Thirty Minute Mentors Podcast Transcript: Principal CEO Dan Houston

I recently interviewed Principal CEO Dan Houston on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:

Adam: Our guest today is a Fortune 500 CEO and the leader of one of America's largest financial services companies. Dan Houston is the CEO of Principal Financial Group, where he leads nearly 20,000 employees in a business that generates more than $13 billion a year and serves more than 62 million customers. Dan, thank you for joining us.

Dan: Adam, it's truly an honor and a privilege. Thank you for the invitation.

Adam: The honor is mine. You grew up in two very different places. Houston, one of America's largest cities, and Dow City, Iowa, a city of less than 500 people. You went to college at Iowa State before kicking off your career right out of school with an entry-level job at Principal. Can you take listeners back to your early days? What early experiences and lessons shaped your worldview and shaped the trajectory of your success?

Dan: Thanks, Adam, for the question. And yeah, I had a great childhood and we had relocated from Council Bluffs, Iowa to Houston when I was 10 years old. And I had the unique opportunity then to come back to Iowa and live with my grandparents. So, there I was in Houston with a population that was growing, they say roughly a thousand families a day, relocating to Houston in the early 1970s. And then spending the summer on the farm, living with my grandparents in a town of roughly 400. 

And I saw where small-town politics and how big communities had come together and what an agricultural-based community look like relative to what at the time was a very large city in Houston and I had the best of both worlds certainly by having that perspective I knew who the small business owners were in Dow City, but didn't have a clue of who those business owners were in Houston and vice versa, related to large companies. And so, it provided me with an incredibly unique perspective to appreciate small business, individuals, farming, agriculture, at the same time understanding commerce, oil, gas, ports, and the interesting things that go on in a very large city.

Adam: It's pretty rare to say the least that someone begins their career at a company, particularly a company the size of Principal and becomes the CEO. Can you walk listeners through your journey, how you rose within your career and what anyone can do to rise within their career?

Dan: Yeah, so I graduated from Iowa State and knew that I wanted to work for a company that stood for something, and maybe one of the best lines Adam I ever had. as we were driving to the airport and we were talking about two other companies that had made offers to me, both of which weren't terrible industry. And one was in the tire and rubber business. One was in the plywood and lumber business. 

But our name before it was the Principal Financial Group was the Bankers Life Insurance Company. And Chad Sims, my first boss, we were driving out from the office to DFW Airport, which is where I started my career with Principal some 40 years ago. He said, Dan, if you join the Bankers Life Insurance Company of Des Moines, Iowa, you'll change lives every day. And it was true. And what we do matters around bringing financial security. And I've always had that in the back of my mind that potentially leading the organization someday was one of my goals. 

And I've had a lot of different jobs, a lot of interesting opportunities for working with the Principal. these last 40 years, but it was all made possible because of the culture in principle. It's built on stability. It's built on mentoring. It's built on the basis of collaboration. And its North Star is around meeting the customer's needs around financial security, whether it's through a savings product or a protection product. And it's those qualities that frankly has caused me to always be very loyal and very proud to work with a company and work and lead the company at a Principal Financial Group.

Adam: When you have 20,000 employees in your company, how, as the CEO, are you able to influence and impact culture?

Dan: I think it's in large part because you have great teams surrounding you. A CEO can work with speechwriters and they can write great press releases. And my goodness, I've got an incredibly good partner in Paula McCarty who helps lead me through those various stages. But at the end of the day, you set the tone at the top and that tone permeates its way down through the organization. I still have a lot of client contact. I still see employees face-to-face. 

And so, I believe that one of the ways that you do it is through the continuity and the hire and the recruiting of your senior mid-level managers to make sure that they are ultra carriers for the organization. around those things that matter around serving the needs of the client, being trustworthy, having perseverance in overcoming adversity, all those qualities you look for in high-performing workforces. And we certainly have that at roughly in 20,000 strong here at the Principal.

Adam: What were the key skills that you developed that allowed you to rise within your career, that allowed you to become a senior leader at Principle, ultimately become a Fortune 500 CEO? And what are the most important skills that you believe everyone should develop as they're trying to rise within their careers?

Dan: There are a few things I tell every intern, new employee, and even the interns that I speak to within our community. There are three attributes coming out of school that I think you are well-served to have these. One is trustworthiness. You have to be trusted. And it's such a central part of a working relationship with your peers or your superior that you can be trusted. The second is around being a good teammate. There are very few things that today you could do as just an individual contributor on your own. The co-dependencies against research, codependencies on data and technology, all of those things are such critical parts of the ecosystem that each one of us needs to have in place in order to do our best job. 

