Northwestern Mutual is unapologetically trying to return office life to its pre-pandemic norm in large part because CEO John Schlifske believes the strategy will give the financial-services titan a competitive edge in an industry that is enjoying a robust post-pandemic surge. He also thinks getting almost all NM staffers back to work together physically is the only way to optimize the company’s successful culture – and the best way to take advantage of its considerable investments in bricks-and-mortar.
Ranked No. 90 in the Fortune 500 list, NM has been a leader in the digitization of insurance sales, investment management and other core functions in its industry, as it hit new records for total revenue (about $34 billion), surplus and assets in 2020 despite the pandemic. While profits sank, NM garnered more than 200,000 new customers last year as Americans coped with the implications of the shutdowns and yet did so from financial positions that typically were barely diminished, or even enhanced, by the consequences of Covid.
But maybe even ironically, Schlifske is eager to return NM to a sort of 2019 approach. “Our goal is to get back to the work environment we had pre-Covid,” Schlifske, who has helmed Wisconsin’s largest company for 11 years, told Chief Executive. “Most of our people were on campus most of the time. We’re not going to have a permanent hybrid model. People will be able to come back, or work virtually.”
Schlifske said that he, personally, has been “trying this hybrid thing just to make sure I’m understanding it and am open-minded about it. I hate it. ‘What day do I go in, or not go in?’ I just think it’s not a good environment.”
NM began allowing employees back into its main facility, the company’s 32-story Tower and Commons in downtown Milwaukee, since June. “It’s been very popular already,” Schlifske said. “It’s fun to be back on campus.”
But more substantively, he explained three main reasons the company is forgoing a hybrid model and trying to restock both the Milwaukee skyscraper, which held about 2,400 people pre-Covid, and a campus in Brookfield Place in New York City that holds about 300 people.
“We have a very strong culture at Northwestern Mutual Life, and that’s a competitive advantage for us,” Schlifske said. “It revolves around our sense of duty to policy owners and always doing the right thing even if it’s not always in the unit’s best interests. It took us 160-some years to build up that culture, and if you’re in a virtual environment, it can dissipate literally in one generation, in about 15 to 20 years. To have that culture be sustained and maintained, we need to be on campus.”
Second, NM’s huge workforce is pretty contained, geographically—in the Milwaukee mother ship, in the New York office that the company picked up when it acquired LearnVest in 2015, and at an 84-acre complex in Franklin, Wisconsin, in suburban Milwaukee.
“We’re not some far-flung global company with employees in every state and nation,” Schlifske said. “We’re very concentrated. And that’s an advantage for us. If we weren’t on campus, we might as well be far-flung. It’s the notion of being together physically that we want to maintain and capitalize on. Good collaboration is good business at the end of the day.”
A third reason for Schlifske’s decision is that “we are a single-P&L company, and everyone has to work both vertically and horizontally for that to [succeed]. That’s difficult in a virtual or hybrid environment. It’s not the same. With everyone virtual, you just have to make do with it.
“With seven or eight people in a conference room and one or two virtual, it just doesn’t work as well. It’s clunky; you can’t talk. You have to take turns in a stilted way and you can’t have a free-flowing discussion. With everyone in person, you’re able to write on a whiteboard and read people’s facial expressions. All of that stuff goes out the window in a hybrid environment.”
As a result, Schlifske said, NM is “completely committed to having most of our people” physically on campus “most of the time.” That policy will allow, of course, for “flexibility for appointments and other things, though that’s not new to our company.”
Schlifske said that “most employees are excited” about NM’s plans to return to pre-Covid work arrangements. For one thing, the $450-million Tower and Commons that NM opened in 2017 represented a significant enhancement of their physical environment, with a new, 550-foot-high skyscraper and refurbishment of its adjacent old headquarters fashioned around egalitarian arrangements and digital imperatives. The outer walls are set aside for employees as meeting rooms and places for innovation and collaboration, rather than being devoted to people up the hierarchy. Exercise areas populate the interior of the building, and flexibility dominates the ergonomics, right down to floor vents at each station that allow the employee to make personal space warmer or cooler. And instead of being reserved for the board room or a restaurant, for example, the Tower’s top floor can be used by anyone in the company for a meeting that overlooks the Lake Michigan shoreline and the city.
NM has been taking a similar approach to making its facilities in New York and in Franklin beckon to returning workers.
“We know we need to make the workspace an attraction for people” after the pandemic, Schlifske said. “We can’t be forcing people to come to work. If the majority feel that way, we’ll have a problem. But if we have a campus where people want to come to work—to collaborate, to have lunch, to work out – we can win most people over. And that’s exactly what we’re going to do.”