John Hoffman, regional managing director, Principal Financial Group
Regional Managing Director John Hoffman and Principal Financial Group’s Minnesota Business Center have won the company’s top field management award in 2016 for a second consecutive year, thanks largely to a new leadership model Hoffman instituted.
Efficiency, productivity and staff retention all have improved under the more flexible, horizontal leadership structure, Hoffman said. “We just figured disjointed leadership teams with individual goals and objectives was a way of the past,” Hoffman said.
Hoffman, who joined Principal in 2000 and has been regional managing director since 2009, took some inspiration for the change from former GE CEO Jack Welch, who advocated a “boundary-less organization.”
The new model did away with individual incentives. “We’re all going to win or none of us will,” Hoffman said. “If everybody’s going to achieve a bonus that’s going to dilute a little bit of the bonus at the top. I believed that if you take a couple of steps backward on this we can take giant leaps forward.”
Two other Principal groups are adopting the model, and Hoffman expects it to spread across the Iowa-based company, which offers retirement, insurance and asset management services.
“I believe those offices will thrive, they will be far more efficient and they will be far happier,” Hoffman said. “It will be something that they will roll out to every organization within the next couple of years.”
Q: What did you take away from Welch’s approach?
A: People need to be able to create their own space, they need to be able to operate and figure out their own ways to be successful and create that value. I think what Jack was trying to get at was that that old model was suppressing some of those leadership traits that we need to get out of people.
Q: How did you persuade Principal to make this change?
A: It came down to, I think, when I told a couple of people at the corporate level that I would bring my own son into this business. … They said we’ll give you the support and the latitude to figure it out. I think their last comment was just don’t screw it up.
Q: Why should prospective clients do business with Principal?
A: Principal has always had a Midwestern approach, which is working to build strong relationships with the companies and the individuals and the institutions that we work with. We’re focused on development of very strong advisers, independent advisers that can operate best with their clients and help them.