Be a Lighthouse
I felt as if I were walking with destiny and that all my past life had been but a preparation for this hour and for this trial.
—WINSTON CHURCHILL
On the roof of our country house up here in Clermont, we’ve got a cupola with a big rooster weathervane jutting up on top. When the wind blows, that thing spins around like crazy. On the coast, not too far from where we live, there’s an old lighthouse. When the wind blows, that lighthouse doesn’t budge. It just sits there like the rock it’s built into.
Weathervane. Lighthouse. I’ve made it my business to know which is which, and to never forget the difference, not even for a day.
Most “leaders” are weathervanes. Whichever way the wind blows, that’s the way they turn. That just doesn’t work. If you want to accomplish something great, something real and effective, you’ve got to be that lighthouse. You’ve got to be embedded in the rock. When times are hard and things get ugly, you’ve got to be that person others look to and see only strength. The one people look to and know they don’t have to wonder where you stand.
I believe one of our country’s deepest problems is that we have a lot of leaders who change their minds like they change their underwear. Change jobs, change marriages, change friends, change convictions. The problem with the “If it isn’t perfect today, I’m gone” attitude is that you never have the chance to apply your efforts and give them the time they need to compound. Greatness doesn’t happen in a day, or a week. It’s the result of growth and maturation, and that can only happen over the course of time and committed constancy.
I’ve seen companies where the leadership was so volatile, people would arrive to work in the morning and say, “What kind of mood is he in today?” That’s a company that has to fight just to stay standing, even when there aren’t big challenges coming from the outside. I’ve seen it happen, many times, and it’s incredibly destructive to the organization.
If you’re a leader, you can’t afford the indulgence of having moods.
You can see this sometimes just walking into a store or restaurant. The employees are edgy, irritable, sullen, or tentative. When you see that, I guarantee there’s a manager, owner, or someone else they’re all looking up to, who is throwing them all off kilter with his or her moods.
We all have our good days and bad days. I understand that. It happens to me too. We may have challenges in our personal lives. Something’s happening at home, our child has a problem in school, something upsetting is happening in our neighborhood, we’ve got an especially troubling hangnail. Whatever. Let me tell you a hard truth. It doesn’t matter. If you’re a leader, you can’t afford the indulgence of having moods. You’ve got to be the one who, when people come to work in the morning, they already know exactly where you stand. You have to be the one they can count on. You have to be their rock.
By the summer of 2007, my ability to serve as a lighthouse for our company had been tested for years. Before long it would be under full-out assault.
In August of 2007, we held our most amazing convention to date, packing the Georgia Dome to near-capacity with some 35,000 people. It was an electric, magical moment, both for the company and for me. The company was turning 30 (“Year Thirty” was a big theme at that convention) and, as it happened, I had just turned 50.
Great things were happening at Primerica. Rick and I had had a tremendous run for the past seven years. When we first took over in 2000, the company was paying out a little more than $400 million in compensation to reps. By 2006, compensation to reps had grown to $631 million. In mid-2007, it was approaching $700 million. In all my speeches at the time, the big goal was to hit $1 billion in annual compensation by the year 2010. Compared to the struggles of the nineties, it was like we were in a perfect little world, almost like a fairy tale.
At this convention we recognized Bob Safford, that wonderful field leader who’d been so encouraging to me that day back in those difficult times in the early nineties when I gave my first real motivational talk to a hotel room full of leaders. We recognized him because his personal income had hit the $4 million mark. I don’t mean cumulative: that’s $4 million over a single 12-month period. We also recognized Mike Sharpe, who had hit $5 million. From the field’s perspective, things had never been better. Cash to the field was at record levels. So were growth in recruiting and growth in sales. Citigroup stock, which many of our field and home office leaders were heavily invested in, was doing great. And having the prestigious name Citigroup associated with their business was a huge positive.
As we celebrated our thirtieth year and made bold pronouncements for the future, we introduced some new features in the business, for example, a lower-cost ($99) licensing fee, making the business more accessible to more people, along with significant product improvements, which were a huge hit. I’ve been to a lot of events at the Georgia Dome, and I’d never seen or felt a higher energy level. I thought the roof might come off.