And then the third one for me, which is very important, and it's an area that I probably worry about the most. You have to be technical in something. Are you technical in accounting, technical in finance, technical in writing, technical in marketing and sales and distribution? But you have to bring something to the table. You have to hone those skills, refine those skills, and bring something of a technical nature to help fill out that ecosystem. 

So those are the three critically important attributes that you bring. And I think in this day and age, if there were two others to think about, it's the embracing of technology, no matter what age you are, you've got to embrace technology for what it can do. And then your orientation towards serving the needs of the customer. You have to be mindful that at the end of the day, we're here in these jobs because we're serving a customer.

Adam: Dan, you shared a lot of great stuff there, and I want to dive into each of those themes over the course of this conversation. Let's start off with the first one. You mentioned the importance of trust, essential to success as a leader. How can anyone build trust?

Dan: Yeah, I think the proof is in the pudding, right? At the end of the day, your actions and inactions are a reflection of how people will find you as a carrier of trust and doing what you said you were going to do, being transparent, having full disclosure, admitting challenges or errors that you may have made, because it isn't the error that oftentimes causes a challenge, it's the covering up of a mistake that creates a problem. So, I think in large part, you have a responsibility to co-workers and to yourself and certainly to your partner, spouses, etc. To be truthful in your views, your thoughts, and your perspectives. 

And I think when we do that in an honest and transparent way, it's how you gain trust. And you do that over, over time, after time, after time. And you and I both know, Adam, that the surest way of losing credibility is to lose the trust of others. I think once that occurs and you're in a leadership role, you’ve in large part probably rendered yourself the ability to create high-performing teams would be my guess.

Adam: I could not agree with you more. Trust is built over time. You need to be authentic, honest, transparent, open, something you shared, which I love. Every single one of us makes mistakes. We make mistakes all the time. A line that I have repeated many times on this podcast is a line that I heard from a mentor of mine, the late Richard Reardon, former mayor of Los Angeles, who used to tell us, only a mediocre person never makes a mistake. It's not about making mistakes. We all make mistakes. What do you do after you make a mistake? Do you pretend like it never happened? Do you look the other way? The most successful people, the most successful leaders build trust by owning their mistakes. Use your mistakes to build trust as an opportunity to become a more successful leader.

Dan: Couldn't agree more. I work with a really talented coworker, Amy Frederick, who uses the expression, assume good intent. And I still think that comes into the trust category, right? It's when I make a statement and it may disagree with your views, assume that my intent is honorable and assume it's good intent. And I think to be on the record today, sometimes things can be politically charged and to the extent that the assumption is Dan comes here with good intent and he's going to be transparent and trustworthy. I think that's actually one of the keys to having a successful conversation. And it goes right at the core issue of, do I trust Dan with the information? Can I have an honest conversation? As we've discussed, and as you've pointed out very adroitly, it's critical, important, not only as a coworker but even double that as it relates to being a trusted leader.

Adam: Dan, you bring up a really interesting point and a really interesting topic. I've done interviews with US senators and I've asked them, how do you get things done with members on the other side of the aisle who you might disagree with 99.9% of the time, who you might not like at all as human beings and reason why I'm really interested in exploring that topic is because in the workplace we Oftentimes have to deal with people who we vehemently disagree with a lot of the time who we might not like as human beings, but we have to work with them and What I've heard comes down to the point you just brought up, which is assume good intent try to find the best in the people who you're working with and Try to find the humanity in others. Look for the positive. Don't harp on the negative. We all have negative attributes about us. As you get to know every person really well, you're going to find things about them that you don't like. But we all have positive attributes. Let's focus on the positive attributes. Come in with a mindset that we're all good actors and let the bad actors prove you wrong.

Dan: It reminds me of the old adage, first seek to understand, then be understood. And if we fail the first part of that equation to understand, what does understanding mean? It means understanding your point of view. And here's the reality. We may have different points of view, but the problem still remains. What are those areas of compromise that we can agree upon that would still allow us to accomplish the common goal? And usually it has, at the end of the day, more to do with your own ego than it does the question at hand. 

