Name: Prudential CEO Tells How Leading with Purpose Transformed the Rock
Uploaded: 2023-03-17
Duration: 11 min 22 s
Description: The key to retaining talent, says Charles Lowrey, is not more pay but “purpose”

The key to retaining talent, says Charles Lowrey, is not more pay but “purpose”

Prudential CEO Tells How Leading with Purpose Transformed the Rock

Leadership

Prudential CEO on leading with purpose

Charlie. Thank you so much for joining us. It's great to see you. Let's begin by talking about leaving with purpose because when you became the new Ceo of Prudential five years ago, you were focused on the company's purpose. How do you define purpose? And why is it so important? I love talking about purpose and our purpose is to make lives better by solving the financial challenges of a changing world. It is the reason we exist. It's the reason we do everything. That's the reason why so many of our employees work with us. And it is, it is our reason for being when you took charge, you set about to change prudential and transform the company, what did you want prudential to be? And how did purpose fit into your vision? So what we said very simply was that we wanted prudential to be a higher growth, less market sensitive and more nimble company so that we could earn our existence for the next 150 years as we've been for the past 150 years. But we have to earn that the competition was different. Our customers are changing. And so we wanted to have a strategy that made sense as we go forward for the next 150 years. Well, I understand that Prudential has changed dramatically in the past five years. The words people use to describe your company today are agile innovative technology oriented risk taker. I mean, that's not what we expect to hear from a company that's in the retirement and insurance business. Tell us more about how that all came about for a number of reasons. One, if you look at the context in which we operate, our competitive environment was changing rapidly, but more importantly, our consumers were changing. They want things when, where and how they want. And in order to provide our consumers and clients with the products and services they need, we had to change in order to serve the demographic. And it's interesting that most of these changes were done during COVID. Why did you do all of that at such a difficult and uncertain time? I mean, Prudential wasn't in trouble. It's highly ranked Fortune 500 company even back then. It's known as the Rockets Solid. It's dependable. Why did you feel an urgency to reinvent the company during COVID? Well, necessity is the mother of invention and we had to, no one thought that we would be able to go remote 50,000 people in 40 countries in 48 hours. And yet we did it. And that was a proof point for our employees that they could do more and they could do it faster. That's the first point. Second point is customers needed us during the pandemic. They were scared, they wanted to know the balances of their checking accounts or their, their investment accounts. We needed to be able to supply that quickly to them in an automated passion. We had to invent things on the fly that conserve the customers. So it was the pandemic served as an accelerant for so many of the things we needed to do. What was the reaction of your employees? Did they understand what you were doing and that these changes had to be done right now. Yes, they did because they were on the front lines. They saw that we had to serve our customers and they were actually excited. They were excited that they could do things faster and they could accomplish things. They saw the results of what they were doing on our customers and the benefits that we were able to provide our customers as a result of the changes we were making. Despite all the change and the positive stuff that you were doing, we saw during COVID that many employees left their companies, including at Prudential, went on to other companies as you watched this revolving door. What did you learn of seeing people jump from job to job? What did you learn about that? We learned two things, the importance of culture and the importance of purpose. People could jump from job to job. You're absolutely right. It became frictionless to do so because you were at home and you were a box on a, you were box on the screen and it was easy to do that. So what retains people, what retains people is that they feel meaning in what they do and they feel meaningful in helping the company. And if they do that, there's a far more likely chance that they will stay with you as opposed to just go somewhere else from everything that you learned. What in this new world of work? What do you think is the key thing that you can attract and retain employees? Is it more pay? Is it a flexible work schedule? What have you zeroed in on? It's not pay. So if, if I hire you and it's just because I'm paying you more, that's a transaction, that's nothing more than a transaction. There is no economic transaction, there's no no real relationship there. What creates the relationship of the employee to the company is purpose and culture. They need to believe that what they work they do is important and it's meaningful and it's meaningful to the company and that it relates to the purpose for which we exist. Another issue that's weighing on business leaders these days is recession. We all see the headlines every day is the economy going to go into recession. And if so how long, what's