To the casual observer, it would have seemed like things were rock-solid and invincibly healthy in the world of Primerica. Indeed everything looked just about as rosy as it possibly could, even to 99.9 percent of the people within the world of Primerica.
But it wasn’t.
The truth was that we were suffocating under an increasingly oppressive blanket of regulation and bank bureaucracy that was threatening to strangle us. Although hardly a soul in that stadium knew it at the time, and wouldn’t know it for years yet to come, Rick and I had been working for months in a confidential and excruciatingly complicated effort to get Primerica completely out from under the Citigroup umbrella, before it snuffed the life out of us.
You’ve heard the expression, “It’s always darkest before the dawn.” True enough, but there’s another truth too. Sometimes it’s brightest before the storm. And when the storm comes, you can’t let it catch you off guard. As important as it is to stay positive, don’t ever confuse optimism with naïveté. Be prepared. Know exactly where you stand because it could be sorely challenged by high winds at any time.
Have you ever seen one of those beautiful, balmy afternoons where the sun is shining and everything is peaceful, and then out of nowhere the wind suddenly picks up and clouds appear, and moments later you’re in the midst of a full-blown thunderstorm? That’s where we were in the sunny days of August 2007.
When Rick and I first took over as co-CEOs in 2000, the situation couldn’t have been better. Even though we were technically a division of Citigroup, we operated with a good deal of autonomy. Sandy Weill, Marge Magner, Bob Lipp, and the other people up in New York knew the two of us well. They respected and trusted us. Besides, they were so caught up in all the issues involved with the integration of Citibank and Travelers. They were up to their elbows in alligators and just as happy not to have our “little” (relative to Citigroup, anyway) Atlanta company take up too much of their attention. We would go up to Manhattan once a quarter and do a review of our numbers with them. Other than that, they pretty much left us alone to run things the way we wanted.
In the years since 9/11, the business environment around us had changed. Within months after the towers had come down, the nation was watching Kenneth Lay being led away in handcuffs on CNN. The collapse of Enron redefined the dimensions of corporate catastrophe, which would soon be eclipsed by the WorldCom bankruptcy. In the summer of 2002, Sarbanes-Oxley was passed. It was a whole new regulatory climate, and as part of Citigroup we found ourselves right smack in the middle of it all.
Sandy had operated each of his divisions as a standalone business, which I believe was a very good strategy. His business model was heavily focused on acquisition. The basic playbook went like this: Acquire a good brand that’s having some challenges, straighten up the balance sheet, integrate it, and take the profits to the bottom line. He and his team had built a gigantic company doing exactly that. They were masters at it.
Now, that all changed. Citigroup had grown so huge that every regulator had them in their bull’s-eye. Suddenly the regulators were telling Citigroup they couldn’t do any more acquisitions until they consolidated the way they ran things. They had to put all their businesses onto common platforms—compliance, operations, financials, legal, and so on. Citigroup was moving all their IT to India, all their phone support to South Dakota, and in general dismantling individual business units and folding things into different pieces of Citigroup. Most of these businesses were banks and investment banking businesses, and this homogenizing process worked fine for them.
For us, it would have been deadly.
None of this stuff related to us. We weren’t a bank. Operating under the Primerica name and all the growth and change we’d gone through over the years, we were still essentially A.L. Williams. Rick and I both knew that if we let them start disassembling Primerica and feeding off bits and pieces of it into some larger bureaucracy, we’d be letting them destroy it. Primerica, as we knew it, would never survive the dismemberment.
For example, at one point the directive came down that Citigroup was going to have their bank auditors audit local offices of our sales force. This would have been a disaster. These were small offices, rented and run by individual agents across the country. Admittedly, Primerica was not something people could run out of their living rooms or home offices. If you’re selling financial services, you need to have a real office where you hang out your shingle and the public has access. But still, these weren’t big commercial offices with staffs of dozens. They didn’t have vaults. Having a bank auditor come in, someone who expected to find them functioning like the corporate offices of a big bank, would have made no sense at all.
