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Principal Financial Group, Inc. (PFG) Company Profile, News, Rankings | Fortune

legacy

Principal Financial Group

principal financial group

Houston says liquidity and listening to employee concerns has helped Principal weather the crisis so far.

Principal Financial's Dan Houston on biggest risks and predictions for the COVID-19 pandemic

Leadership

Houston reveals what helped Principal weather the crisis.

Principal Financial CEO on pandemic risks and predictions

[ MUSIC ] Dan you know, these days when people talk leadership and in particular business leadership, their expectations have changed a lot in recent years, and dramatically. Whether it's employees, or customers, or even the public. They once CEOs to do more than just make money for their companies. For sure. They want them to do good. Mm- hm. What does that mean to you? Well, I think it starts with legacy. And we're fortunate, we're nearly 140 years old, in 2019 we will be. And we have a long- standing history of giving back to the communities in which we do business. We have a global platform, we do business in 80 countries. And so what we do here in the United States Back into the community are those same things we're doing in India, we're doing it in Chile, we're doing it in Mexico, so that history, that heritage of giving back to the community is part of the DNA of the organization, it's the basic ethos of the company. You mentioned that Principal Financial is coming up on on 140 years and going back over all those years, the company was always focused on helping people with their financial Issues, but I'm wondering for you as the CEO, how are things different today than it was for your predecessors .>> You no longer again have the luxury of having the head of HR send out a memo talking about the good works. I have to live, you're involved in the habitat for humanity and you're helping build, you're helping In the poverty- stricken areas of cities in which we do business, where you're volunteering your time. We provide to our employees eight hours every year of voluntary time off. Whatever they find interesting to them. And the tens, and nearly hundreds of thousands of hours now that are given back to the community. Before, you did it through payroll deduction. Today Payroll deduction, and through your hands, and making sure that the community is benefiting from our involvement in that community. You know we see a lot of CEO's or at least many CEO's who speak up very vocally on a lot of social problems. How much preasure to do you feel to adress social issues? I think it has to be taken seriously because there's some really serious issues. And we talk about it in the board room that these are matters that principal needs to engage. We have committed ourselves to diversity and inclusion not because it became popular in the last ten years, but because its been part of the organization for the last 50 plus years. Including people to be part of diversity is just a standard practice. We have great diversity among our board members, great diversity among our senior management. And we also enjoy that same diversity among our employees. Why, because that's what our customers look like. They, our board our senior management should look like our customer base. Do you feel a lot of pressure that Principle success and it's ability to hire talented people depends a lot on how the company addresses social problems. Millennials increasingly higher percentage of sort of job satisfaction from the environmental issues. What are corporate governances? How do we treat our employees? Are we doing good? For the commune reason what we're doing increasingly they're gonna be the largest percentage of our workforce and so if we're not conscious of that, Paying attention and taking concrete steps to embrace that then we'll find ourselves in a very difficult position to recruit the right talent for the organization So I wanna ask you a question and you fill in the blank I am making the world better because. I'm having a profound impact on the number of people that have retirement savings when they most need it in their old age. [ BLANK_AUDIO ]

Principal Financial CEO: Gain Trust By Giving Back to Community

Dan Houston says companies must give back to the community in which they serve.

Dan, when you were tapped to become CEO of Principle Financial, this is this first time that you've ever held a CEO job. So what have you learned in this past year or so about what it takes to be an effective leader? Communications, you've got to constantly be reminding our employees what our strategy is, what our culture is, living the culture of the organization. Communicating the culture of the organization. Reminding people of what our strategy is. And then of course encouraging them to reach and satisfy the needs of our customers. What is the one leadership skill that you wish you knew when you took the CEO job but you know it now? Yeah, so I really think it's patience. And I'm an impatient person. And you expect people to come along on the voyage with you. And that they're keeping up with you. When in reality, you have to retrace your steps from time to time. Reiterate why we're doing what we're doing, and why it's important. If it's something that's important to me because I think it's important to our customers and to our shareholders, then I have to continue to be patient. And communicate it, and communicate it, and communicate it. I don't know if you've heard this before, but it's been said that a good leader knows how to manage people, but a great leader knows himself. In your experience, have you found that knowing yourself is a precursor to being a great leader? I think keeping your ego in check is always in good order, no matter what you're doing for any company. But I do believe that's part of it. My view is, managers manage a process, leaders lead people. That's how I would distinguish the difference between managers and leaders. What are you doing to groom the next generation of leaders? Collaboration. I really believe you've gotta have a collaborative environment. From my perspective there's nothing more important than culture. What's the DNA of the organization? What's the ethos of the organization? If you don't have collaboration, if you don't have good teaming in today's day and age, if you're not able to work across your business lines and fully leverage the resource of the company You'll be suboptimal, and today you can't be a suboptimally run organization. Mhm, I know you're also trying to create a culture of innovation at Principal, what are you doing on all levels of the company to get all of your employees to take more risks, to try new things, to experiment rather than going The old fashioned comfortable way in playing it safe. I'll give you one example we are in partnership with an organization called Plug and PLay. Plug and Play is an innovation center that is located in Silicon Valley. WE have people Pool that will be working with these very creative entrepreneurs trying to extract some of those great ideas. Partnering with them even though they're not employees but partnering and hearing and understanding and leveraging their thinking and how we can bring that to our customers. So what is your message to your executives and employees on every level about Doing things differently. Yeah, I think it's just that. I think it's having an open mind. The reality is this, if we can have self- driving cars people will figure out much of what we do in principle. So how do we add value to our customers? How do we differentiate our product relative to the competition? And at the end of the day it's getting better outcomes for our customers. Dan you joined Principal right out of college. I did. So you spent your whole career with the company I'm sure you had a lot of mentors along the way. What is the best leadership advice you ever received and why did it stick with you all the years .>> The best piece of advice I got from my Father who got it from my Grandfather. Which is you think you have a big problem, take nine other executives sit around a table. Throw in the worst problem that you think you've got. By the time you hear the other nine, you'll find out that your problem isn't that big. It's good leadership advice for me, because at times you can get a bit of a brain cramp. Or you can get locked into a certain way of thinking, when in reality you know your industry. You know how to solve problems. Figure it out.

Principal Financial Group CEO shares what he learned on the job.

How to Overcome an Impatient State of Mind

What does it take to be a great leader in the 21st century? In a world that is much more global. Mmhm. Where information and innovation is happening so fast. You know leadership used to be about command and control. Certainly you know, my generation, and the generation's before. We would look to the leader, the leader would tell us what to do. We would go back to our cubicle. And we would go do what we were told to do. Today, again it's a different process. First of all, work is done not necessarily by individuals, it's done by teams. And often they're global teams. So understanding different cultures and how to collaborate with different cultures is really important. Secondly, I think today people in the work place want to know how what they do matters to the, to the, to the company that they work for. So they need to put it in a bigger context. They don't just do it because they're told to do it, they do it because they understand what it creates. And that's what motivates them to want to get the result. So again, very important to set a context. For the task that each of your people are doing.

Fortune's Susie Gharib speaks with the CEO of Principal Financial Group on how being a part of the global community has impacted management.

Rethinking leadership in the 21st Century

Principal CEO on being a part of the global community.