Page 52 - Executive Warfare

EXECUTIVE W ARF ARE

people or had ignored the warning signs because the pressure to generate
new revenue was so great.
At John Hancock, we worked hard to unravel this mess and made sure
that it stopped. By the time the heavy-weight class-action lawyers began
circling overhead and suing John Hancock and its competitors for astro-
nomical sums, we were somewhat ahead of the game.
Nonetheless, there was a substantial cadre of lawyers, both Hancock
lawyers and the company’s outside lawyers, who wanted us to fight. It was
all about minimizing the financial damage. Plus, there was a certain macho
appeal to fighting, and litigators like to litigate.
I remember one meeting very distinctly: One guy was saying,“This law-
suit is going to drag out three to four years, and the burden of proof is
going to fall on the customers, individ-
ual by individual. If we fight, we might
“ISN’T IT BETTER be able to settle this down the road for
FOR US TO FESS just 20 or 30 cents on the dollar.”
UP? DIDN’T WE ALL Here was my response: “You are
LEARN THIS IN crazy. First of all, we did this. Second,
SECOND GRADE?” our business stands for, ‘When you die,
WITH THAT SPEECH, we take care of your loved ones.’ It does
I HAD JUST TAKEN not stand for, ‘When you die after hav-
THE BIGGEST RISK ing paid us three times more than you
OF MY CAREER. were supposed to, we take care of your
loved ones.’ Even if we could settle the
class-action suit for 30 cents on a dollar,
how much damage would our brand take, and how much would sales
drop in the future? Isn’t it better for us to fess up? Didn’t we all learn this
in second grade?”
With that speech, I had just taken the biggest risk of my career. And
made many, many people unhappy.
I was inviting umpteen regulators to take a look at us, since we were
regulated state by state, and assuring that we would have a lot of contact

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