'CEO Exchange' puts leadership center stage

Allstate, Motorola execs come together for insightful evening as PBS tapes popular business program

By Ed Finkel

On stage at Northwestern University's Cahn Auditorium with leaders of The Allstate Corp. and Motorola Inc. for the March 1 taping of the PBS show "CEO Exchange," host Jeff Greenfield asked a question that seemed designed to cross some wires: What do you think about the use of cell phones while driving?

Neither Edward M. Liddy, chairman, president and CEO of Allstate, nor Edward J. Zander, chairman and CEO of Motorola, gave a predictable answer.

Liddy said there's no clear evidence that such behavior increases accidents and he compared using the phone while mobile to changing a CD or combing one's hair in traffic. Zander allowed that cell phones in public places sometimes annoy him. "We've got to watch the social interaction of this technology," he said. "When I go to a restaurant or a movie, I want to enjoy myself."

Audience members interspersed questions during the event, which was sponsored by the Kellogg School. First-year Kellogg student Maya Prasad Clem asked Liddy how he sees the vast amount of available information about people's habits affecting underwriting decisions.

"There comes a point where you're infringing on people's privacy," he said. "The industry's got to tread into those waters carefully."

Zander hopes data gathering can prove helpful by, for example, giving Allstate adjusters the ability to locate an accident scene more quickly. "I want to turn this into a net-plus," he said.

Greenfield noted that both CEOs were outsiders who had to revive sluggish corporations and asked how they won employee support. Zander said he participated in many town hall meetings with employees and met with customers.

"I tell them right up front, 'Ask me anything you want to talk about,'" he said, adding that early meetings were "sterile" and that some employees are "still afraid of retribution" but this situation has improved. "You can't underestimate communication," he said.

Liddy, who led Allstate through its divestiture from Sears, Roebuck & Co. and spun off agents as independent contractors, said winning full support has been a challenge.

"There are some things in life you are always striving to attain," he said. "Those who wanted to grow and mature into that [independent] role have done fabulously well."

To cultivate an atmosphere of innovation, both CEOs said they never become complacent, although they don't embrace change merely for its own sake. Liddy, for instance, does not intend to alter Allstate's "Good Hands" slogan and iconography any time soon.

"It's such an advantage to us. We don't toy with it too much," he said. Nevertheless, he noted the importance of being prepared to adapt if the market demands it. "You have to let people know the status quo may be wonderful, but it ensures you of nothing tomorrow."

"I like playing offense. I like setting the agenda," Zander said. "It's a challenge because you get this comfortable feeling, when things are going well, that RAZR [cell phones] will be around forever or cellular technology will be around forever."

Second-year Kellogg student Angela Chou asked how expectations of the executives' performance had changed since they became CEOs. Both alluded to the broadening notion of stakeholders, with the community at large now playing an important role alongside shareholders, employees and customers.

Zander cited Sarbanes-Oxley legislation as one driver of this expansive trend. "You have to be a little more enlightened and balance all that," Liddy agreed. "The role has become much more multifaceted."

Another challenge for Liddy has been the aftermath of Hurricane Katrina, which rocked the insurance industry. He said events of that magnitude always will require significant federal government assistance. (See page 58 for more on this subject from Allstate President and COO Thomas Wilson '80.)

"We could [now] be in a period of [events like] Katrina not being exceptional," he said. "Let's do what America does best and get ready for it now."