampa bay squad. His resume gave him instant cred in the locker room, and his veteran talent on the field raised the Bucs' level of play. The results speak for themselves, as he led the Bucs to one Super Bowl and has them poised already for another.
Josh King:
And on the other sideline, the Eagles drafted their quarterback of the future. And he had a direct role, the team did, in preparing Jalen Hurts to lead the team on the field. And so, far the win loss record has been off to a slow start, but his play is improving and the future looks bright in the city of brotherly love as Jalen steps into the storied shoes of Ron Joworsky, Randall Cunningham, Donovan McNabb and Carson Wentz. Now, whether you use a veteran or a new recruit, a strong team requires this balance of homegrown talent and veteran signings. But what about the top position? Is it better to bring in an outsider with experience, or promote from within? It's a harder question to judge in corporate America, but on the football field it seems clear that promoting from within has been far more successful. In fact, 16 of the last 20 Super Bowl champions have been led by a quarterback that they drafted.
Josh King:
The exceptions were the New Orleans Saints with Drew Brees, the Denver Broncos with Peyton Manning and interestingly, the Buccaneers twice with Brad Johnson in 2002, and the aforementioned Mr. Brady last year. Now, our guest today may never have had the challenge of putting together a professional football team, but his career has been marked by decades of success, putting together teams that build trophy balance sheets. 26 miles away from Lincoln Financial Field sits the headquarters in Radner, Pennsylvania, of Lincoln National Group, where we'll be talking today with Dennis Glass, the company's chief executive officer. Our conversation with Dennis on leading successful management teams, building a winning culture, and preparing a company for a major change, is coming up right after this.
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Josh King:
Our guest today, Dennis Glass, became the CEO of Lincoln Financial Group, that's NYSE ticker symbol LNC, in 2007. After serving as the firm's COO and president previously, Dennis was the president and CEO of Jefferson Pilot Corporation, which merged with Lincoln Financial in 2006. He joined Jefferson Pilot in 1993 after holding several executive level finance and investment positions in the insurance and investment industries. Welcome Dennis, to Inside the ICE House.
Dennis Glass:
Josh, thank you very much. I'm happy to be here.
Josh King:
We're so glad to have you. Look, when I attended Swarthmore College now quite a number years ago, the Eagles played in the late 1960s concrete artifact in South Philly, near the airport called Veterans Stadium. Next year is going to mark the 20th anniversary of Lincoln Financial's relationship with the birds, which began before you joined the company. But a couple of years ago, you extended those naming rights through 2032. How has that relationship helped Lincoln Financial connect with both the local community, as well as build brand awareness?
Dennis Glass:
Yeah. We're very, very proud, Josh, of our association with the Eagles. And as you point out, there's a couple of dimensions to it that makes it important for us. The first one is we're a national company, and we therefore get national name recognition in the context of the relationship and the support. We also get some local benefit from the naming rights. But one thing that I really put a lot of importance on is our employees really appreciate the fact that they have name recognition. If you're sitting around with your family on Thanksgiving, and your an employee at Lincoln, your friends and family don't know that much about Lincoln. But if you can say, when the Eagles came on the screen and Lincoln Financial Field gets on the screen, "Hey, that's where I work." And so, a lot of pride and opportunity to use the Eagles association.
Josh King:
And also home on so many occasions for one of the greatest football games every year, the Army Navy game, have you been to any of those contests?
Dennis Glass:
Yes. We've been very proud to participate in the Army Navy games. And what we typically do is bring wounded warriors to our suite, as a thank you to them for the contributions that they've made to America. And it's a very compelling and emotional day when you see these great Americans and what they've suffered. So yes, we're very proud and we take advantage of that opportunity.
Josh King:
So Dennis, Lincoln Financial now is synonymous with Philadelphia for all the reasons you just pointed out at the Linc. But the company's actual roots are in the Midwest, as are yours. What brought the Glass family originally to Milwaukee?
Dennis Glass:
I went to the University of Wisconsin Milwaukee. My first career job was at Northwestern Mutual Life, a very well recognized insurance company in America. And I started out in the bond department, actually met my wife, who was a lawyer at Northwestern Mutual, at the office. So, that's the background.
