#253: Roger Crandall, Chairman, President and CEO of MassMutual – Make the numbers mean something

24:55OK, explain that to me. Well, no, again, it's like when the world is under pressure and things are going on, you've got lots of flexibility to stand up and make kind of bold decisions, right? If things are going perfectly smoothly, it can be hard sometimes to make bold decisions. But the environment kind of melting down around us ended up being a real blessing as a new president and a new CEO. So, again, the company was financially strong and a great company, a great board, great collection of leaders and great agents and advisors working with us. But I thought it was the greatest thing ever. Yeah, but you were also at a time where it's just like uncertain as hell.

25:34I mean, I remember I was on the J.P. Morgan Chase board at that time, and it was like that little phone call from J.B. Diamond was one of the scariest I ever got over Labor Day weekend. OK, so you have to manage in this huge time of uncertainty. What did you pick up about it? How do you lead in those uncertain times where you don't know where it's going to end up? Yeah, I think a couple of things. So one is, and you use the right word, especially in environments like that, people do want to be led, right? They want someone to stand up and say, hey, it's going to be OK. We have a plan. Let's put our heads down and execute on the plan, right?

26:09And we didn't get in a position where we had to take money from the government, which some other insurers did. And we kind of managed through that ourselves. But our ability to stand up and say, look, we've got a plan. Our plan is solid. Let's execute. It really worked well. And in fact, that set off a period of growth, of Mass Mutual growing literally at 4 to 5x the industry growth rate in insurance sales. It ultimately led us from being number 15 in market share to number 2 and number 3. So we got tremendous kind of more scale because as other people and other companies were grappling with issues, we represented certainty.

26:48And that's, again, back to being a mutual. We really began to lean into talking about that. Like this is different, right? Shareholders are fabulous, but shareholders' time horizon lives in a cycle where the board's elected annually by the majority of the shareholders. And the shares turn over 50 times a year with all the trading, right? Well, is that how you want to think about a 50-year or 75-year relationship with a company that's going to be taking care of your spouse if you pass away early and taking care of your kids and grandkids if you pass away the way you hope to? The answer in my mind is no.

27:22So we really leaned into the power and strength of mutuality. And in fact, all of those difficult times really set the stage for us to go through a period of extraordinary growth. We'll be back with the rest of my conversation with Roger Crandall in just a moment. But first, I want you to hear this insight from Jeff Colbin, who is a senior editor at Fortune Magazine and one of the best and brightest thinkers on business and leadership. He's also a big proponent of storytelling, and he knows it's key to really reaching and motivating other people. Most of our organizations don't really value storytelling.

28:02They value charts and graphs. and that's okay. You know, we're going to have to make our business decisions based on data and good analysis of data. That's never going to change. But analysis of data is exactly what technology is doing better and better every day. If we try to distinguish ourselves by doing that, we're going to lose because the computers do it better and better every day. At the same time, we all know from personal experience, If you want to change people's minds, if you want to have people remember something, and if you want to inspire people to action, don't show them charts and graphs.

28:47Tell them a story. Go back and listen to my entire conversation with Jeff. Episode 149 here on How Leaders Lead. You mentioned earlier that you had your uncle as your mentor, Bob Crandall. How did that shape just your thinking on mentorship and how to pay it forward? Oh, it's so, so, so important. And it can be little things. I'm reminded of the first time I was asked to go present as the lead analyst on a deal to just an investment committee, right? So relatively early kind of in my career. But at the time, it was like the biggest thing that had ever happened. So I always try to remind myself in my role, everyone I interact with, it's a big interaction for them, right?

29:38So first and foremost, keeping that in mind. And then, again, different folks might respond differently to kind of mentoring, but kind of keeping those connections over time. It just sets the stage for people to achieve the most that they can. And that's kind of a really good feeling. But it was a good feeling as an early manager. It's even kind of a better feeling now because one of my jokes is not really that much of a joke. I don't do anything anymore. I just help arrange people kind of doing things. And if all goes well, I don't really even need to talk to them all that much other than a pat on the back and you're doing awesome.