And so, I think truly understanding another person's vantage point, first seeking to understand that and then to be understood with your positioning is sort of a healthy way to think about going into every conversation. Because if you go in completely unwilling to understand another person's viewpoint, it's the end of society as we know it. And you and I both know that I think we're testing civility in this country today as much as we ever have. And so again, I think it's going back to everything you just framed relative to really having respect and having trust in that person that they're making an honorable position known about how they feel they might solve a problem.

Adam: I love that. Seek to understand rather than to be understood. Dan, you know as well as anyone, the most successful leaders don't walk into a room intent on speaking. They walk into a room intent on learning.

Dan: Yeah.

Adam: What can I learn from the people around me? How do I learn from the people around me? By listening.

Dan: Yeah, if you look back at history, some of the greatest minds and leaders of all time were great listeners and they had a true and profound desire to understand how things work and having clarity around someone else's position or understanding how things work is not possible if you're just doing all the talking.

Adam: You mentioned the importance of being a good teammate. How can anyone be a great teammate?

Dan: I think it starts with the person themselves and do they have the core values of a good team member. And that's a person who shares information willingly, that keeps confidential matters confidential if that's what it requires. They're a person that does have innate abilities around listening and problem-solving, which I think is critical. They've earned a spot at the table. They don't monopolize the attention of the room. And they are a person who is open to new and fresh ideas. Because you and I both have worked with individuals who come into a room and no matter what said, they're not going to change their opinion. 

And that's just a really lousy way to build high-performing teams. But back to our first topic, if the people are not trusted, you'll never have a high-performing team. It's just not possible. And I also think we just need to be careful about the word trust, because sometimes people might exaggerate it to the point of saying, well, they're dishonest. Well, trust has a lot to do also with taking information that's confidential. and using it in an appropriate way and not using it against somebody else. 

And so, trust is the capital T. It's a broad definition of an individual that can be trusted with information, that can be part of a problem-solving exercise without bringing judgment to the issue. And I think that is really an important part of building great teams. People having technical skills is an important part of also being a member of that team.

Adam: 100%. Trust is built over time. Trust can be lost in a split second. But something that you brought up, which I don't think people talk about enough, is You could also win over trust really quickly if you do something that other people notice. For example, someone entrusts you with highly sensitive information and you act the way that you're supposed to act. Someone entrusts you with a highly important task. You execute that task the way that you should execute it. You're going to win that person's trust just like that. That's right.

Dan: Yeah. And again, once you've lost that as a contributing member to a team, it's really hard to gain people's attention and respect. That's the other half of trust and have enough consistency in your decision-making, gain trust, you'll gain respect along the way too. You may have philosophically different views on certain topics, but they trust you and they respect your opinion. But it doesn't mean you agree on everything, but you're again, trying to get to a satisfactory outcome for a shareholder, for a customer, for an intermediary, whoever it might be.

Adam: Something else you brought up, which helped you get to where you are today. Developing a deep level of expertise in your craft, you use the word technical, a technical understanding of whatever it is you're pursuing. If your career is in the financial services industry, deeply understanding financial services, whether it's insurance or investment management What advice do you have for anyone listening on how to become an expert in whatever area they're interested in pursuing?

Dan: I heard an expression years ago that said, the only two ways we can learn are the people we meet and the books we read. And if you take both of those in sort of the broadest concept, I try to prove myself wrong, but I keep coming back to it. The people that we meet are the people that help us form a view. They help us shape concepts and ideas to battle-test our views and concepts. The books we read could be technical journals. They could just be historical facts that help provide us with a roadmap forward based upon what has been tried in the past and things do change. 

And so, when I come at this from a technical perspective, from when I started with the company some 40 years ago, you were forced to be a good reader and to go deep into the specifics of a particular problem. Frankly, other people, the people you mixed with, there wasn't social media, there wasn't the internet to, I think in some cases, hijack the conversation or truncate what otherwise could have been a deeper learning experience. And when you find yourself sort of going across the top of the treetops, you're not delving down into the gory details and understanding how things work. 

And the interconnected nature of, you just think about biology, think about science and how things are far more challenging, difficult, and complicated than a cursory view across the top. You need to understand how things work within an organization. How do the systems work in our business? How do actuaries use data and information relative to calculating risks that are very important factor of our pricing models and the actuarial tables and longevity and morbidity and mortality, all the things that go into that, having a deep understanding of how those contribute to your success or failure is critically important. And that technical mindset of understanding how it works. 

