Progressive CEO Tricia Griffith wants leaders to engage in uncomfortable discussions

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On this week’s episode of Fortune’s Leadership Next podcast, co-hosts Alan Murray and Ellen McGirt talk with Tricia Griffith, president and CEO of Progressive, about her rise from the claims department to the C-suite; why the company is in the process of de-risking its property portfolio; and what it takes to diversify a board of directors. They also dig deep into the reasons leaders need to stop avoiding tough talks.

Listen to the episode or read the full transcript below. 


Alan MurrayLeadership Next is powered by the folks at Deloitte, who, like me, are super focused on how CEOs can lead in the context of disruption and evolving societal expectations. Welcome to Leadership Next, the podcast about the changing rules of business leadership.

I’m Alan Murray and I’m here with my fabulous, fantastic and recovering co-host Ellen McGirt.

Ellen McGirt:  It’s so good to be back. It is so good to be back with you and it’s so good to not be in the rain. I am not experiencing a storm or any kind of catastrophe right now. So I’m feeling particularly grateful.

Murray:  I’m glad you’re back because we have one of my favorite CEOs as guest today. Tricia Griffith of Progressive who I know you know well.

McGirt:  She’s one of my favorites too.

Tricia Griffith:  Oh, thank you. I’m so excited to be here.

Murray:  Really glad to have you. Tricia, I start with some news. Progressive was very recently named by Fortune one of the top 10 workplaces for women. I know that doesn’t happen by chance. I know it’s something you’ve worked on very hard. Can you talk about why it’s so important to you and what you’ve done to make it happen?

Griffith:  Yeah, absolutely. I’m very proud of that honor. And, you know, for me anything around diversity, equity and inclusion has to be really, really intentional. And so years ago, I saw that there were not very many people that looked like me at the top. I grew up in claims, which is much more male-dominated and I was the only [woman] on the claims team for a long time at the highest level and we had to change that. So we put programs into place many, many years ago. We’ve been working on this for probably 15 to 20 years, to make sure we were seeing the women that we knew could be leaders and actually making bets on some women. I mean, the only reason that I sit here as the CEO, is because my predecessor made a bet on me and gave me the head of HR job in 2002 with zero HR experience. I had to use that position of power to make sure we really made a difference in both women, people of color. And that’s been that’s been my platform for most of my leadership life.

McGirt:  Well, and you have a woman who’s the chair of your board. You have gender parity on your board. I mean, it really seems to have trickled up, trickled down, trickled sideways. I should know this, I suppose, but I’m not aware of another Fortune 500 company that has two women who are leading the company in this way.

Griffith:  I don’t believe there are in the Fortune 500 And that was another thing that Alan asked that question. It’s not like you can say okay, this is my board. Because a lot of times with boards it’s who you know, and it might be if I’m working with you know, a bunch of white guys or bankers that’s great because you want smart people. I remember when I when I got this role as CEO, I asked the nom [nominating] and governance committee if I could help with starting to recruit because usually they give you someone and oftentimes it is people they know. And so [chairperson of the board] Lawton [W. Fitt] was my partner in making sure we got the board diversity we wanted and so yeah, we have 50/50 women and men and about 13% people of color. I’m really proud of that, because one it’s the right thing to do. Two, the discussions in our boardroom over the last several years as we’ve changed the diversity have been amazing.

Murray:  You’re part of Fortune‘s Most Powerful Women community. There has been steady progress but you’re still talking about 10%, less than 10% of the Fortune 500 with women running the company. Why do you think, from your experience, this has been so difficult to get closer to parity?

Griffith:  I think most CEOs, when they’re thinking about board members, want sitting CEOs and that’s fabulous, but there’s a supply-demand inequality there, so that’s not going to happen. And so I started looking at what are skills I really need. And I also love the difference even ages, in terms of what you know from technology perspective. I have a cyber expert on my board that is from the Navy. She’s a three-star admiral. So, for me, I was looking at really smart people who could add value in something you need to run a company. If you want a woman CEO to sit on your board, there’s only so many of us. People need to be much more open minded. I think about my role as the chief operating officer, which is the role prior to this. I had just as much operational experience and I would have been great at boards. It was like I was this person who no one wanted to dance with until I had the CEO, you know the acronym, after my name. Then all then the calls started, everyone wanted it after that.