In our business, you have to have a customized support system. Of the close to 2,000 employees we had in Duluth, 100 percent of them were focused on the care and feeding of our sales force. That was it. It wasn’t like there was anyone working on some other channel. And it has to be that way when you’re selling financial products through part-time people. You can’t just go hire XYZ insurance company that’s used to dealing with full-time independent agents. Our system won’t work that way.
Of course, these offices had to be audited. But we had our own auditors, people who knew our business, knew our people, knew how our operation worked, that our people were independent contractors and so forth. They knew how to do their job within the framework of our business. This directive would have replaced them with some anonymous auditors who’d have no idea what our business model was.
We spent six months fighting that battle, and that was just one of many.
By 2005, things had changed dramatically. Sandy had left in 2003. Marge Magner, Bob Lipp, and more or less all the other executives whom we had worked with closely over the years were now gone. Rick and I were spending all our time flying up to New York, dealing with people we hardly knew and who hardly knew us, to get an exception from some new Citigroup policy designed to make the federal regulators happy.
The only way we were able to survive was because of our relationship with Chuck Prince, who had replaced Sandy as CEO.
I’d known Chuck well for years. He’d been with Sandy since the early days and had served as general counsel of Travelers Group back in the nineties, when I was president. Rick and I would go through all these back-and-forths with people in the executive hierarchy, and then eventually when we reached an impasse, I would call Chuck. Fortunately, because of that connection, we were able to prevail in every instance where it really mattered.
Still, it was a constant strain. While we had a great connection with Chuck, our relationships with the rest of the executives were, to put it kindly, growing frayed. One Citi executive said we were being “obstructionist,” “unwilling to try new things,” and told Rick that Primerica was “a subpar business” and “not up to Citigroup standards.” One day in a meeting this same gentleman said, “John, you guys need to get your business on the Citi superhighway.”
“Look,” I replied. “We’re an off-road vehicle. They don’t do that well on highways.”
He didn’t think that was very funny. It wasn’t supposed to be funny. It was true. We didn’t fit into the Citi picture anymore, and this wasn’t just a matter of culture clash. We represented fundamentally incompatible business models, and their model, while it was working for them, would kill us if this went on much longer. We were not a big bank with all the accompanying issues they were struggling with.
Toward the end of 2005 (a few months before my stroke), I called Chuck and said, “Chuck, this isn’t working. We’ve got to talk.” He came down to Duluth right around the end of December that year with a bunch of his new senior management team, and Rick and I did a whole presentation for them on Primerica.
At the end of the meeting, Chuck said to his team, “Guys, I love this company. These are good people. They do a good thing. We’ve got to figure out how to allow them to operate within the Citi world without so many restrictions on their style.” It was like we had a group hug, shared mugs of hot chocolate, and sat around singing Kumbaya. I still refer to this today as “our Kumbaya meeting.” Things got a little better for a little while. Sort of. But not really.
The thing about a big bureaucracy is that just saying something doesn’t change anything. We were dealing with armies of auditors, lawyers, and bureaucrats, to say nothing of regulators. By the time I was sitting in Dr. Yepes’s office at Emory hearing him do his best to explain why my stroke hadn’t completely disabled me, it was clear that no amount of talk or meetings was going to change the situation at Primerica. We just didn’t fit into the Citi environment anymore. It was killing us, and putting at risk the financial futures of thousands of people who didn’t even know any of this was going on.
Throughout 2006, while I was recovering from the stroke, Rick and I talked the situation over. We both knew we were at a crossroads. Something had to change, or else our business would asphyxiate. We either had to find a way to get Primerica out of Citi, or something really bad was going to happen to our company. And if the two of us didn’t do it now, nobody ever would. They’re four of the scariest words in the English language: It’s up to you.
It was time to force a decision.
I love the word decide. Here are a few others words that end with the same last four letters: homicide, suicide, patricide, fratricide. Here’s what those words all have in common: Somebody dies. To me, that’s what the word decide means: the death of all other options.