30:20So it's a powerful thing. And again, I'm the beneficiary of my uncle, but many great mentors here at Mass Mutual and more broadly in life. And I try to think about that all the time. You know, like you, I've always felt that the best leaders are coaches. Give me a go-to question you like to ask people when you're giving them your one-on-ones. Yeah. Well, I mean, one that I think is really important, it's an honest, how are you doing? Right. Because people say, how are you doing? I'm fine. Right. That's kind of standard, you know, kind of conversation. But, you know, everybody has so much stuff going on.

31:05And really getting the most out of people is hard. Right. Like there's an old joke, How many people work here? About half. And actually, academic research kind of shows that that's about the level of engagement most folks have. So I do really like to get a little bit of a check-in, if not every meeting, pretty regularly, just how are things going? Is it you got something going on with your family? Have any health issues? I mean, just anything. And what can I do to help? And that gets to the other one. What can I do to help? What do you need me to do? What would you like me to do? And if the answer is nothing, keep out of my face, that's great.

31:43Right? Go forward. But I think understanding where people are and then I very much try to encourage people, especially in today's day and age, you have to compartmentalize and take some time for yourself. The information flow that's out there today is so much in our ability to have continual access with mobile devices. You've got to play the long game. So I do encourage people, especially this time of the year, take vacation, turn off the work phone. I have a very high degree of authority. MassFuture will be here in a week when you come back. So you've been, you know, in this role for more than a decade.

32:21And yet I understand one of the things that you talk about is the need to reinvent yourself every four or five years. And, you know, talk about how you've done that. Yeah, well, let's start with, again, you said I got lucky, right? Came in just as there was a huge financial crisis. But that huge financial crisis then created a completely new regulatory environment. And it was a global regulatory environment. So at that time, MassMutual had significant insurance businesses internationally, as well as here in the US. But all of the changes that came out of the great financial crisis, particularly around regulatory capital between European companies and American companies, effectively began to push Europeans out of the insurance market.

33:14So we saw it as an opportunity to really double down on the US. We ultimately sold businesses in Hong Kong and in Chile and in Luxembourg and in Japan and deployed all that capital to write insurance on more Americans. So the world, as the regulatory world changed and enabled us to make a strategy change to become a scale manufacturer of insurance products. And then, again, this wasn't me saying, ah, it's four years in, I need to do something different. But it became very clear that distribution was going to, it was taking and was going to continue to take a bigger share of the profit pool in the insurance business.

33:55So we really, really, really leaned into investing in distribution. And that was a change that It included us adding a third-party distribution organization, not through our own agents, which culturally was a big thing. The company was a very agent-driven distribution kind of company. So again, the way I think about it, there were natural changes the company should have been making because of the changing kind of environment, both macro, obviously the zero interest rate environment was a really big deal for the life insurance industry for a long time. And it just so happened that I had to kind of reinvent both myself and the company kind along the way.

34:32So that's been a way I've tried to kind of stay kind of current. Of course, maybe the biggest change ever is playing out right now, and that's the rise of AI and agentic AI. We'll see how that plays out over the next few years. But I think every CEO today is thinking a lot about how is their company and industry going to be different in a world with these large language models powered the way they are today. What do you see as the most promising ways that AI will change your business? Look, I think the first is no one has ever woken up and said, after they say, yes, I want to go buy a life insurance policy, they go, well, that was the greatest buying experience I've ever had in my life.

35:15When it includes someone showing up at your door to take bodily fluids and with a scale. I am optimistic we are going to be able to use AI and machine learning to have the underwriting process be as predictive but less invasive? Because what we're really trying to do is give everyone the lowest possible cost of insurance. And we need to understand what we're doing is predicting your future mortality. So I am optimistic it's going to make end customer experience easier. I also think it's going to make distribution partners' experience easier. And again, many, many, many folks in the financial ecosystem do an extraordinary job of thinking about the investment side of things, but they don't think much about how protection kind of plays in.

36:02I think there's a great opportunity to integrate protection into the process more smoothly. And that's going to enable more people to have coverage because it's kind of wild. Half the people who have life insurance, when you ask them, do you need more life insurance, say yes. And 70 % of the people who don't have life insurance say, hey, I really should have it. Not sure about the other 30%. But again, there's a rich opportunity, but there's a perception that it's more expensive than it is. And there's a perception, which may be sometimes real, that it can be not a great user experience because, like I say, anytime you've got to go deep into somebody's health like that to give them the best offer, it can be more invasive and take longer than they'd like.