Josh King:
You say you grew up there, your parents, I think Robert and Carmella, did they breed someone headed eventually for the bond department at Northwestern Mutual?
Dennis Glass:
Well, as is the case with so many families in the Midwest, my dad was a tool and die maker, my mother was a homemaker. I think I was one of the first cousins in a very large group of cousins to go to college. So, a typical Midwestern background, and learned a lot of values in the Midwest of doing the right thing, working hard, and trying to move forward.
Josh King:
A tool and die maker and a homemaker, brings you ultimately to University of Wisconsin Milwaukee. What spurred the interest particularly in finance and investing, when it could have been medicine or engineering?
Dennis Glass:
I just seemed to lean in that direction when I got to the university. And you know, the first couple of years that any college is more open in terms of your curriculum. I enjoyed accounting and finance and those classes, and that gave me the background to get my first job at Northwestern.
Josh King:
Northwestern, obviously the quiet company, one of the cornerstone companies of your hometown. And I might add, issuer of my whole life policies. How did that experience introduce you to the insurance side of this business?
Dennis Glass:
I was in the bond department, which was really a good job for a young person, because you made investments in companies and industries across the United States, and really worldwide. And so as a young person, getting into and analyzing businesses and companies, understanding how they create strategy, understanding how they create competitive advantage, that was a particularly powerful place to start a career for a young person.
Josh King:
I listened to an interview where you said that the decision that you made to leave home and head to Atlanta to join this small REIT was actually a major upward turning point in your career. What was the opportunity?
Dennis Glass:
Actually, what happened was Northwestern Mutual had sponsored a REIT on the New York Stock Exchange. And although I was in the bond department, at one point in time they needed a person to become the CFO of the New York Stock Exchange company that they had launched. And so I moved out of the bond department while at Northwestern Mutual, and I became the CFO and essentially ran that business for Northwestern Mutual. So, it was a very unique opportunity because I was still working at Northwestern Mutual, but became the CFO of a publicly listed New York Stock Exchange company.
Dennis Glass:
And so, my whole vision of opportunity was greatly increased because I was at a private company, and went to a public company. And that just was a tremendous experience and opportunity. I will say, sometimes things turn out well and you take a risk. The job was actually offered to somebody else at Northwestern Mutual who turned it down. I decided that it was a great opportunity to expand my horizons, and was really excited about it. So when you think about career development, taking risks and doing something different might be the vertical that others want to pursue. It gives you the background and breadth of experience to continue to progress.
Dennis Glass:
I then, with that experience and having that CFO position on my resume, made me available not just on the investment side for my career, but also from the CFO side. And it was my CFO experience that led to the job in Atlanta with a big national, international real estate development company.
Josh King:
Dennis, the 1990s were an exciting time in insurance, as the industry went through this period of consolidation, innovation. And in your time at Jefferson Pilot, as CFO and later CEO, you helped the company grow into one of the 15 largest in the space, which led to the merger ultimately with Lincoln Financial. Now, M and A requires lining up the financial side. You certainly had that ability with your CFO experience, and actually getting the deal done. But also in front of all these troops, successfully integrating different companies and different cultures into one. How did that experience shape your leadership style and help you grow as an executive?
Dennis Glass:
M and A is merely an opportunity to accelerate a strategy that I and the management team had put together in the first place, it's not doing M and A for the sake of M and A. So as an example, the latest large deal that we did was buying Liberty's group business. And that was an acceleration of our desire to get more earnings, source of earnings for mortality and morbidity than from interest rates or assets under management. So, it was a terrific opportunity.
Dennis Glass:
But to the point of integration, our best executed, if you were very clear about why you were buying the company and what you expected to do with it after you bought it, you had to do a very good job of creating those plans, in the process of doing the analysis about the purchase itself. So if you've done a great job during the purchase analysis, the path forward on the integration is quite clear.
Dennis Glass:
Now having said that, that's the numbers and the math and the strategy. But the most important piece, not just in an acquisition and integration, but in all dimensions of running a company, is making sure that you have the right people in the right place. So if you have a clear path on the integration that was developed during the analytical period, and then you sit back and say, "Who are the best people, what are the best processes, what are the best characteristics of each company?" And you put those side by side, and you don't pick one because you're the choir, but you pick the one that makes the most sense looking forward for the company. So whenever you do integrations, it's a great opportunity to get new talent, new ideas, create a bigger and better company.