McGirt:  That is amazing. I want to dig more into your unusual rise throughout the company because it really is an extraordinary story and particularly your role at HR because it’s so rare to get to the c-suite to CEO spot from HR. But we are in the aftermath of Ian, you know it’s hurricane season, and I thought we should spend a little time talking about what’s happening down in Florida. Six insurers have declared insolvency in Florida. And I’m curious if you could take us inside the situation room and you know what it was like to plan for this event and just how it unfolded.

Griffith:  You know it’s always devastating and we have a lot of experience with events such as these and first of all, we make sure we take care of our employees. We have actually a system where people check in and say Yes, I’m okay and I don’t need help [or] Yes, I’m okay but I need some help. And we make sure everyone’s safe and sound and then it’s, of course, boots on the ground. And for our employees we send water, we send things that they need, like right now they’re asking for dry shampoo. We send fuel. We have a really well-oiled machine. And then the main thing is making sure we can get ahold of our customers and then you just have to get them back into the position they were before the loss. This is where we shine. I will tell you that you can’t control Mother Nature and I always say all you can control is what happens after. We don’t have a tangible product. We sell trust. So this is really important that we get out there and take care of our customers when they need us mouse.

Murray:  But Tricia, are you cutting back the insuring you’re doing in areas that are prone to hurricanes or weather events or even fire events? I mean, how are you thinking about these? What seem to be increasing risks?

Griffith:  We are trying to, what I would say, de-risk our property portfolio. So we’re relatively new, we bought A.S.I. which is now Progressive Home in 2015 and so we’re just learning sort of the volatility. So yes, we are trying to de-risk and grow in what we would call non-volatile states. That takes a while because people have 12-month policies. So we’ll continue to do that. But it’s in the best interest of everybody that we can actually make money at some point in property and we’ve struggled there this year, which is why we’re going to de-risk and you know, a lot of it is if we found out, as an example, in Florida, that you recently got a new roof that makes a difference because the older the roof is kind of a way of looking at how much damage can happen to a home in times like this.

Murray:  And I don’t want to make the mistake of saying that the hurricane that happened in Florida isn’t necessarily the result of climate change. Maybe it is, maybe it isn’t. We don’t really know that. It’s too complicated. But nevertheless, climate change is happening and it does affect risk on things like weather and fire. And it seems to me it presents a problem for your industry because you’ve always done your risk rating based on historical experience. And now we’re talking about something that’s changing in the future. How do you think about that? How are you thinking about climate generally in your business?

Griffith:  We look at a lot of different models that like you said, it used to be history. that is more real time. And we watch what happens out west with the fires and with hurricanes and even tornadoes, sort of in the midsection. And we try to model out what we think our cat load [category or risk load] should be, what we think reinsurance should be. So as an example most home companies with Ian have a retention level and that’s the most they’ll pay out and then the reinsurance kicks in. So we think about it from not just a growth and profitability perspective, but how we can take care of people across the country because, you know, people still need home insurance. And so we think about that all the time and model it with our reinsurers and we have a couple other specific models that we use as we think about our future.

[Music starts]

Murray:   I’m here with Joe Ucuzoglu, the CEO of Deloitte US, and the sponsor of this podcast for all three of its seasons. Thank you for that.

Joe Ucuzoglu :Pleasure to be here, Alan.

Murray:  Business is facing so many challenges these days, the continued pandemic the battle for talent, supply chain problems, rising inflation, and now on top of all of that war in Europe, how are companies responding to all this disruption?

Ucuzoglu:  Alan, you’re seeing a remarkable level of optimism in the face of so many very challenges. And by and large, I’d attribute that to a recognition that this is just the new normal, the constant curveballs that will be thrown at us. But at the same time, given how successfully so many of these organizations have navigated through these things over the past couple of years, a growing confidence that we’ll be able to continue to navigate the issues that get thrown at us and grow our businesses. But to do that, we are absolutely seeing a new brand of leadership emerge grounded in resilience, in agility, in a learning mindset. These are the most important leadership attributes in an environment where we should just expect that change and disruption are going to be at a consistently high level of intensity,

Murray:  The problems aren’t going away, Joe, right? You have to manage through them.

