From his seat on stage at Commencement in 2005, Roger Crandall, WG’02, had an up-close view of Wharton’s newest alumni. And as each graduate’s name was read, Crandall remembers thinking: “These are the business leaders of the future; these will be our customers.”
He also noticed something else: diversity.
So when he returned to Springfield, MA, the next week, he arrived with the kernel of a plan that has since transformed the face of his company, MassMutual Financial Group.
MassMutual is now the fifth-largest life insurance company in the United States. It is also the third-largest seller of participating whole life insurance, and over the past several years, sales of that product alone grew 14 percent, compared to the industry average of 1 percent. Crandall, who was named CEO of the company in December 2009 and has served as president since December 2008, believes it’s his job to build on that strength—and a focus on demographics and ethics is a big part of his approach. So far, he seems to be doing well; the company saw record sales of its top line in both 2008 and 2009.
A career in insurance, however, wasn’t always in his plans.
After starting work toward a Ph.D. at the University of Virginia in the late 1980s, Crandall switched gears and ultimately decided he needed to be where the action was: on Wall Street. Unfortunately, he picked the absolute worst time to make the move—1987, in the wake of that year’s spectacular crash. “There were no jobs,” he recalls.
That’s when his father stepped in and helped him land an interview at MassMutual. By 1988, he was working in the firm’s real estate investment training program, and what he thought would be a brief tenure before returning to Wall Street blossomed into a career of its own. MassMutual proved to be a “fabulous place to work in the sense that I got to do something very interesting. The people were great and the company treated me fairly.”
Ten years later, Crandall was asked if he was interested in pursuing an executive MBA. He jumped at the chance. His uncle—Robert Crandall, WG’60, the iconic former head of American Airlines—was a Wharton graduate, and Roger was intrigued by the School’s famously rigorous executive MBA program.
“One of the very important things that drew me to Wharton was that not only did it have a fabulous reputation and faculty … but that I had the same core requirements as a full-time MBA student, and I had to have the same number of credits to graduate,” he says.
Because he was already a Chartered Financial Analyst (CFA), Crandall decided to focus on leadership and strategy during his time at Wharton. One of several faculty members who most influenced his thinking was leadership expert Michael Useem, the School’s William and Jacalyn Egan Professor. In the break between the end of classes and graduation, Crandall participated in one of Useem’s leadership treks—a 90-mile hike to the base of India’s Mount Kangchenjunga.
At every lunch and dinner break, a different student led a discussion about leadership. He remembers having a conversation with Useem about ethics—and how important it is to operate with a sense of integrity. “This is one of the areas where Wharton has helped to lead the way in the business community,” Crandall says. “They step back and think about things like that.”
Ethics scandals seem to sweep through the business world every few years, but for Crandall there’s nothing cyclical about character.
“Either you are going to approach life and approach business [ethically] or you won’t,” he says. “It’s not a ‘sometimes you do and sometimes you don’t’ sort of thing.”
But how do you operationalize ethics?
Crandall believes that great leaders come from within organizations, so one of the first things he did when he became president at MassMutual was to establish the Leadership Summit, designed to introduce their top 300 executives to the company’s framework of standards. Case studies are taught by other executives, and participants play a multi-year game in which they must make decisions about the allocation of resources.
Meanwhile, Crandall’s other major focus—diversity—recently won him recognition from the Urban League of Springfield. Urban League President Henry Thomas has highlighted “his visionary and enthusiastic initiatives to make MassMutual a truly high-performing company that values the power in diversity by proactively doing something about it.”
As Crandall explains, his interest in the topic began that day at Commencement: “In all honesty, it all started with me sitting there on that stage just looking at the people [receiving their diplomas] and saying to myself, ‘What are we doing to make sure we reach them?’”
Back at his office he examined demographic trends, and “it became very apparent that the business case for diversity was untouchable.” The rising enrollment of women and people of color in colleges and technical schools and the increase in household formation by the Hispanic population meant that future business leaders—and an increasing number of customers—will come from these groups.
Crandall realized MassMutual needed to look like those future wealth-creators—in other words, a bit more like that Wharton graduating class. MassMutual distributes its products through a network of career agents, so the company has embarked on a mission to recruit the best and brightest—including people of color and women—for those jobs. Crandall estimates the company is 10 to 20 percent of the way to where it needs to be on that front.
Of course, there also remain the challenges of today. Since 2008, Crandall has initiated a series of moves that shed an under-performing business and reduced layers of top administration. Together, the changes have trimmed MassMutual’s workforce by more than 7 percent. The company that emerged, Crandall says, is ready for what’s next.
“It was very difficult and very challenging, but the simple fact is that in the long run that’s what needed to be done,” he says. “It’s easier to get people focused when the wolf’s at the door, but we realized we needed to be ready no matter where the wolf may be.”