Josh King:
You said, Dennis, you needed to be very clear about why you're buying the company. Take us back to the early 2000s, and those discussions leading up to Lincoln Financial. Why was that the company that you were actually going after? You could have looked at other companies in your due diligence process, what was your vision for what a combined company actually could be?
Dennis Glass:
Josh, there's a lot of dimensions to that. And if you're talking about the Jefferson Pilot Lincoln merger, the basic characteristics of the two companies were, both companies covered a lot of the same products, but Jefferson Pilot was more completely a life insurance and annuity company, fixed annuity company. Lincoln did some of that business, but had a big position in the variable annuity business. And at that point in time, both companies needed what the other company brought to the table, and that was the basis for the strategic thinking on both sides. And yes, each company had other options, but the Jefferson pilot Lincoln merger was the best for those two companies. We merged, and then executed on the integration. And again, these same principles of best people, pick the best people with the best ideas. Doesn't make any difference where they came from, make sure you're focusing on the future of the company. And it's worked out quite well.
Josh King:
Finance and insurance have been transformed by technology, but at the heart they remain people focused businesses. How has that customer relationship at Lincoln Financial and their experience changed over the course of your leadership there?
Dennis Glass:
We are invested in four businesses, which provide great financial protection for consumers in America. As a matter of fact, our principle-based strategy is providing financial protection for everyday Americans. And so, our four product lines, life insurance, group which includes life insurance, plus long and short term disability and some other products, retirement savings, all of those provide financial protection, and everyday Americans benefit from it in creating their financial security. And that to me, Josh, is such a powerful strategy objective that you come to the office every day saying, "You know, we're an important company. We have a lot of dimensions and functional expertise in the company, but the end of the day, what we're doing is helping Americans achieve their own success." And it's at the retail level, so I keep coming back to the idea of everyday Americans is who we help, and we're very proud of that. And I think it's one of the soft things that brings people to Lincoln, the idea of helping everyday Americans.
Josh King:
Talking about doing now what's in the best interest of employees, whether we're talking about the consolidation of the industry in the nineties or the ongoing impact of digitization and technology, change in any business is constant, certainly in the financial services industry. People in organizations, Dennis, they tend to resist change. What have you learned over your career about how to enact productive change in an organization like Linc?
Dennis Glass:
The concept of change is too loose, and so if you just talk about change in a general sense, it's not motivating or compelling to anybody. But if you can communicate the strategy in, "We've been doing it this way, and we're going to change to doing it that way for the following reasons," so people can see what the difference is and why we're doing it, this communication of strategy, clarity of strategy, that's the key, I think, one of the keys to creating a great employee environment. They know why they're there, they know the direction that we're going, and they're clear about how they can succeed because they know what the objectives of the company are.
Josh King:
Often, external forces outside of your ability to communicate, whether they be cultural, technological or economic, can force change on companies. What can executives do to make sure that their companies and their employees stay innovative and proactive, rather than reactive?
Dennis Glass:
Innovation is another one of those loose terms. There's big I innovation, there's little I innovation. Lincoln is very good at little I innovation, taking steps to do better on a continuous improvement every day, by being innovative in the way we interact with our customers. Let me give you an example. We decided three or four years ago, that we were no longer from a customer service perspective, we were no longer competing with Prudential or Northwestern Mutual as the comparison for our levels of service. But we were competing with the born digital companies' level of service. So, if you can order something on Amazon at five o'clock at night, and get it delivered at nine o'clock the next morning, you're not going to want to sit on a phone for 20 minutes doing a change of address. That objective of being able to compete from a service level with the born digital companies, is what drove us to make a hundred millions of dollars of investment over the last three or four years, in improving our digital capabilities.
Dennis Glass:
And as a consequence of that, when the pandemic hit and we had to move 11,000 people from the office to home, we had to interact with our distribution partners and our customers in a different way, the fact that we had made so much investment in digital permitted us to do that much more easily than hadn't we done it. But we weren't anticipating a pandemic when we made the digital investment, we were saying, who are we competing against from a service level? And how could we more effectively compete with them drawing more customers to us? And once they are customers, keeping them as customers because of the level of service that we're providing, in the different ways that we're providing it.