Ucuzoglu:  I had a CEO say to me recently that if you put together a list of the top 20 risks one week, something big is going to hit the next week and it probably isn’t even on that list. And that’s just a reflection of the number of different phenomena in the world right now and the level of complexity that businesses are managing through.

Murray:  Joe, thank you.

Ucuzoglu:  Alan, It’s a real pleasure.

[Music ends]

McGirt:  I want to return to your past, Tricia, because that’s going to get us back to the future of talent in your company and beyond. I like to think about you as being new to the company, being one of the few women who was, you know, tromping out to auto body shops, you’re in claims. You’re seeing the the insurance business from the ground up. Then you end up in HR in 2002 and you told us when you visited us at Fortune Connect, and thank you again for that visit, that you just didn’t think the company was doing things well enough. You weren’t convinced that the metrics were right or the metrics were good at all. And then you drop this one piece that I thought really illuminated what’s happening in corporate life around diversity, is that everyone had been trained not to talk about things that were uncomfortable, which I just thought was fascinating. And I hadn’t really thought about how entrenched that aversion to anything that’s really human and identity was in corporate life. Tell us about all of that and how did you begin to unpack that?

Griffith:  Well, I grew up loving our values and loving our culture. But there were a couple things missing and when I interviewed for the HR role, I said we need some robust diversity and inclusion programs. It used to be when you talked about something that happened you were in the wedge, which meant like, let’s not talk about that. And I thought that was just a travesty, because of course he’s reflecting our lives. And so that was one piece. The other piece was data. We had very little data on culture, engagement, you know, where’s turnover? You know, what were all the things that happen because we’re such a data-driven company, but we needed more. So those were sort of the two platforms that I interviewed on, and that I had the opportunity to actually make a change and start our diversity and inclusion program in earnest.

We started our first couple of employee resource groups when I was in HR. PAN, which is Progressive African-American network, and LGBTQ. And I think what what people really needed was to feel they could be seen as themselves and be themselves and I know for years I wasn’t my total self walking into body shops with a business suit on—you know, I’m 22, I’m just trying to get through the day. But people are so much more comfortable now because we’re so open. We have nine employee resource groups. We talk about diversity, equity and inclusion all the time. We have metrics and goals around it. We never really had goals before. And then I talk openly to the organization. During COVID I did these at home with Tricia videos where I just talked about, you know what was going on in my life, how I was feeling isolated. But then you have the murder of George Floyd. And you can’t have a company that feels comfortable when you don’t talk about things that we all saw, when we visually saw a person getting murdered. How do you not talk about that openly and emotionally? I think people appreciated that vulnerability, that we’re leading through really hard things that are happening outside our walls.

Murray:  I’m sure they appreciated it. They were probably a little surprised, Tricia, because my guess is that’s not the style of leadership that they or most people were used to. How how did you develop your leadership style? I mean, did you have a mentor? Who did you learn from? Because I think we’re talking about something that’s, tell me if you disagree, that’s probably different than your predecessors of Progressive or your predecessors at most companies.

Griffith:  It is different, but I think when I go back and think about my history, my parents were very open minded about seeing people, accepting people, embracing people. So I think it really started with my upbringing. And I’ve always been curious about understanding viewpoints of others. In fact, I, I joined in college, the Black action and awareness committee. I didn’t know that I’d be the only white person there. But I tell you, that first meeting, I’m like, Okay, this is how it feels. And so to be able to put yourself in those positions, I think is really important. So I think I’ve always been like that.

I don’t believe I ever talked as openly about the travesties that have happened. I don’t believe I’ve ever talked as openly about the fact that I’m privileged because of the color of my skin. And I got some backlash from that from some employees. And I love that because then you can open the conversation about why I would say that. And I had a great conversation, you know, with a gentleman who said I worked really hard too. And I’m like it’s not about working hard. I grew up in, you know, household of six, two-bedroom house. So this is not about working hard. This is about where we start the race. I’m giving people permission within Progressive to have these courageous conversations. And we always go into it. The only ask I have is assume positive intent, assume all of us are trying to learn on this journey and trying to see from many different vantage points. So I think it was a seed inside me and then, you know, the events of the last couple years have really allowed me to change and grow as a leader.

