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Integrity Handled Crises: Senn Delaney chairman discusses ethic and corporate culture with Investor's Business Daily

Senn Delaney Chairman Dr. Larry Senn was recently interviewed by Investor's Business Daily Columnist Steve Watkins on the importance of integrity and corporate culture.


By Steve Watkins

Operate with integrity, and you'll be able to handle the most difficult situations. That worked for Gary Bhojwani after he took over as chief executive of Minneapolis-based Allianz Life Insurance Co. of North America in January 2007.

• Own up to mistakes. When Bhojwani took the helm, he learned that the Minnesota attorney general had just filed a lawsuit against it. The case centered on claims that Allianz Life had sold products unsuitable for some customers. Bhojwani brought in a third party to determine if his firm was at fault. "If someone was even close to being hurt, we wanted to make it right," he told IBD. "Taking that posture was critical to resolving the case."
  
  
• Don't cave in. Allianz later faced a class-action lawsuit that questioned the language in some of its marketing materials. In that case, Allianz fought back, feeling it did nothing wrong. "We had the courage of our convictions," Bhojwani said. "If we pay out things we shouldn't, it weakens our ability to keep our (financial) promises. If someone has been hurt, we'll make it right. But we're not going to roll over and give away money that isn't ours. It's the policyholders' money."
  
  

His team took the case to trial and to a verdict, rare for the industry. And it won.

•  Make it the foundation. Long Beach, Calif.-based Senn Delaney, a consulting firm that helps companies shape their culture, studied the most successful leaders and found that all had a central set of values. Integrity was core to that. That helps breed trust, says Larry Senn, the firm's chairman. "When you have trust between people, you can work almost anything out," he said. "If you don't, things break down."
  
  
• Make your voice heard. Integrity and accountability mean people point out problems, Senn said: "You might see something (wrong), but unless you do something about it, you're not being accountable."
  
  
• Bite the bullet. Bhojwani suspended all sales of a variable annuity product for six months after the '08-09 market plunge. He wanted to avoid risking the inability to follow through with guaranteed payments. "We shut down one-third of our revenue and didn't fire any people," he said. "We wanted to make sure we didn't weaken the promises we had already made."
  
  
• Win your people's trust. When employees saw that Bhojwani went to great lengths to do the right thing — sometimes at great cost — they responded. The amount of employees who said they're optimistic about the firm's direction jumped from the mid-40% range when he took over to the high-90% range now.
• "It had a profound impact on our people," Bhojwani said.
  
  
• Hold people accountable. That drives results. "It's doing what's right in the broader scheme of things," Senn said. "Accountability is where almost all breakdowns occur. It's a performance value; it's how you make things happen."
  
  
• Open up. If people have hidden agendas, they don't trust each other, Senn said, adding: "Then you lose integrity." He knew one executive who struggled to provide positive feedback. But his people understood once he told them it stemmed from his childhood, when his father was never satisfied with him.
  
  
• Gain from crises. Bhojwani seized the moment when major problems arose. "The best relationships are not characterized by an absence of difficulties; they're characterized by the way you deal with difficulties," he said.
  
  

Issue date: June 25, 2010
Column: IBD's 10 Secrets To Success


© 2010 Investor's Business Daily, Inc. Used with permission.