Josh King:
Dennis, as we head into our midway break, late this summer it was announced that Ellen Cooper would be succeeding you in 2022 as CEO. All the way back in 2001, you were named COO and president of Jefferson Pilot, ahead of being named David Stonecipher's successor as CEO, the same setup that would happen five years later when you succeeded John Bosha at Lincoln Financial. How did being on that side of the transition twice, help you prepare for your current process of handing the reins over to Ellen next May?
Dennis Glass:
The answer to any successful CEO transition begins what we refer to as outside the event. The event is when the CEO decides it's time to inform the board that he or she is retiring, but the most important work that's done is succession planning leading up to and before that decision is made. And so, at Lincoln at all levels of our organization, developing people, experiential, getting experience in different jobs and things like that, that's how you get people prepared to go to the next level, if you will. In this case, going from the big job that Ellen had already, to the CEO elect position. And so, it was all of the positive work that we do, again, not just with CEO succession candidates, but at every level in the organization. Giving people the opportunity through educational programs, learning programs, through experience, to broaden their capabilities and move forward. That's the most important piece of succession planning.
Dennis Glass:
Once you get to the event, and you've acknowledged that it's a good time for me to move on, for personal reasons and otherwise, then you have to have a great process at the board so that they can really understand the capabilities of the candidates. They really have an understanding of what the leadership traits in the context of the environment that the new CEO will be working in. And so, you do a lot of work around developing the board, develop some leadership trait expectations, and then compare that against the candidates. And so to repeat myself, the process leading up to the event is the most important piece, because you've developed leaders who have the capacity to take on the CEO job.
Josh King:
After the break, Dennis Glass, CEO of Lincoln Financial Group and I are going to discuss the lessons that he learned navigating the company through the times of growth and also the times of crisis, as well as what's next for his career. That conversation is coming up right after this.
Speaker 1:
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Josh King:
Welcome back. Before the break, Dennis Glass, the CEO of Lincoln Financial Group and I were discussing his career and the creation of the modern Lincoln Financial. Dennis, you were named CEO of Lincoln Financial in 2007, which means that your tenure has really been book-ended by the financial crisis at the start and COVID at the end. Your leadership on the client and financial side is highly regarded during both of those crises. What did your experiences from the financial crisis, which was captured in a Harvard Business School case study, teach you about leading during a crisis and finding solutions to unprecedented problems like COVID?
Dennis Glass:
Each crisis has its own characteristics. And I will say that the pandemic crisis was a much different experience for Lincoln than the financial crisis. And most importantly, the financial crisis was really a balance sheet crisis because our fundamental strategy, delivery of product to our customers, was really not affected. What was affected, Lincoln was affected by credit losses, which is the financial crisis was all about mortgages going into default and things like that. So the solution in that instance, was really raising some extra capital, which could have been done by the chief financial officer, myself, and the treasury department. And so, the people actually affected by it on a day to day basis were fewer.
Dennis Glass:
At the same time, the stock market collapsed, our share price collapsed. People were worried about the financial strength of the company, our ability to meet our obligations, as any insurance company has that run out 30, 40 years. And so, we had to do a lot of communication with the employees and say, "Look, the company's in a good financial position, we're going to be here. Your careers are going to to be here, your opportunities for growth are going to be here." And so, the communication of the strength and confidence that we have in the future, both to our customers, as well as to our employees was key, even though it was a small group of people that handled the actual resolution of the challenge of credit losses.
Dennis Glass:
That's a much different crisis than what the pandemic was all about, because it affected everybody, and all 11,000 of us, 11,500 employees had to step forward, take initiative, and be involved in solving the problems. In any organization, again I mentioned this earlier, but what you're doing and why you're doing it needs to be the centerpiece. And so, as we moved into the pandemic, we set out three objectives for our company. And the first one was we are going to look to protect the health of our employees, as our first order of business. We really wanted to make sure that we were taking every action that we could possibly take to protect the health of our employees.