your thinking on this? I think we're seeing a tremendous wrestling match today between a stubbornly strong economy. On the one hand, frankly, one that has surprised many people. And on the other hand, a determined fed that is looking to lower inflation over time. Our belief is that we are in a very constructive economy right now. If you look globally, you see, uh you see that Europe is doing better than we thought China is doing better than we thought we've obviously hit peak inflation and that's coming down and that the economy in the U S is very strong. So we think we're going to have A sluggish outcome here eventually, but we won't necessarily go into recession. This is very important, especially for prudential because you manage more than $1 trillion dollars of clients money. How is all this fuzziness impacting the decision that you're making for your investment portfolio? So we invest for the long term for our clients. Our clients come to us for a variety of reasons. We manage assets across many different asset classes and each client has uh its own investment criteria. And we managed to those criteria, you mentioned the fed a moment ago. I mean, the fact that they're indicating that they're going to continue raising interest rates to combat inflation and they're going to stay high. That's actually a good thing for your investment portfolios, is that right? Absolutely. So higher interest rates is better for insurance company and lower interest rates, which we've been fighting for the past few years. Charlie. Let's talk about you and your path to the CEO job at Prudential. It's interesting that you started out in architecture. You went out to graduate school, you studied architecture, you taught architecture and then you even open your own architecture firm. Why did you like it so much? I loved architecture. I still love architecture, married to an architect. And so it's still a huge part of our life. I loved it because it involved art, involved science. It involved creating the built environment for people. It's just, it's a fantastic profession. So why did you change? Why did you change? What were you picturing in your new career path? Serendipity has a lot to do with, I think careers and my career is anything but, but linear. So I went back to business school because I thought I needed business experience, having run my own firm and being honestly fairly naive about running your own firm when you just straight out of graduate school. Uh and then went into business for a little while after business school thinking I'd always go back to architecture but never quite made it. So after 13 years in investment banking, prudential, who had been a client for 10 years called and said, would you like to be considered for a job at prudential? And I moved to prudential? Never would. I thought in my younger days that I'd be in business when I grew older and that you would become the ceo of a Fortune 500 company. Not in my wildest. Well, I understand that you like talking to employees at Prudential and you like to advise them and help them with their career choices. How much do you share your own personal story about going into architecture and then uh working your way into business? And is there any one piece of valuable advice that you'd like to leave with them? Yes. So I do share my story as an example of careers not being linear because I think many people think, gosh, I'm here. I want to travel on a single path and that as you well know that that doesn't happen very often. So if I give them a piece of advice, uh it's, it's twofold again, one careers won't be linear, linear. But second of all, follow your passion, follow what you really love because if you do that, you'll succeed. Well, you know, these COVID years has changed a lot of things including uh leadership. How has it changed your job as CEO? I mean, what are you doing more of and what are you doing? Less of you put on your suit and you came to work in your suit with your armor and you didn't really talk about home and business was business. The pandemic taught us a great deal about ourselves and about sharing ourselves and our vulnerabilities. So now my leadership style has changed in that one still has to be a strong leader, the CEO, but you also have to be an empathetic leader. You have to understand more about people and where they're coming from and what their situation is so that they can be as effective as employees as they can be. But also care for their own home life. And what is the reaction, tremendous change and a much deeper relationship and commitment by virtue of understanding again, other people's lives in a completely different nature than we had before following up on where we started our conversation. Tell us how leaving with purpose shape your leadership as CEO it shapes it in a number of ways, but beyond everything else, I'm the guardian of that purpose. I spend much of my days thinking about how purpose is infused in our strategy. I ask a lot of why questions. So in meetings, I'll ask, why is this product or this service helping our purpose? And if it's not, we'll throw it out maybe a good idea, but it's not consistent with our purpose of expanding access to more customers over time. And when you think about expanding access, that is a very big part of our purpose. And it's a very big part of my passion for what we do and why we do it is to expand access to more people so that they can have financial security over time.