Writings
Foreword by Peter M. Senge
Author of The Fifth Discipline and Presence
Excerpt from Character and the Corporation by William J. O’Brien
Betty Sue Flowers, Editor
Not long ago, an executive from one of the largest corporations in the world showed a group of us at a meeting the “corporate values” tee shirt he had recently acquired. On the back were the corporation’s values: integrity, respect, communication, openness. On the front was the corporation’s name: Enron.
The first question many people will have with regard to this book will probably be “Why should I read a book written by a CEO who retired ten years ago?…whom I have never heard of?…whose company I have never heard of?…an insurance company!”
All I can say in response is “What will keep your company from being the next Enron?”
What company today does not have a “values statement”? In how many would the CEO be fired because he or she violates those values? In how many would a front-line person be able to come forward and share with management violations of the company’s values, without potentially putting his or her career at risk? How many companies have worked seriously to build the capacity to confront and learn from gaps between what is espoused and what is practiced? Yet that is exactly what any company serious about values must do. After all, none of us are saints. The real purpose of articulating corporate values is so that we can discover gaps between our values and our actions and learn from them. The fact that so few companies even take such capacity-building seriously suggests that they are more interested in espousing rather than living their values.
This is but one lesson I learned from Bill O’Brien, who over the past twenty years has been and continues to be one of my true mentors. I can honestly say that there is no businessperson from whom I have learned more.
Bill served as architect of one of the most dramatic, sustained corporate revivals I know of, first as Marketing Vice President and then as CEO. In 1970, Hanover Insurance was, for all intents and purposes, bankrupt. In 1990, an independent study by McKinsey of the U.S. property and liability insurance industry placed Hanover in the top quartile of the industry in profitability and growth for the decade of the 1980s. It was the only company that was so ranked which had not been in the top quartile in the 1970s. This dramatic turnaround was accomplished with no major acquisitions to fuel growth, and with what most in the industry would regard as a critical strategic liability, independent agents. In other words, Hanover found a way to generate growth internally and relied on people who were not its employees to sell its product—people who could also sell competitors’ products.
Interestingly, Bill and his predecessor as CEO, Jack Adam, regarded independent agents as an asset rather than a liability. It seemed to them that people who were not your employees had freedom to do what they felt was best, rather than being compromised by what the boss wanted. If you created aims and a way of working that they truly valued, they would volunteer their support and commitment. If you gave them another story that smelled of “corporate BS,” they would defect. Hanover’s structure of independent agents, Adam and O’Brien reasoned, was the perfect setting to see if they could develop a set of guiding ideas and practices that truly treated customers and those who serve customersfairly. Voluntarism for people at the front lines, they believed, was the surest path towardintegrity. So, way before people thought about “network organizations,” “strategic alliances,” and other voluntary affiliations to grow enterprises, O’Brien and Hanover were creating them.