36:46So I think there's a big opportunity for those things to kind of change going forward. And that will help ultimately the over 100 million Americans either don't have coverage or don't have nearly enough hopefully get it. And that will make their families more secure. How are you resourcing the business to take advantage of this seismic change with AI? So, and again, boy, it's changing quick. So it turns out I got lucky, right? I literally, I got an email from someone who found me in the Wharton Alumni Network, who'd gone to Wharton, sent me an email and said, hey, I'm looking for a place to work for the next 20 years.

37:30And my wife is from Amherst, Massachusetts, which is right up the road here. And I got that email. I called him, brought the guy in, and he ultimately worked in a lot of things with us. But he convinced me of the need to kind of really build a data science capability. And we decided to build it ourselves, not to kind of outsource it. So we actually worked with the University of Massachusetts and Smith and Mount Holyoke. And we brought kind of professors on and we kind of built our own program. And as part of that, we built data architecture around it as well. And again, I barely knew what these things really were.

38:08I mean, I'd read about them, but it turned out that getting our data organized was integral to being able to now play the game that we're playing, where we've kind of accelerated things from beta test into early production to actually take advantage of these AI tools. That said, I still think we are not even two innings in baseball terms into this game. Maybe we're only in the first inning, but that has set us up. So we needed technical expertise, but critically, we had to own it ourselves and not depend on an outsourced partner. Now, outsourced partners can be hugely valuable and are hugely valuable to us.

38:46But I wanted to have enough of that kind of core capability inside the company to know the questions to ask and to try to be more thoughtful about how we rolled it out. What do you think leaders today should be doing to get smart about AI? Again, back to get a lot of views and get a lot of opinions. I think a couple of things that I'm doing. One is absolutely talking to other CEOs in other industries to see how it's being applied. Spending a lot of time talking to, I've got a lot of cousins, nieces, and nephews. So yeah, it's interesting talking to someone who's about to go to college who's used AI to effectively answer the question they were given in high school and then used AI to mask that they used AI before they show it to the professor or show it to the teacher.

39:31So I am trying to spend time with more digital natives. Of course, you're going to talk to the quote-unquote usual suspects that are here to sell you something. Sometimes you learn something, but I don't know that it's worth the price of admission. But I do see how it's being used elsewhere is really important. And that I'm, I'd say, playing around with it a fair amount myself. It's been absolutely fascinating to me to see the evolution. How do you do that? So I'm using just ChatGBT and Grok. and I've just got apps on my phone and I'm just personally just, you know, either putting information into them, asking questions, asking them to manipulate it.

40:09So I'm just kind of rolling up my seeds literally just as a hobbyist, I guess, would be the way to think about it. And then come in and talk about it with the team. But I still feel I've got this nagging sense I'm not going fast enough in that space then we run the risk of falling behind if somebody else gets there first. Well, you haven't fallen behind in terms of the results you've generated. You've had revenue growth year after year, big revenue growth. How do you, you know, as a leader, how do you overlap great success? What's your learning on how to get an organization to go to the next step after you have one great year?

40:49Now you've got to do it again. You know, that wears people out. You know, I mean, how do you do it? Well, again, I keep kind of going back to this purpose of the company, right? I mean, so it's, again, the numbers, all these big numbers are hard to wrap your head around, right? You know,$40 billion in revenue, a trillion dollars in coverage. I mean, it's like, how do you? So again, I keep kind of going back to, you know, what we did last year? You know, we paid claims to, you know, 112 ,000 families. That's 112 ,000 situations that really stunk most likely. but at least the part of stinking of not having money to pay a college tuition was taken care of.

41:30So again, it's not about taking the, you know, I love high compound annual growth rates over time, but more importantly, I just like having more family. So I mean, again, keep telling those stories about how we help folks is a pretty good way to do it. As a leader, do you think that's the greatest difference you do in terms of driving results? I mean, if you had to pick one thing that you do that contributes to these results, what would it be? Your differentiator? I think it all comes down to having the right team, the right leaders.