That’s what Rick and I had to do now. It was time to choose a path and kill off all other options.
As I said, I’ve never been one to write out big ambitious life goals or blueprints. I don’t pretend to know what’s going to happen 20 or 30 years from now. I just do my best to keep myself focused on the next thing that needs to happen. At that point, there was one thing that had to happen. We had to get out of Citi. Had to.
From then on, this single goal would absorb every moment of our time and every ounce of our strength. And it was a good thing it did, because it would take that kind of single-minded focus if we were to have any hope at all of surviving the coming storm.
On September 20, 2006, I flew to New York and had a meeting with Chuck, just the two of us. It was now seven months since that stroke on an Oahu golf course nearly ended my life (or, at least, my life as I had been living it) and set me to deliberating the question of whether to resign or keep going. I’d decided to keep going, and I meant to see this thing through—and see it through right.
“Chuck,” I said. “You know and I know that Primerica just doesn’t fit in Citibank anymore. The world is changing, and we don’t belong here. As I see it, we’ve got an Option A and an Option B. We can find a way to get us out of Citibank in a positive way, while Rick and I are still around to do it and there’s still someone here running the show who we know, someone who knows that our motives are good and that we’re not just some yo-yo executives trying to hijack their company. In other words, Chuck, while you’re still here.
“On the other hand,” I said. “I can understand that you might not want to do that. In which case we go to Option B, which is to figure out how I retire. Spending all my time fighting with people over how to run this company is not how I want to live my life.
“One way or the other, I’ve got to leave Citi. I’d like to leave with Primerica, but if that’s not possible, I need to negotiate my retirement package.”
I had a pretty good sense that he would want me to stay and work on something. At this point, Rick and I had racked up a heck of a performance record. We had managed an excellent relationship with regulators and significantly added to our compliance and control functions. At the same time, we had grown the sales force by 30 percent, boosted insurance sales from 290,000 to 400,000 policies sold (for the first time since 1990), doubled SmartLoans, and grown our investment business. I don’t think Chuck gave Option B a second’s worth of serious thought. He went right to Option A.
“So,” he asked, “Do you and Rick have any ideas on how we would structure a transaction that would work for all parties?”
“Yeah,” I said. “We do.”
We got Rick on the phone. Rick had all the numbers and all the logistics worked out (of course), and we walked through it all right then and there. Chuck said he would put us together with Citi’s mergers and acquisitions team to start the complicated process of preparing to launch Primerica on its own with an initial public offering (IPO).
Ever since, Chuck has referred to that day as our “Moses meeting,” because what I was really saying was, “Chuck, let my people go.” And he knew me well enough by now to know that if I said we needed to get Primerica out of Citi, I was prepared to do whatever it took to see that goal accomplished. I am an amiable guy, but when I get set on something, I can turn into an immovable object.
After that meeting Rick and I started working with Chuck’s mergers and acquisitions team. Neither of us had ever been involved in setting up an IPO before. It’s a huge undertaking, incredibly complicated and enormously time-consuming, but we were committed to getting it done, no matter what that involved.
Ironically, our success was part of the challenge. By this time, the big New York banks were having serious issues with their capital ratios. Our business, that is, Primerica itself, was quite capital-rich. We had almost $4 billion in excess capital on the books. Extracting us from the larger company wouldn’t be easy.
We worked on this project straight through into the early months of 2007. And man, I don’t think either Rick or I had ever worked harder in our lives.
In the spring of 2007, we had to hit the brakes.
As we were in the midst of working on the IPO, Rick and I got a call from Chuck. “Guys,” he said, “we have to put this on hold for a few months.” He told us they were working on an acquisition of a major brokerage company, Nikko Securities, out of Japan. It was a complicated deal, so our project would have to be back-burnered, but just for the moment. He assured us that when fall came, we would get it all back on track again.
That August, Chuck came down to Atlanta and spoke at that thirtieth-anniversary convention. He told the sales force how much he loved our company, how much he loved Rick and me, and that making sure Primerica was protected would always be foremost in his mind.