Dennis Glass:
Our second objective was continue to deliver the service that was expected by our distribution partners and customers, so we continued to run the company. And I've already mentioned, we were in such a good position to be able to do that, because of our investment in digital. And our third priority was to do our part as a company in America, to help the communities that we worked in, and our country in general through the crisis. And so, we hope that the way we protected our employees and continue to run the business in a positive way for customers and partners, and then doing what we could do to help America get through the crisis.
Dennis Glass:
Those were our three objectives. We communicated those objectives, made sure everybody understood that we were making decisions with those three things in mind. People got on board and they understood it. It was an incredible amount of people just saying, "This is a challenge, but I know where we're going, and I want to help the company be successful. I want to help America get out of this problem." I'm just so proud of the overall effort of our 12,000 people. But this is a situation unlike the financial crisis, where you had to involve everybody in the answer, because everybody was affected by it. Again, if you have to move home and start working, and you've been in the office for the whole time, that's a whole different series of challenges. And we've all heard about them, childcare and things like that.
Dennis Glass:
So, everyone stepped forward and did a great job. And once again, it was clear to everybody what we were doing and why we were doing it. So in this instance, I will add another leadership learning that we had. We all had to be empathetic with each other, because everybody was in a completely different environment, short tempers from time to time or the difficulties of the circumstances for individuals. So, one of the things that we added to communication and clarity of objectives was let's just be empathetic with each other, because all of us are struggling in many different ways. And so, if we say something go goofy on a phone call, let's forgive each other for saying it. So that was another thing that we learned.
Josh King:
How are you hearing both the feedback, and do you have any summation of how they appreciated or not, all those efforts to communicate?
Dennis Glass:
Well back to communication, it's a two-way communication, Josh. So we introduced a new program, which we referred to as Feedback Fridays. So at every step of the way during the crisis, as we made the changes that were necessary for the crisis, we got feedback from our employees. And so I knew every Friday, what the challenges of individuals were and how they were reacting to the policy decisions that we made. When you ask people to give their view on what's going on, that in and of itself is important for the success of the company. But then on top of that, you get some good ideas.
Josh King:
Talking about good ideas and feedback, Dennis, for the layperson who doesn't know a lot about life insurance and annuities, how has the increased morbidity and mortality of what's now 720,000 COVID-related deaths, affect the books of a big life insurer? How does it affect your future product design and thinking about your business?
Dennis Glass:
Yeah. The pandemic, because we're a large life insurance company, both on the individual life and the group life side, obviously the dollar amount of claims that we had related to the 720,000 people that you've just mentioned, and it's horrible for America that this has happened, manifests itself in a significantly higher death claims for us, the businesses. So, paying a claim is paying a claim, that strategically didn't affect us that much. What's been a bigger challenge for the insurance industry over the last 36 to 48 months is the decline in interest rates.
Dennis Glass:
And insurance is a simple business really, you collect a premium, you invest a premium and you pay a claim. And so, when interest rates go down, the amount of investment income to pay the future claim goes down, so you have to redesign your products and the consumer value propositions, and other things to be responsive. And we've done that very effectively at Lincoln. Back to our earlier question about innovation, this is where innovation happens. When you have challenges in the macro environment that makes you have to come up with new ideas and your product development people, your distribution team at the company, working together to grab new opportunities as well as overcome hurdles.
Josh King:
I was reading some recent reporting, Dennis, on office occupancy in New York, Philadelphia and other major east coast cities. And most are seeing about a third of the number of office employees, as companies roll out their staffing plans to the new normal. How is Lincoln Financial thinking about the future of work, and what will the workplace look like for you post-pandemic?
Dennis Glass:
We learned in a very short period of time that we could be much more effective virtually than we ever anticipated. And that's both in the context of the home office employees, and our distribution-related employees. Virtual has turned out to be really an effective way to operate. And so, rather than like some companies did, wait for yesterday to come back, we took what we were learning on the run from the effectiveness of virtual, and developed a whole new distribution strategy. Our distribution organization used to say, in-person activities represented about 75% of the way they interacted with their customers and 25% virtual. As a result of spending millions of dollars on understanding the future of distribution, that's going to flip. There's going to be about 40% in person and 60% virtual, a very big shift. And of course, you don't do that just by saying, "Well, we're going to start using virtual," you have to invest in the technology and training of the people to be effective.
