MassMutual Life Insurance Co. chairman, president and CEO Roger Crandall knows how to manage growth—the company has become the number one writer of whole life insurance in the U.S. during his tenure—but he also knows how important culture is to a business, no matter how large it has grown.
Since Crandall took over as CEO in 2010, MassMutual has grown to serve more than five million customers, provides nearly $700 billion in life insurance protection and reached more than $675 billion in assets under management.
But MassMutual’s focus on diversity and culture is a critical ingredient in the company’s recipe for success, according to Crandall.
“What’s changed most about our culture in the last decade is we’ve made a big commitment to diversity and inclusion,” Crandall says. “I’m very proud of the fact that MassMutual is now being recognized as an employer that is very dedicated to that. Almost half our board are women or people of color—that’s a little unusual for a Fortune 100 company, and in our industry, as well.”
Crandall joined MassMutual in 1988 as a real estate investment trainee. In 2000, he joined MassMutual subsidiary Babson Capital Management LLC (now known as Barings), and in 2002 was named managing director and head of the company’s Corporate Bond Management, Public Bond Trading and Institutional Fixed Income units. He became chairman of Babson Capital and executive vice president and chief investment officer of MassMutual in 2005, and was appointed co-chief operating officer of MassMutual in 2007. Crandall was named president and chief operating officer and joined the board of directors in 2008, and was named CEO two years later.
Now, as the chairman, president and CEO, he’s transforming the 167-year-old life insurance company to be more digitally-enabled and nimble, while creating an inclusive, innovative culture that empowers employees and encourages them to take risks on the way to success.
Chief Executive spoke with Crandall about how his company is evolving to better meet customer expectations, the importance of culture at MassMutual and how he balances his CEO responsibilities with his board duties. Here’s what he had to say:
How MassMutual has evolved to meet customer needs in recent years
Our customers’ expectations of service levels have been totally driven by the new tech companies. So the Amazon and Netflix experiences are now the measure by which customers expect every company to deal with on some levels. So the power the customer has is probably the single biggest thing that’s changed there.
So for us, it’s been, in the context of a pretty low-growth industry, pretty significantly growing the company and the number of policy holders and customers we have. It’s really been about making our products and solutions available more broadly and using technology to help both the end-customer, but also our advisors, most powerfully.
It’s pretty fascinating when you look at it. One little example: Back in 2008, every policy we wrote was a paper application with a wet signature. And there was no ability to apply for a policy online. There was no app because there were no apps, for all practical purposes, yet. But if you look at where we are today, over 75% of our policies are algorithm underwritten. So as opposed to going through the traditional underwriting process, they’re underwritten that way. As many as a quarter to a third of our policies through our direct online efforts are now being underwritten without having to go through the traditional, taking bodily fluids process. You know, the gory details of insurance underwriting include pieces that no one really likes. And that is transforming how quickly we can issue policies, and it’s also beginning to impact our costs, which as a mutual company, effectively our expenses roll back through our dividends scale to our policy holders.
So that whole focus on using technology to meet customers how they want to meet us and to give our advisers the capacity to do that, has probably been the single biggest focus over the last 8 to 10 years here.
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The importance of corporate culture at MassMutual
There are a couple of pieces to me that are totally non-negotiable, and the biggest one around that is our commitment to ethics and integrity. We’re a company that was founded in 1851. We’re an unusual company in that we’re owned by our policyholders, so we don’t have stockholders. We have one set of constituents, our policyholders and customers. We don’t have the set of constituents, the policyholders and customers being different than shareholders. And over that period of time, because it’s such a long-term business, we are all benefiting today from decisions that people a generation or two before us made. So we need to continue to remind ourselves every day that the foundation of what we do is ethics and integrity, and doing the right thing for our policyholders and customers. And that is absolutely table stakes.
It’s also things like creating business resource groups. We’re just hitting our 10-year anniversary of business resource groups, and more than 25% of our employees are members of business resource groups. So that has certainly helped.