42:06I think we've made some things you can look back, decisions that you can say, oh, that was a good strategic decision. And, of course, we made them with the best information kind of available at the time. I think building leadership teams over time that kind of buy into the purpose and mission of the company. And then, frankly, being aligned with the board as well. It's a unique situation. We're not being public. You have to think about how do you create the right long-term incentive plans to align interests where timelines may be different. Again, I've got 150 ,000 policyholders that have been with us 50 years or more.

42:42um that's that's kind of wild my oldest policyholder has been with us 90 i think 91 years currently sadly the oldest policyholder turns over with some regularity um but uh but but uh having a policy 90 plus years is pretty common you got to kind of keep that kind of alignment but i think my biggest thing is getting the right people setting the strategy and then and then encouraging to go you know great people want to work for leaders that they trust so so i'm curious Roger, you know, what's one thing you've done intentionally to build trust within your leadership team? I've really, really had the view that first, be transparent and authentic.

43:23Like, again, I could have smiled and put on a red shirt, Red Sox shirt and walked out and thrown out the first pitch when they asked me to. And I said over my dead body. You know, so I think being authentic in everything is very important. And then I think people can tell if you're authentic or not. And then that begins to feed on itself. So again, once I figured out how special this company is in terms of thinking about things in a multi-generational way, about being aligned with our policyholders, about always doing the right things for the policyholders, people see that and it kind of pays off.

44:02So I think that transparency and authenticity is a really big deal. And then also, I've got your back, right? Mistakes happen. If things don't go well, I'm not going to throw you out. If I cheat or steal, OK, that's different. It's a complex world out there. And if things don't go well, I want to make sure we have your back as well. And I've seen where you've said it's important to remember your past mistakes rather than push them underneath the rug. What's a mistake that you personally keep coming back to because of how much you learn from it? Yeah, I mean, look, I will go back. We joked about losing$3 billion, and I joked about making$10 billion kind of somewhere else.

44:49We should not have lost that$3 billion. And again, it was something where there were people talking about the froth that was going on in the US housing market at the time. And there were people talking about what was happening with the really aggressive lending practices. But relied too much on the perceived wisdom, which was home prices don't fall. They haven't fallen since the Great Depression. Right. That was that was what everyone was kind of saying at the time. So I kind of go back to that one and back to this, making sure you're really talking to a wide array of folks. I also think it set up again, we got a little bit of group think there that hurt us in terms of getting our positions in the size they were.

45:40So I wish we'd only lost a billion instead of the three, I guess. Sometimes that's good. That would have been pretty good. The size of the balance sheet. With all the responsibility and the prestige you have when you have the top role, I mean, what's one practice or mindset that keeps you grounded? Yeah, like one for me is, and again, I'm really fortunate. We have agents in every state as well as in some U.S. territories. So I do get the opportunity to get around the country and talk to our advisors. And to me, it's just a great reminder of what we do and how it works. And it's also a great reminder to me of just how big and broad our country is.

46:22So again, sitting here in Massachusetts today, and Massachusetts is just different than being in Tennessee. It's just different than being in Washington State. It's just different than being in Arizona. So I really, really, really like getting out and talking to our advisors who are, you know, We've got about 7 ,000 there from 22 years old to 78 years old. And it's a really, really, really great way to remind me of what we really do and how we make a difference for folks. You know, Roger, it's been so much fun. And I want to have some more with you with the lightning round of questions that I always ask.

47:00So are you ready for this? I'm afraid so. The three words that best describe you? Intense, joking, a little analytical, I guess. If you could be one person for a day besides yourself, who would it be? Babe Ruth and the 27 Yankees. Your biggest pet peeve? Being late. I hate being late. Who would play you in a movie? I'll have to ask my wife, but we'll go with Brad Pitt. Oh, well, you know, I was thinking Ben Affleck, Mike B. Your favorite place to fly fish? I'm going to go with Tarpon off of Isla Morada. All right. And how about skiing? My son lives in Colorado, so I love skiing in Vail. You might have answered this, but your favorite Yankees player of all time.

47:40My favorite player is actually Mariano Riviera. He was awesome. What's the one thing you do just for you? The one thing I've been doing for a while just for me is I meditate every morning for 10 minutes to try to get grounded before the day starts. And that's totally me time. Besides your family, what's your most prized possession? My old pair of skis that I've been using once in a while just for fun that I've had since I was in college. If I turned on the radio in your car, what would I hear? Well, probably CNBC. What's something about you few people would know? I've been told this, that I've actually got a pretty good sense of humor.