Dennis Glass:
Similarly, on the home office, or being in the office or being virtual, again America in general was surprised about how effective you could be. We've been running two years with actually improved customer service metrics, even though the whole company but for a couple people are working from home. Who would have ever guessed how effective we could be? Now, let me hasten to say our investment in digital capability is what permitted us to be successful in both those fronts.
Dennis Glass:
But the way we're going to come back to the work in the future is with much more flexibility. So, let's say that pre-pandemic, I'm just going to round this off, maybe 30% percent of our people were virtual and 70% in the office five days a week. The new business model is going to be maybe 30% virtual, maybe 5% in the home office every day, mail people and sorting and things like that, and then the middle 65% is going to be flex, people in the office two days or three days a week, and then at home the other times. And people talk about being in the office or being virtual, it's not really the right question. The right question is, what's the most effective in-person interaction, whether it's in distribution or in the home office, that would cause you to want people to be in the office? What's the most effective virtual interaction, either with employees among themselves or with our customers in distribution?
Dennis Glass:
And so, it's not in the office or out of the office, it's what's the most effective in-person activity, and what's the most effective virtual activity? One example of that, we have 1,800 customer facing employees. Well, oftentimes the way they would meet with a customer, our wholesalers would get in the car, drive for an hour, go to the office of their customer and spend 45 minutes, get back in the car and spend another hour. So you had two hours in the car for a 45 minute meeting, and now you can do the 45 minute meeting virtually, in some circumstances, without the two hour drive. And so, you've picked up two hours of productivity.
Dennis Glass:
Now, just to come back to why would we still do in-person, developing relationships with customers, developing new customers, that's a more in-person activity. You have to be able to meet people in their turf and develop the relationship, which can be done better in person than virtually. So again, I come back to what is the most effective in-person activity and the most effective virtual activity? And test everything that you do in the company against those two questions, and you come out with the answer to what's the long term employee model, what's the best distribution model?
Dennis Glass:
And by the way, we did, back to what you said, thinking we have a lot of process, but after about 60 days of recognizing how effective virtual can be, we analyzed 150 different job classifications at Lincoln and bounced each one of those job classifications off the question, what's good about this job in terms of in-person? How much time is in-person helpful, how much of the job can be done virtually? And that's how we came up with our long term model.
Josh King:
We started this conversation, Dennis, with talking about some great quarterbacks, some great teams. We mentioned Ron Joworsky, Randall Cunningham, Tom Brady. I'm wondering, as you think about as a head coach sort of, about the traits that you look for in building the cadre of strong leaders, as strong team members to lead a Fortune 500 company, I'm looking at the leadership site of Lincoln Financial Group. Craig Beazer your GC, Ellen the CEO elect, Randall Freitag, John Kennedy, Jamie Ohl, Jen Warren, Kenneth Solon, what defines the traits that you've put together over such a period of time that makes this particular group click well, both for employees, for customers and investors?
Dennis Glass:
The most important thing that the leaders of a company can do is create a culture that attracts strong talent. And once the talent is here, develops the talent. Our culture is defined by eight leadership traits that we have, and we hire people who have manifested those traits. Once they come into Lincoln, we have a series of learning and development programs, around increasing the effectiveness of these leadership traits at the individual level. And then we pay people, when they manifest or they show that they're doing it.
Dennis Glass:
So we have eight, but I will tell you the three that I think are most important, is we start off with optimism. We're an optimistic company, but Josh, it's not optimistic in the sense that we're going to wake up tomorrow and the pandemic's going to mysteriously be gone, or we're going to wake up tomorrow and interest rates are going to be back up 300 basis points. We are optimistic because we have the right strategy, we have the right culture, we have the right people, we have the right resources for us to both grab new opportunities as well as overcome hurdles. And so, this sense of optimism, I think it's very powerful because I wake up in the morning, I say, "Holy mackerel, another challenge." But then I say, "Yeah, but we have the right strategy, we have the right people. None of us have to solve these problems by ourselves, we're all working together to advance the company." So, that's one of the leadership traits that we feel are important.
Dennis Glass:
The next one is diversity and inclusion. Diversity and inclusion at Lincoln starts with the idea that we create a safe environment for people, no matter gender, race, life preferences, we want everybody at Lincoln to feel like they can be who they are when they walk inside the walls of Lincoln, and be respected for who they are. We just think that's the best way to... And it's the right thing to do, but at the same time, when you free people up based on their experiences, to make contributions to the discussion around any issue, this diversity of perspective and experiences is really very powerful.