McGirt:  Let’s go back to women in the workplace. The last couple of years, we’ve just seen a mass exodus of women at every level. It’s just been bonkers. A lot of it has to do with childcare duties, but not entirely. How do you think about this going forward? And I’m thinking in particular, of some of the younger women, you’ve got women in call centers, you’ve got women in claims they have an unusual set of burdens. How do you check in with them and make sure that any future CEO in their ranks can be found and developed?

Griffith:  I think the key word there is “found” and I think it gets to be more of a challenge now that we’re in either a hybrid or work-from-home work environment. So it’s up to me and my entire leadership team all the way down, to see those people, to create programs, to create what we call moments that matter. So I do presentations all the time. And it could be a group of 20 people. It could be with our network of empowerment of women ERG where I’m talking about initiatives, and I make sure that I have an ongoing list of people that should be seen regardless of where they’re working. I think that flexibility piece is going to be really favorable to women. When I think of myself, I have six children, so as a young mom, I had to take vacation time to get to a parent-teacher conference. That should never happen again. Take your lunch at four o’clock. So I think if we do this right, and I believe we will, it’s going to be really beneficial for women to be able to see that balance that we’re all striving for.

Murray:  Tricia we’re in an environment of the worst inflation we’ve seen since the 1970s. Every day somebody else comes out with a new prediction that we’re headed into a recession. How are all those things affecting you and affecting Progressive these days? And what do you see the next couple of years looking like?

Griffith:  From an inflationary perspective, we have seen it very much so in the severity of our accidents. So think of the used car prices, think of new cars and a supply chain of chips, and then all goes downstream. So say you have an accident, it’s going to be more expensive to fix your car. It might take longer because there’s less tax which means there’s more rental car coverage. So our severity trends, even though driving frequency isn’t back up to pre-pandemic level, our severity is huge off the charts, which has caused us to have to raise rates which is, you know, hard to do when everything else is you know, cereal costs more, gas costs more, but we have to do so.

At Progressive we try to make four cents on the dollar. So we’re not trying to make an egregious amount of profit, but we had to raise rates to make sure that we kept up with that inflation. And then we watch the indicators, you know, Ian will be very telling because it’s really going to, you know, be big for the whole industry. And then as we come out of that, we’re slated to grow, we’re slated to grow right now. We’re very well positioned with our rates. We got out ahead of it. Most of our competitors are now increasing rates so that means shopping and they’re coming to us so we feel bullish about the future. Of course, we’ll watch, you know, signs for a recession, and what that means, but we’re pretty excited about our future. And we’ve been hiring and we’re ready to we’re ready to rock and roll and grow.

McGirt:  One more philosophical question for you. I know that you are one of the signatories and the authors of the purpose of the corporation, the Business Roundtable. I know that work means a lot to you. And along with the inclusion work, we’re seeing a lot of backlash around ESG and it’s pretty intense, and I know that you follow that closely too. How do you put that into perspective, the kinds of pushback that we’re seeing, particularly at BlackRock? And what do you think that means for the entire conversation around ESG?

Griffith:  I hope that CEOs aren’t fearful of talking about it and you know, E and S and G are all so different. And we have goals around each one of those areas. But to me, it’s something and being a signatory of that with the BRT was easy because we already doing that we’ve been working on DEI, for, you know, two decades. So for me it was just, yeah, of course, we would sign this because this is what we’re doing. It’s all about you treat your employees well, and they feel like they can be their whole selves. They feel empowered and valued. That’s going to you know, show with the way they treat our customers. Our customers are going to reward us with loyalty and retention, and then the shareholders win. So to me, it’s a nice virtuous cycle. There’ll be backlash. I think you have to be true to yourself. I think you have to always be cautious about speaking every single day on an event that could happen because it could happen every day. So you have to really pick and choose and have conversations with your employees internally that maybe you don’t necessarily say externally but it’s conversations you’re having ongoing, which I do.

Murray:  Tricia Griffith, really well put. Thank you for spending some time with us here at Leadership Next great to have you.

Griffith:  My pleasure.

Murray: Leadership Next is edited by Nicole Vergalla, written by me, Alan Murray, along with my amazing colleagues, Ellen McGirt and Megan Arnold. Our theme is by Jason Snell. Executive producer is Megan Arnold. Leadership Next is a production of Fortune MediaLeadership Next episodes are produced by Fortune‘s editorial team.

The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.

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