And then some small things, like in 2015, we changed our dress code to two words: dress appropriately. It sends a message of personal accountability to people. Don’t look in the company handbook to see what you wear to work. Instead, just dress appropriately.
So little things, big things, those have all helped evolve our culture at the same time that we’ve tried to celebrate moving quickly, celebrate failure, when it happens, as an opportunity to learn, not as it was just a bad thing. And that pace of acceleration is particularly important with disruption happening all over the place. You don’t know where the next disruption is coming from. So it’s very important to have your eyes wide open and on all of the different things that are playing out, and be willing to think, “Hey, how could we make things very different?”
How his leadership style has evolved as CEO
I actually have to chuckle, because yesterday I had what I’ll call a “fireside chat” with about 120 interns that we have here this summer. Somebody asked me exactly that same question: “How has your leadership style evolved?” And I choked. When I first started working here, I didn’t have any leadership style. I was just happy to have a job. And my boss said, “Do this,” and I went and did it, right?
When I first started as a manager, I wanted to check everybody’s work, and I wanted to make sure that it was done correctly. And very quickly you realize that doesn’t work, it doesn’t scale. So for me, the breakthrough was understanding that my real job was to put the right people in the position, and support them to make decisions and do the right things. And then in many ways, just get the heck out of their way and let them do their job and not try to micromanage.
So I try to keep an eye on things that are going on. I try very hard not to get too deep into the weeds in most parts of the business. But from time-to-time I love getting into the details, I do jump in and get into the details, several times going multiple layers into the company. So people knowing that I’m interested and care what they’re doing on a granular level, but I’m not there to tell them, “Write this code a different way,” or, “Attack this market a different way.” So I’m very much about helping put the right team together, and then particularly helping everyone to understand the purpose of the company.
No one wakes up in the morning and says, “Today’s the day I’m going to buy a life insurance policy.” Or very few people do. But our mission, to help people secure their future and protect the ones they love, is no different today than it was in 1851. And I don’t care what technology does, I suspect it’s going to be completely identical in 2151. But that purpose-driven leadership can be a very powerful part of what a CEO has to do.
Balancing CEO responsibilities with directorship duties
There are basically two models. There’s the model where the CEO is chairman, and there’s the model where there’s a CEO and then there’s an independent chairman. But in our model, we have an independent lead director that, frankly, has all the authority that a chairman has—in fact has more authority than me as chairman because they can call meetings without me even knowing they’re calling meetings. So that’s our governance check on me having both the CEO and the chairman roles.
But with that said, my CEO job is really to work with the board to set the strategy of the company. The CEO’s job is really to hire the team to execute the strategy. So that’s my CEO role. My chairman role is really to facilitate that strong board governance, and particularly be that facilitator to the board around the strategy of the company, and also to provide leadership to the board, and communication to the board about what’s happening at the company every day.
I think a couple of things really jump out at me here. I frequently get the question, “What does the board think?” And I think to myself, “Hmm. I don’t have anyone named Board on my board. I have 11 independent directors.” And sometimes they all say exactly, and think exactly the same thing. But sometimes they have different views. And the great value of a diverse board is to get those different views out on the table, all with the objective of making the company better and helping it succeed in its strategy and mission.
So I am blessed to have a board of very smart, very business-savvy people from all different industries— from retail, to pharmaceuticals, to healthcare, to utilities, to education. Broad, diverse backgrounds. They all are passionate about making our company better for our policy holders and customers. And frequently, they have different thoughts.
So my job as chair is to help synthesize those thoughts so that when someone in my leadership team or at an employee meeting, says, “What’s the board think about this?” I can say, “Well the board has discussed that, and the board believes…” fill in the blank. So that kind of facilitating role among the board is really a key part of what the chair does. And then flipping over to the CEO side, if you will, it’s then taking that board, taking the direction and make sure that it’s understood by the executive team, and then ultimately by all of our employees.