“Citi will do the right thing by Primerica,” he said from the stage, and tens of thousands of Primerica reps applauded like crazy. Among the 35,000 people packed into that stadium, there were only a handful who knew just how much those few words really meant to us at the time, how many battles Rick and I had fought behind closed doors, and how much we had relied on Chuck to help us weather every one of those storms.
But nobody, not even Rick and I, knew the extent of the typhoon-force winds that were on their way.
On October 29, 1941, Churchill paid a visit to the Harrow School in London, which he had attended as a boy. He had at this point been prime minister for nearly a year and a half, and his country was steeped in the horrors of war. Pearl Harbor hadn’t happened yet, and the United States was still a neutral force. It was a dire time indeed. During that visit the prime minister made an impromptu speech to the students, which included perhaps his best-known line:
“Never give in, never give in, never, never, never—in nothing, great or small, large or petty—never give in except to convictions of honor and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.”
As I look at the world today, I see so many leaders, whether in the corporate world or political world, who want to be a lighthouse when the weather’s fine and things are going great, but who suddenly turn back into weathervanes the moment things get bad, pivoting to follow whichever way the wind blows. Whether it’s a politician following the polls or a businessperson following the trends, they let the extraordinary stress of stormy circumstances determine what their actions are going to be, rather than letting their actions be determined by what is the right thing to do.
That isn’t how leadership works—at least, not real leadership. Extraordinary circumstances are exactly when rock-solid consistency matters most.
Nobody needs a lighthouse when it’s bright and sunny out. A lighthouse is there to illuminate the course when darkness threatens to prevail. Without the lighthouse, nobody could see where to go. That’s what leaders do. They make the course clear to everyone. Leaders aren’t there to give orders or boss people around. Anyone can give directions and tell other people what to do. A leader’s function is to illuminate the way when it’s dark and dangerous out there.
Extraordinary circumstances are exactly when rock-solid consistency matters most.
And not just the ordinary dark. Lighthouses exist for storms. That’s why they’re built in the first place: to keep ships from crashing when the weather whips itself into a fury. When there’s chaos and trouble. On a beautiful, clear day, when everything is sunny and easy, a lighthouse just stands there looking picturesque. That’s great for paintings and postcards. But lighthouses aren’t built for calm seas and calm weather. They’re there for dangerous and difficult times. That’s when they become indispensable because, in those times, without the lighthouse, the organization wouldn’t survive the rocks.
It’s easy to be positive when everything’s great. That’s not leadership. Anyone can do that. It’s when you’re facing tremendous adversity that it’s tough to stay focused and clear, yet that is exactly when it’s most required, as Rick and I were about to learn.
Chuck was true to his word. When September arrived, he got our project to launch Primerica out of Citigroup cranked up and on the road again. Unfortunately, the timing could not have been worse. Things were starting to go sour in the banking industry, and Citigroup was not doing at all well. Back in April 2007, Citigroup had to cut some 17,000 jobs, letting go about 5 percent of the corporation’s workforce. By the fall, the company’s stock was slipping badly.
Everything came to a head on Halloween.
An Oppenheimer analyst, named Meredith Whitney, issued a report on October 31 declaring that Citibank was badly undercapitalized and in a precarious position because of the bad mortgage-backed securities on its books. That report made Whitney’s reputation. She went from being just another barely known voice in an ocean of financial commentary to being a name and a face. The following year she was featured on the cover of Fortune, and CNBC named her Power Player of the Year.
It also unmade Citibank’s reputation. As Bloomberg put it, “The report hit the stock market with the force of a freight train slamming into a brick wall.” The day after the report appeared, Thursday, November 1, the company’s stock plunged. I was watching CNBC that morning and everything was “Citi, Citi, Citi, disaster, disaster, disaster.” Rick and I were scheduled to fly to New York that Sunday evening for a meeting with Chuck and his team the next day on the final stages of filing our Form S-1, our official statement of intent to go public. I sent Chuck a quick text: “Are we still on for Monday?”
