Bold: The New Normal
If there is one thing virtually everyone knows, it’s that Henry Ford had a big, bold and better idea. And many know how smartly he expressed it. “If I had asked people what they wanted,” said the founder of Ford Motor Company, “They would have said, ‘faster horses.’”
Later, however, when Ford’s customers started asking for more colors and designs, he, well, put the brakes on. The company’s progress stalled. Over a five-year period in the 1920s, Ford’s U.S. market share dipped from two-thirds to one-third.
So, what does this have to do with financial security?
Mainly this: disruption is not new. It has always been a force for progress. And to create the future, companies must continually disrupt themselves and their markets to find and deliver the best-possible experiences to clients. Sure, being disruptive means being bold. And it begins with a relentless focus on the changing needs of customers.
Today, if you were to ask most people in our country what they need to achieve financial security, they would not be able to say much more than this: “I need help.” Through our experience, and our research, we have identified a “nagging gap” between what people want from our industry, and what they are getting. Clients tell us they want an experience that is simple and seamless, with the right blend of products and personalization. Basically, they seek expert advisors and a rich digital experience.
To set up our clients and company for success in the future, we are transforming the experience of helping people achieve financial security as no one else has before.
Among the steps we are taking are these:
- Several years ago, we shifted our business strategy to focus on integrated financial planning, with our expert advisors combining risk and investment products to help clients achieve financial security. For the industry’s leading life insurance company (as measured by annual direct sales), this new approach to financial security was not taken without risk. Could we recruit and retain the right talent to help us get there? Would clients place the same trust in us for investments as they did for insurance? Today, we are a top five independent broker-dealer with $125 billion of client assets under management. Our advisors and clients track and act on living plans instead of those that are episodic and gather dust on a shelf.
- Three years ago, we acquired fintech start-up LearnVest. Together, we have created an unrivaled and unified team that is now designing a digital platform to support our advisors and underpin the best client experience in our industry. When we announced we were joining forces, we raised eyebrows and questions of what we possibly had in common. To us, the answer was crystal clear. Both companies had a shared vision of helping more people achieve financial security, and we could get there better and faster together. This was another watershed disruption moment for Northwestern Mutual. With LearnVest’s digital expertise and proprietary planning tool, the acquisition was critical to kick-starting our progress, and our joint teams have come together to transform the client experience. We recently decided that further integrating is the right next step to accelerate our momentum. We are full speed ahead with growing our New York office, hiring across all campuses and investing and innovating to ensure clients get the experience they deserve.
- Last year, we changed the Milwaukee skyline and how we defined “office space” by opening a new downtown headquarters, which is uniquely designed to help employees collaborate and innovate better and faster. Ultimately, this will help us deliver even greater value to clients.
- We launched two different venture capital funds in the past two years to better understand disruptive forces inside—and largely outside—our industry to identify the best and most innovative ways to serve clients. (You can look for more from us in this space soon.)
- We also have taken a majority position in ClientWise, an industry leader in coaching and developing financial advisors to provide a state-of-the-art client experience.
As we travel the path to transformation, I continue to get questions such as these: Why not leave well enough alone? Why take what has worked for eight generations, and is working for more than four million clients, and change it? My answer: we’re not simply changing it. We’re disrupting and transforming it. There really isn’t a choice anymore if you want your company and clients to win. As IBM CEO Ginni Rometty recently noted: “The incumbents of the world understand that they can be the new disruptors, and they are going on offense to seize this opportunity and to capture this moment.”
I realize people often associate companies like ours with a certain conservatism. I am instead inspired by and reminded of times in our history when we pursued a bolder future.
Sixty years ago, our company’s President, Edmund Fitzgerald, recognized the enormous potential of computers. He saw how they would help expedite claims, store client records with integrity and, basically, serve clients faster. He formed the “Electronics Committee” and instructed its members to bring the company into the Computer Age with real speed.
Sure, other insurance companies were using computers as glorified calculators. But Northwestern Mutual’s Electronics Committee had a bigger, bolder (and yes) better idea. The result was a system that served as a backbone for the entire company’s operations. Northwestern Mutual became the first company to buy a large mainframe IBM computer.
I have to believe such innovation didn’t come to pass without questions. I’m sure some found the transformation unsettling.
Today, some might say that being disruptive takes a certain amount of chutzpah, a kind of boldness that may seem out of character.
To which I say: leaders must always be bold when focusing on how they will deliver future value to their customers and clients. As we transform, we will of course remain steadfast in doing the right thing for our policyowners and clients. Our values are non-negotiable. But we will never allow comfort with the status quo to block progress.
That’s why we believe Northwestern Mutual, 161-years young, can today call itself a disruptor. And that’s why we can be so bold as to call ourselves bold.
You see, bold is the new normal. Not to disrupt is not to survive.