By Jack Bobo

When we speak of leaders or leadership, we usually do so in a positive sense and in terms of accomplishments. But such is not always the case, for leaders can be destructive, as well. History is replete with examples of nations that have been led into oblivion by misguided leaders. The same can be said of other entities such as corporations and organizations that fail the public trust or misinterpret the challenges of the times. Success or failure is most often the product of leadership.

More often than not, leadership, good or bad, comes as a response to challenges that arise. A good example is the development of the area where I live. One hundred years ago, the Phoenix area was essentially a wasteland ravaged by floods part of the year and an arid desert the rest of the year. Even in ancient times, a succession of Indian cultures could not long survive. That was the challenge that leadership faced before a viable community could be built. The first response was an irrigation system that controlled the floods and brought water to the parched land. From Swillings’ “ditch” to the Roosevelt Dam, the nation’s first reclamation project, leaders with foresight met the challenge of turning a wasteland into one of the nation’s most productive farmlands. Still later, refrigeration tamed the summer heat, making Phoenix one of the fastest growing cities in the country. The source of progress was the result of challenges met.

Underscoring this, Will Durant, the noted historian, observed, “Challenges successfully met [as by the U.S. in 1917, 1933 and 1941] raise the temper and level of a nation, and make it abler to meet further challenges.”

At critical times in the history of our business, leaders of the National Association of Insurance and Financial Advisors (formerly the National Association of Life Underwriters) have responded to challenges that could have crippled, or even destroyed, important segments of our business. Initiatives in agent education, legislation and regulation all were spawned by responses to challenges of the times. This is, of course, an ongoing process for there is no end to challenges that periodically arise.

In the years that I spent in Washington working with NALU, I had the privilege of observing firsthand the responses to our challenges by elected leaders. I always have marveled at the fact that no matter what the challenge, we always seemed to have the right person as [NALU's elected] leader to meet that particular challenge.

I could cite many examples of this, but one that immediately comes to mind is Kirke Lewis, NALU president, 1980-81. Kirke passed away recently after a long illness, but he left behind a legacy of inspired leadership in many of our industry organizations and a remarkable track record for responding to challenges. During Kirke’s year as president, our business faced an enormous crisis. Interest rates spiked to record levels and even the prime rate hovered in the 20% range. This was a serious threat to the hundreds of billions of dollars contained in permanent cash value life insurance policies and which were subject to call by policy loans at interest rates of 5% and 6%.

Financial advisors were urging people to borrow out those values at the low interest rates and deposit them in safe higher yield CDs and bonds. On a large scale such disintermediation could have wreaked havoc with our products.

The companies proposed, as a solution to the problem, substituting a variable loan interest rate pegged to an index and with enhanced dividends to non-borrowers. At first the field force was opposed to this change because they felt interest rates would abate and the low rate on policy loans was a valuable selling tool. Kirke Lewis was among the first to “see the light” and recognize that change to the variable rate was essential to survival and it was up to him to convince a skeptical constituency. It was not easy!

I watched Kirke address an annual meeting of the Association for Advanced Life Underwriting with this proposition as his main topic. Most of the audience did not support the idea and many were downright hostile about it, and so I worried about how he would fare. But Kirke seemed to thrive on controversy and, to my great surprise, when he ended his presentation he was given a standing ovation and thunderous applause. The tide was turned and the proposition began to gain momentum. There were other key players in the battle such as Tom Sutton of Pacific Life and Bill Regan of New York Life, but it was Kirke who first met the challenge which likely saved our business from destruction.

But there were other challenges during Kirke’s year. Amendments to the Social Security Act had disadvantaged agents in that renewal commissions could disqualify them for Social Security benefits. In the final hours of that session of Congress, a bill was passed eliminating the problem–an important accomplishment of Kirke’s administration that went unnoticed by most.

While battling the variable loan interest rate issue, Kirke was responding to a challenge on another front. Premium rates on our group errors and omission policy for members had skyrocketed because of claims, and splinter groups were starting to break off, thereby weakening the program. Again, Kirke, still thriving on controversy, waded into the fray, appealed to the splinter group to return to the fold where all would be better off. He succeeded and the plan was saved from destruction–a masterful piece of diplomacy.

My purpose in writing this is not just to honor my friend, Kirke–but rather to illustrate the importance of responding to challenges as they arise.

Leaders are sometimes called to greatness because of the way they respond to challenges. Those who do not and simply sit tight hoping the problem will go away are usually consigned to the ashcan of history.

I always have marveled at the fact that no matter what the challenge, we always seemed to have the right person as [NALU's elected] leader to meet that particular challenge.”