His text came back: “If I’m still here.”
When Monday came, Chuck was gone.
Our principal ally at Citigroup, the one man with whom Rick and I had been able to maintain a strong connection that went back years, the one man who in many ways represented our best hope at finding a solution to our dilemma and a path out of Citi, was out of the picture in the blink of an eye.
What could we do? We could persevere.
We set up a meeting as soon as possible with Gary Crittenden, Citigroup’s new CFO. Gary is a very thoughtful, decent guy, and quite brilliant. Despite the fact that Gary was relatively new on the scene, he was the only person we could meet with whom we actually knew.
Citi was in chaos, understandably. It took a few weeks for us to get onto Gary’s calendar. For those few weeks, Rick and I were on pins and needles.
When we finally got in to see Gary, we had a presentation prepared, detailing the critical importance of continuing down the path of our IPO. “Gary,” we concluded, “we’ve got to get this done. We know things are rough right now at Citi, but we have to make this happen.”
He told us he would think it all over and meet with us again soon, which, being a man of his word, he did. We met again a week or two later. He told us it just wasn’t going to fly.
“Gentlemen,” said Gary. “I’m sorry, but we can’t. I completely understand your issues. I get what’s going on. But we have huge balance sheet problems right now and with our capital constraints, we can’t do an IPO.”
It was a real pit-in-your-stomach moment if there ever was one. Fortunately, he wasn’t finished yet.
“I’ll tell you what, though” he continued. “If you’ll work with us on it, help us come up with the right structure and find the right buyer, we could possibly sell the company.”
Now, we had a whole new conversation.
At this point, the first thing Rick and I had to do was to negotiate a retention agreement for the two of us. Part of the purpose of a retention agreement like this is to answer the question, when you’re the CEO and your owners sell the company you’re running, what happens to you? You need to have some compensation lined up so the deal makes sense for you.
The truth was, though, we weren’t so worried about that part of it. We knew that whatever deal they proposed would be reasonable in that regard. We had a more important agenda regarding how this agreement was worded. We knew that we would be taken care of. We needed to be able to ensure that the company would be taken care of.
The only way we would give a thumbs-up to selling the company was if we had a seat at the table. We wanted right of refusal so that, as we explored the range of potential buyers, Rick and I had the power to say, “No, that one’s not acceptable.”
We got the agreement worked out. Now, we were on to putting together the nuts and bolts of a deal.
All that spring, we worked with a team of investment bankers on the structure of a possible transaction, compiled our list of potential buyers, and began contacting them. By summer, we had filed an offering memorandum and were ready to go.
Citi had rented us the top two floors of one of the most beautiful buildings in Atlanta. We turned them into a Primerica showroom with big displays showing the history of the company, videos playing everywhere, and all kinds of impressive stuff. It was like a luxury auto showroom, only times a hundred. We had a meeting room outfitted with the best audiovisual set-up for our presentations.
That summer, along with Alison Rand, our CFO, general counsel Peter Schneider, and Glenn Williams, our president, Rick and I did presentation after presentation after presentation—to private equity buyers, other insurance companies, anyone who might conceivably be a player in this transaction.
Every big insurance company showed up. There were some huge companies, including all the giants, whom we knew would never work out. We knew that if we stood up on stage and told our sales force, “Hey, guess what, guys, we’ve been bought by XYZ Gigantic Life,” our people would go off the rails. So there were a few companies we didn’t even consider. Even so, there were a lot of potential buyers.
Meanwhile this was all completely under wraps. Not only did nobody in the field have any idea this was happening, but 99 percent of our employees were also kept in the dark. It had to be that way, both because of insider information constraints and also to not create a panic for the employees at the home office.
Finally, it all came down to two potential buyers.
I’ll call the first one Company A. Rick and I thought these guys were strong contenders. We felt confident that they would be a good fit with our people culturally. They were roughly the same size and earnings as us, so it would be more of a merger than a true acquisition. It seemed like it would be a compatible transaction. Even though they would need a lot of financing from private equity firms and other sources to make the deal happen, we thought it would work.
