Former BB&T CEO John Allison Talks Leadership and Recession During
Capitalism Series Presentation
RADFORD -- Former BB&T CEO John Allison discussed “The Great Recession” and shared lessons in leadership during the 2010 Radford University Global Capitalism Lecture Series held on campus Wednesday, November 3. More than 600 students, faculty and friends of the Radford University College of Business and Economics (COBE) attended the second annual symposium, which was created in 2009 as a result of a $750,000 gift from BB&T.
Allison, the architect of one of the great banking growth stories of the last century and a CEO named by the Harvard Business Review as one of the last decade’s top performers, addressed the value of “Principled Leadership” in a speech to RU students in the Hurlburt Student Auditorium and then addressed the causes and consequences of the current financial crisis during a luncheon in RU’s Muse Banquet Hall.
Former BB&T CEO John Allison during luncheon address.
“The challenge is philosophical and the cure is philosophical,” said Allison, now a Distinguished Professor of Practice at the Wake Forest University Schools of Business, during a luncheon presentation entitled Financial Crisis: Causes and Consequences. “I remain optimistic that simple and profound solutions can be found in the world-changing economic principles that made America great - life, liberty and pursuit of happiness.”
Allison cited four themes underlying the current financial crisis: government policy errors, the subsequent bubble created by those errors, serious mistakes made by financial institutions that compounded the situation and the resulting erosion of Americans’ standard of living.
Recalling the causes of the savings and loan crises of the 1980’s, Allison suggested that flawed government regulation, faulty monetary policy and questionable lending behavior by agencies like Freddie Mac and Fannie Mae and corporations ultimately led to the collapse of the nation’s real estate market, a one to two trillion dollar housing surplus, and a deep recession.
He said he does not believe the country is headed toward a double-dip recession, but predicted a period of “marginal deflation” and the possibility of 1970’s style “stagflation.” He also expressed concern about the economic vitality of the United States 20 – 25 years in the future.
From left, Provost and Vice President for Academic Affairs Joe Scartelli, College of Business and Economics Dean Faye Gilbert, President Penelope W. Kyle, and former BB&T CEO John Allison.
“We can turn our country around,” he said, providing we abandon what he termed a “free lunch mentality” and return to a sense of “personal responsibility.”
Allison’s morning presentation, entitled “Principled Leadership,” focused on the operating principles Allison infused into the BB&T culture that enabled his organization to weather the current economic situation.
“I believe leaders have two roles,” said Allison. “They create a sense of purpose in themselves and in their teams, and they live a set of principles that enable that purpose to be turned into reality.”
Allison articulated ten principles – fact-based reality, reason or objectivity, independent thinking, productivity, honesty, integrity, justice/fairness, pride, self-esteem or self-motivation and teamwork or mutual supportiveness – that underpin “The BB&T Philosophy.”
“Having the right set of principles is the foundation of organizational success and your happiness.” Allison said. “I urge you to make a commitment to accomplishing great things in your life and figure out the basic principles that will make you happy.”
Allison began his service with BB&T in 1971, became president of BB&T in 1987 and was elected Chairman and CEO in July 1989. During Allison’s tenure as CEO from 1989 to 2008, BB&T grew from $4.5 billion to $152 billion in assets. In January 2010, Allison was recognized by the Harvard Business Review as one of the top 100 most successful CEO’s in the world over the last decade.
The RU Global Capitalism Distinguished Speaker Series is part of RU’s Centennial Celebration and is an ongoing project between BB&T and COBE to stimulate thought and discussion about capitalism, the tenets of free enterprise and the best practices of successful organizations.