And again, it's not getting any less technical. If you think about how we're leveraging data today to make better decisions, better outcomes for our customers, all of that requires a deep-seated knowledge and understanding of how things work behind the scenes. And again, an area that I think we need to make sure that we're focusing on in our grade schools, our middle schools, our high schools, and certainly in college and our master's programs.

Adam: The last piece of advice you shared around how anyone can rise within their careers, which is as important a topic as any for leaders at all levels, customer orientation. How can leaders build customer-centric organizations? How can anyone at any level of any organization be as customer-oriented as possible?

Dan: Well, if I could wave my magic wand and so far, the magic wand hasn't had much superpower because I've been unsuccessful in doing this. I'd have every single new employee that started with the company to spend the first six months of their career on the phones with our customers or out in our field offices. And it's where I started. And the reason why it's so critically important is you understand at a very visceral level. the promises that we make to our customers and the need to make good on those. What are the promises we make? The promises we make, invest with us over the course of a working career and you're going to replace 80, 85 percent of your income in retirement. 

Be a customer Principal and someone dies prematurely. A son or daughter or niece or nephew still goes on to get a college degree. Someone's working hard as a laborer, falls off a ladder, breaks their leg, has a terribly complicated situation prevents them from working again or in the business of providing that stable income for that person until they're age 65. Those are really like important customer-driven attributes of the products and the services that we provide. If you're in accounting or finance or you're behind the scenes too far and you don't really understand what we do to improve the quality of life, I don't know that you ever get the passion. 

And so, we can tell the stories, we can share the insights, we can share the perspectives, but there's something about being out on the front line that allows everyone to have a much greater appreciation for what we do for our customers. And so again, I think that that's an important part. Given the fact we can't start everyone out in a location like that, how do we share the stories? What are we doing in our training and our development programs to make sure everyone understands? I remember 40 years ago; he was a former Marine. I don't think you're ever a former. I think once you're a Marine, you're a Marine. 

And our chairman at the time was a gentleman by the name of John Taylor. He says John Taylor is a Dream Maker 100. You all today, you're Dream Maker ones, and you'll be a Dream Maker 10 and a 20 and a 30 and a 40 as you go up through your career. But make no mistake, what we do at the Principal Financial Group, we make dreams come true. And I've never lost that orientation. So, we probably have hundreds, if maybe not a thousand different job titles for 20,000 employees. But at the end of the day, we're Dream Makers. We make dreams come true. that are important because are in large part around financial security.

Adam: Dan, you not only gave a lot of great insights around the mindset that everyone needs to have to be as customer-oriented as possible, but you just shared why you have been so successful as a leader, why Principal has been so successful as an organization. Clarity of mission. Clarity of focus, understanding why we do what we do, and bringing that every day. That's what every single one of us needs to do regardless of where we're working, what industry, what job, what level within our company. That's what it's all about.

Dan: Yeah, I think it is. And there's several other attributes we could talk about that I really value in individuals. Resiliency, overcoming adversity. Whenever we interview people, undoubtedly, when you have a sense of their fortitude, they usually tie it back to something that happened that was quite significant in their life that built on this notion of resiliency, overcoming adversity, and turning every negative into a positive. And that isn't to suggest being Pollyannaish, but as I've said many times over, you live about 84 years in a world that's been around nearly 11 billion years. 

Out of those 84 years, the first two and last two are in diapers. You got 80 years to make a difference in a world that's been around 10, 11 billion years. You can't afford to look backwards. You have to look forward. You have to overcome adversity. You have to be able to persevere. Second to that is something you touched on, got to be passionate about something. When you talk to an individual at a cocktail party and they're unhappy in their current job and you ask them, why do you stay? They'll say, no one else will pay me this much. I can't think of a more lousy reason to stay with a lousy company or a lousy mission because of the pay. Find the passion in your life. Find the joy in your life. It's kind of a small story, but the bucket list. I don't know if you've seen the movie with Jack Nicholson in it. 

And they were on top of a pyramid in Egypt. And of course, it's a fictitious story talking about what are the 10 things you'd want to do if you knew you're going to die tomorrow. And one of the comments that Jack Nicholson had made to his counterpart in the story was, do you know what it takes to get into Egyptian heaven? And he said, no, I'll take the bait. What is it? And the comment was, have you found joy within yourself? And he said, yeah. He says, you know, Jack Nicholson said, yeah, I found the joy in myself. And then Morgan Friedman said to him, he said, the second question is more difficult. 