The other potential buyer, whom I’ll call Company B, was a large insurance operation that Citi preferred because they had the financial capability to do the transaction themselves. Basically, they could write a check. But Rick and I felt they would not be nearly as good a fit for the field as Company A. If we went in that direction, it could be the culture wars all over again.
Citi worked hard to convince us to go with Company B. We were under a fair amount of pressure to get on board with this plan. Finally, after we’d been in this process for a while, they held a dinner for us in New York with the executives from that company, followed by an evening of presentations that showed us in detail how great things were going to be. The event was carefully designed to bring Rick and me to the finish line and close the deal. They pulled out all the stops. One part of their presentation illustrated clearly just how much money Rick and I were going to get out of the transaction when the deal was done. If we went with this plan, by the time we had fully transitioned the company over to its new owners, the two of us would be very wealthy individuals. It was all extremely persuasive.
But there was a problem. No matter how well positioned they were, how great the balance sheet looked, Rick and I just didn’t think the company would be as good a fit. Having a replay of the kind of cultural disharmony we had suffered back in the early nineties would have been challenging enough. I was worried about an outcome far worse than that. Company B had a big operation out in the Midwest. Once we did the deal, would they start laying off our nearly 2,000 people in Duluth and folding their jobs into the new company’s existing operation? I feared the answer was yes. So, Rick and I were going to make a lot of money, and all our old friends and employees were going to end up on the street looking for jobs? Was that how this whole saga was going to end?
At one point during this elaborate dinner meeting, Rick turned to me and said, “John, you call the ball. You’re the one who knows if this is going to work for the field or not. It’s your call.”
I thought about my dad.
When my father was in his fifties he was a top executive at Fabrics America, formerly the Fulton Bag and Cotton Mill. This was at a time when textile manufacturing all started going overseas and the company started coming under siege. For a good ten years, he fought the good fight, trying everything he could to keep that company afloat and save the livelihoods of all those people he had known for so many years. He never gave in, and he never gave up, not for an instant. In the end, though, it was an unwinnable battle. The company was finally shuttered in 1978. In the late nineties the mill was turned into a loft apartment complex.
After the company closed down, my dad busied himself with a lot of different things. He drove a school bus for a while and then went back to work at the labor department, where he had worked earlier. He and Mom knew they were going to be okay. They’d always been able to save money. For them, it wasn’t a complete catastrophe. But there were an awful lot of people who’d worked at Fulton for years, as long as he had, who had it a lot harder. He felt responsible for them. He never spoke about it, but I knew it ate at him.
I was in college when the worst of it was happening, so I was not attuned to the situation enough to appreciate fully what he was going through. At the time, I was more concerned with where the party was that weekend. But I could see the toll it took on him. He felt responsible to the people who worked there and did everything he could to try to save those jobs. In that, he ultimately was not successful. There were big economic and demographic forces at work that were simply beyond any one man’s control.
Was that where Rick and I were now?
Were the economic currents that drove this multinational, multibillion-dollar giant—by this time the largest company in the world—forces that were simply beyond our control? I didn’t know, but I sure was going to do everything I humanly could to find out.
You have to be the thing that doesn’t change, the thing people count on. You have to be the lighthouse built on a foundation of rock.
It was now nearly two years since that “Moses meeting” with Chuck Prince, the meeting that started the process of trying to extract Primerica from its untenable position as part of Citi. During those two years, everything had changed. The financial and regulatory world had changed. The makeup of our parent company had changed the person to whom we reported several times over. Everything about our situation was in constant flux. It was like trying to build a house on a foundation that sat on roller skates.
Here’s what I learned during those two years:
Situations are going to change. You better be fluid enough to change with them, but you need to keep your mission and purpose constant. You can’t count on anything because everything can change and probably will change. You have to be the thing that doesn’t change, the thing people count on. You have to be the lighthouse built on a foundation of rock.
When the river branches, the best thing you can do is take the fork that looks like the right one. And this wasn’t it.