48:12I come across as I am smiling kind of guy, but I do like a good joke. What's one of your daily rituals, besides meditation, that you never miss? I got to do my pushups when I wake up in the morning. That's great. We're out of the lightning round, super job. I got a few more questions. I'll let you get back to selling some life insurance here. But how do you lead at home? Roger, I mean, what do you try to do when you go home? I try to remind myself I am not the CEO of the family. I'm the husband and I'm the father or I'm the son or I'm the brother. So I try very hard to remember that you're not the CEO at home.

48:59My wife reminds me frequently I have opportunities to improve my success factor in that one. What's the biggest thing you've learned from your wife about leadership? Far and away the biggest is the old saying, it's how you make people feel. And a few moments with anybody can make them feel like they've been seen or heard. And everyone wants to be seen and heard. How about your kids? You know, it's interesting. Neither of my kids are in the financial field. and what I've learned, one in particular is a filmmaker, is how much I can learn from him about something I know anything about and that's the creative side.

49:44I'm not an artist. He is and he has something to teach me every day about that. And what's the biggest thing you learned from that? You know, you don't, you may think you know everything or you know a lot and you know thimblefuls of what there is out there to know. So it's very humbling. And what do you see as your unfinished business, Roger? I'll tell you, on the mass mutual side, look, we've had a great run. But the next, I think, five years is going to redefine how this industry looks. This integration of asset management and insurance is entering the endgame. And the consolidation of distribution is the same way.

50:31So I've brought us to the final round of the poker game is the way I think about it. We need to get to the end of the poker game and make sure we're a scale player when the consolidation is all finished. And last question here. What's one piece of advice you'd give to anyone who wants to be a better leader? Absolutely. Just spend time with your people. You have to understand people's hopes, dreams, and fears to be able to help drive them to achieve something bigger than themselves. and there's no way to do it from the outside. You've got to be, as Roosevelt said, you've got to be in the arena and there's nowhere more important to be in the arena with your own people.

51:10I got to ask you before I let you go, you talk about the importance of stories. What do you think is the most, can you tell us the most powerful story you have in your business career? It's the story of how this place started. A 27-year-old who was a Connecticut mutual agent said, gosh darn it, Massachusetts should have a mutual company too. And he raised$100 ,000 from 31 people. He started MassMutual, also became the mayor of Springfield. And that$100 ,000 and 31 people is now$34 billion of capital, a trillion of coverage, and 4 million policyholders. And it just started with someone saying, you know, I can do this.

51:58Why can't I do this? Right. And I just I would love to be kind of cool to go back in time and spend a day with Kyle Bryce and be like, what are we doing? But again, you know, seemed like a normal thing to him. Let's let's just raise some money, start a company. Here we are. 175 years later, one of the biggest in our industry and still headquartered here in Springfield. And you and your people are doing it. So congratulations. And thank you so much, Roger, for being on this show. Appreciate it. Well, thank you very much for having me. It's great talking with you.

52:32I got to tell you, Roger Crandall surprised me a little today. Yeah, he's analytical. And yes, he knows the numbers inside and out. But he also knows that behind every data point is a person, a story, and a purpose. And that's what makes his leadership so compelling. Let me tell you, when you're asking people to work hard or navigate change or rally around a long-term goal, you've got to give them more than data points and KPIs. You've got to give them something bigger, that noble cause that we all need to feel connected to our work. Roger is so good about telling those stories and listening to other stories too, so he never loses sight of what the numbers mean and why they matter.

53:14So here's your challenge this week. Think about a big number you're trying to hit, a revenue or sales goal maybe. Now ask yourself, how can you bring the number to life? Is there a story you can tell, a way to represent it with a little more humanity? That's how you connect with people to that goal in a way that ties into their values or their identity. So do you want to know how leaders lead? What we learned today is that great leaders make the numbers mean something. Coming up next on How Leaders Lead is Tom Hale, CEO of Aura. So be sure you subscribe on your YouTube or wherever you get your podcasts so that you don't miss it.

53:52Thanks again for tuning in to another episode of How Leaders Lead, where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be. Thank you.