Have you brought joy to others? And I've never forgotten this. So even a fictitious story, you can bring joy to yourself, but can you bring joy to others? And I keep that in the back of my mind nearly every day if you have interactions with people at a hotel, a bellman, person on the street. How do you comfort yourself? in a world that has become less civil. And it all starts with all of us, the seven or so billion people on this earth who need to find a way to find a common ground. And finding the joy in life may be one of those key ingredients.

Adam: And that's really what leadership is all about. We have the opportunity to lead every single day in all types of settings. You're the CEO of a Fortune 500 company. It's very easy for someone listening to this conversation to say, I understand how Dan Houston leads. He leads 20,000 people. But you just described the ways that you lead every day. That every single person can do regardless of whether or not they're a CEO, an executive vice president, or a manager. How you treat the people in your life, how you treat people who you come across. Are you bringing joy to others? Are you bringing joy to people who you work with? Are you bringing joy to people outside of work? How are you bringing joy to people? That's something that we should all spend more time thinking about and focusing on.

Dan: I know one thing; you could get a lot of things wrong. but bringing joy to others. I have a sneaky suspicion you won't hurt anybody's feelings in the process. I think that's sort of a universal attribute of a society that we'd all like to live, work, and play in. And again, it's a little bit like the pandemic rulebook for CEOs. It wasn't on the shelf. There was no owner's manual. And I think as it relates to civility, we all know the right things to do. We were brought up that way. Each one of us was born into this world with the notion of doing the right thing. And I think it's all within us if we want to tap into it.

Adam: Dan, what can anyone listening to this conversation do to become a better leader?

Dan: Yeah, you know, I think it's understanding different points of view. The books we read, the people we meet, seeking first to understand and then be understood. Those are, I think, the foundational elements of a good human being. And whether you go on to become a leader or an individual contributor, a volunteer in your community, those are very salient factors of being a good person. And if you're not a good person, I guess you shouldn't expect a very good leader. 

People will follow those who they would like to be like. I've worked for the most part all great bosses, but I've seen what bad bosses look like. And from those, I've even learned a lesson on how not to replicate those attributes. So, I think, Adam, at the end of the day, this is in large part based on assuming good intent, extending grace, and knowing that if you contribute in a positive way, I think over a long period of time, it comes back in spades as it relates to other people. They're going to treat you the way you'd like to be treated, I suspect.

Adam: Dan, what can anyone listening to this conversation do to become more successful personally and professionally?

Dan: Yeah, I'm going to come back to being a good teammate, being good at something that you do. Matter of fact, back to Houston and Dow city. I remember this was back in the late seventies, early eighties. I was jogging, which in Dow City, Iowa, there weren't a lot of people that were jogging. The farmers slowed down and said, you need to ride someplace because jogging was not common. And I said, no, I'm good. I'm just getting some exercise. And I say that because. he didn't realize that that's what I was doing. The assumption was that I must've had a broken-down vehicle of some sort. 

And so, I think as it relates to becoming a good leader, a good person, it's being aware of your surroundings, understanding different points of view, understanding that people don't share the same goals you do ultimately in terms of career aspiration, but you ought to treat them with exactly the same degree of respect. I have a very good friend of mine who's going through cancer treatment. He's turning 80 Thursday of this week and I drafted a note over the weekend to him to talk about overcoming adversity and resilience. He's been probably one of the best mentors I've ever worked with. 

And as I think about what he's taught me, it's about being technical. It's around overcoming adversity. It's demonstrating his love and passion for individuals from all walks of life and never being judgmental. I've never seen Tom be judgmental of an individual in my life. He always gives everyone an extensive, extreme amount of grace. And this is a person who's achieved so much more success than I've ever enjoyed so far, both personally and professionally. So, we're never done learning. We're never finished, I'm afraid. We're always a work in progress.

Adam: Dan, thank you for all the great advice and thank you for being a part of Thirty Minute Mentors.

Dan: It's an honor and a privilege. Thank you and much continued success to you and your associates.


Adam Mendler is an entrepreneur, writer, speaker, educator, and nationally recognized authority on leadership. Adam is the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal-winning athletes, political and military leaders - for intimate half-hour conversations each week. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities, and non-profit organizations. Adam has written extensively on leadership and related topics, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. Adam teaches graduate-level courses on leadership at UCLA and is an advisor to numerous companies and leaders. A Los Angeles native, Adam is a lifelong Angels fan and an avid backgammon player.

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