Dennis Glass:
And then the third one that is critical, is execution. You can have the best strategy in the world, but if you don't have a process to make sure that you're executing on the objectives that we have set out as a management team, you're not going anywhere. So, those are the leadership traits that, again, we have eight of them, but the three that I emphasize all the time.
Josh King:
Staying on that topic, just as we begin to wrap up, Dennis, in 2017 you were one of 175 CEOs to sign the CEO Action for Diversity and Inclusion Pledge. And last year, announced an action plan to promote diversity and inclusion. At the time you said, "It's our responsibility as an organization to advance racial equality, we're committed to driving measurable change. And importantly, we are accountable for it, to our board of directors." What does that part of the plan specifically include? How have you begun to affect change, and how do you think it compares to where corporate America is overall?
Dennis Glass:
Our diversity and inclusion plan, Josh, is all about why we believe it's important in the first place, because of what it does for the advancement of the company and our customers and so forth. But then you have to drop down the next level and say, it's not easy to get the right amount of minorities into your office, certain levels into the broader employee population. So we've always done a good job at that, but we're amping up our ability. And now I'm going from a safe environment, to an environment that has the right proportion of... You want a diverse population, and you need to understand where you stand, and then what things that you need to do, what section of the minorities that you want to increase at the company.
Dennis Glass:
What we've done, is we've put into our incentive program a set of objectives, in the near term to do two things: one, increase the minority population of our officer pool, and within the minority population of our officer pool, increase the African-American officers. And that's necessary, because the number of officers that are African-American relative to the total population of African-Americans at Lincoln, is too far apart. So, we're doing a lot of recruiting, we've hired minority recruiters, we're doing programs at different Black colleges in America. And so, we're doing quite a bit just to advance that goal. But everybody at Lincoln believes racial justice, diversity, inclusion is the right thing to do, but sometimes you have to get more specific than just everybody believes it's the right thing to do. You have to put specific outcomes in place, that you're expecting, build programs around those outcomes, and then measure all of us to make sure we're doing what we can do to make the improvements.
Josh King:
As we wrap up Dennis, we talked about this earlier, you are in the middle of affecting this CEO transition. As part of that, you're going to be transitioning to Chairman of the Board of Directors of the company. What are your particular plans for that role and beyond?
Dennis Glass:
As CEO, you can take two positions with respect to the board. One is that it's a requirement, and you'll deal with it. Or two is, it's a huge resource for management, the whole company, and how can you tap into the board as a huge resource? And that's what I've always believed. I've always believed that management's job is to serve up issues in a complex organization like Lincoln, or any insurance industry, but serve up the issues to the board of directors in a way that you can engage them in a very rich conversation about outcomes, and benefit from the experience, and why you put them on the board in the first place. And so, that's the relationship we have at Lincoln between management and the board, so I certainly when I become board chair, want to continue that type of interaction between management. And Ellen is 100% on board for it, on board for the board relationship.
Dennis Glass:
And my job as the Chairman of the Board will be to support the management team. Provide advice when they ask, and make sure the Board of Directors itself has the right amount of talent, diversity, and so it's a powerful source of experience that can reflect on helping the management team be more successful in the objectives of share price appreciation, and drawing great talent into the company.
Josh King:
It's been an incredible journey, and a journey that as you just laid out, is going to continue at Lincoln National for you. Dennis, thanks so much for sharing part of that journey with us today Inside the ICE House.
Dennis Glass:
Josh, I greatly enjoyed our time together, and thank you very much for the invitation.
Josh King:
That's our conversation for this week. Our guest was Dennis Glass, CEO of Lincoln Financial Group. That's NYSE ticket symbol, LNC. If you like what you heard, please rate us on iTunes so other folks know where to find us, and if you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet us @icehousepodcast. Our show is produced by Pete Ash, with production assistance from Stefan [Caprio 00:48:23] and Ian Wolfe. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks for listening, talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources, and not independently verified. Neither ICE nor its affiliates, make any representations or warranties expressed or implied, as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
