When the financial markets collapsed in 2008 and 2009, Robert "Bob" Guillocheau, the chief executive at Ascensus Inc., faced a test of his concept of servant leadership.
First a definition, as explained by Guillocheau said during our Leadership Agenda interview published in Monday's Inquirer. The idea is, he said, that chief executives, including himself, serve the employees, providing them with what they need to serve the customers. The customers appreciate the service and patronize the business, recommending it to others. That adds value, and ultimately, brings value to shareholders. I
"About 15 or 20 percent of our revenue goes up and down depending on what happens with the value of the assets in the plans" administered by Ascensus, Guillocheau explained. "So if you recall, the stock market went down 50 percent, so 15 percent of our revenue dropped by 50 percent.
Ascensus, based in Dresher, handles back-office operations for retirement and college savings plans. Functions include customer service, record keeping, payments, statements -- everything but the marketing and investment decisions.
"In the Inquirer and every other media outlet – day after day after day after day, there were announcements of more and more layoffs, particularly in the financial services industry. And, yes, we were negatively impacted by what was going on," Guillocheau said. "But at the same time, the amount of client calls coming in, if you can imagine the 1.7 million people whose 401-K balances [were dropping], they were calling up greatly concerned. Our revenue was dropping, but the need for what we do was only increasing.
"So we had an all employee meeting and I said, `Hey, here's what we're doing. It's not as though we're a nonprofit and can ignore what is happening to the economics of our business. But, we're not going to be letting anybody go at all. You guys need to come in every day and deliver the same great service that you've been delivering because we have so many clients out there who really, really need us right now.'"
He continued to quote his speech: "` Here's what we're going to do financially, so we can weather this right now. Myself and the entire executive team are going to be taking reductions to our base pay and we're going to significantly reduce our bonuses. We're asking every member of management to accept a reduced bonus program for the next year. We are going to ask you all, because this is shared responsibility, to forgo a merit increase this year and we made a small reduction in our 401-K plan.'"
How did that play with the employees, I asked.
"I have in my home office, a file folder this thick, of emails I received from our associates over the next two or three months as well as from clients who were thrilled, because the level of our service and our responsiveness was unbelievably high. I had so many notes from people that said, `I'm so proud that I work here at Ascensus.'"
Guillocheau said his servant leadership paid off: "Our business has performed extraordinarily well before and after that difficult time."