It was a good thing we had negotiated that contract clause that gave Rick and me veto power. This was the time to exercise that power.
“Guys,” I said to our hosts at the end of the evening. “I’m sorry, but we can’t do this. No deal.”
Citigroup was very upset with me, understandably so from their perspective. But they knew that without Rick and me, there was no transaction. Eventually, in the course of further discussions, they ended up conceding the point and agreeing with Rick and me. Working out a deal with Company A really was the wiser path.
That sure didn’t mean it was easier, quite the opposite. From the standpoint of financing, the deal with Company A was far more complicated and involved a handful of different private equity firms. It’s the kind of deal that can go wrong a thousand ways unless it’s structured very carefully and with a good deal of expertise. It took time, but by the end of the summer of 2008, we were ready to go. As part of the deal, Rick and I and Company A’s CEO were creating a three-person Office of the Chairman and would continue to run the two companies essentially as two completely separate businesses.
After all the months of struggle and pressure, things had finally come together. In fact, we couldn’t have asked for a more perfect situation.
The Company A people flew their jet over, picked up Rick and me, and flew us back to their headquarters to negotiate our personal contracts. We all shook hands on the deal. The mood was extremely upbeat. Grand toasts and bottles of champagne were involved. I was elated.
We were flying down to Charleston that weekend with a bunch of friends to celebrate Loveanne’s birthday. As I sat on that jet, cocktail in hand, I thought, Isn’t life awesome! I had started out in this company at $19,200 a year. Now, a quarter of a century later, I was about to be a part of a gigantic and successful merger. Not bad for a kid from Salem, Georgia.
I was so glad I hadn’t stepped down in 2006 after my stroke. The last two years of stress, constant travel, and intense negotiation had all been worth it. Yes, I’d lost a lot of money as Citigroup stock declined. But we now had a deal on the table that was going to net me a great deal of money, enough to guarantee my and Loveanne’s future, a future even more solid than I would have had if I’d retired two years earlier. What’s more, we had secured a bright future for everyone at Primerica. Rick and I had won, and we had won. All of us, all our friends, all of Primerica had won. It was the best of both worlds. It was a genuine triumph.
It was September 12, 2008.
When I landed in Charleston a few hours later, I saw the news: Lehmann Brothers was in trouble. Serious trouble.
The early tremors of a coming earthquake shook all that weekend. The following Monday, September 15, 2008, Lehmann filed for bankruptcy. The biggest financial collapse of our lifetime was under way.
It didn’t take more than a few phone calls to confirm the worst. All that private-equity financing that we had so painstakingly lined up to finance the merger had evaporated. The whole thing had unraveled. It was over.
Within those three days, our whole deal had dried up and blown away like so much dust in the wind.
What now? Were all those long months and years of negotiation for naught? Rick and I had never stopped standing firm as a lighthouse, not for a moment. But had the waves finally become just too great for the company to keep from being smashed onto the rocks?
Be a Lighthouse
Most leaders are weathervanes. Whichever way the wind blows, that’s the way they point. If you want to accomplish something great, something real, then you’ve got to be a lighthouse, solid, immovable, embedded in rock.
Be the person everyone else counts on to stand firm when it matters most. If you’re a leader, you can’t afford the indulgence of having moods. You’ve got to be the one who, when people come to work in the morning, they already know exactly where you stand. You have to be their rock.
It’s a leader’s job to make decisions. To decide means the death of all other options.
Lighthouses are there for dark times. Anyone can be positive and decisive when times are sunny and everything is going great. It’s a leader’s job to illuminate the course when it’s dark and dangerous out there, when there’s chaos and trouble.
Situations are always going to change. You have to be fluid enough to change with them. But even within the current of constant flux, you have to keep your mission and purpose constant. You have to be the thing that doesn’t change, the thing people count on. You have to be the lighthouse built on a foundation of rock.
ACTION STEP
In your present work situation, what do you stand for? Write a list of those bedrock principles on which you cannot change your position, no matter what.