The Leadership Moment – Clifton Wharton & TIAA-CREF

In today’s world, Pension funds are becoming extinct. Most companies are getting rid of these for 401k’s and other flexible retirement plans. Chapter 6 of the Leadership Moment book by Michael Useem takes a look at one of the largest pension funds of the past. The Teachers Insurance and Annuities Association – College Retirement Equities Funds aka TIAA-CREF.

Created in 1918 by the Carnegie foundation it grew to dominate the higher education money managers. It was not until the stock market crashed in 1987 that the administration of TIAA-CREF realized a change was needed. They turned to Clifton Wharton.

One of the first things Wharton did was to walk the halls of the institution and listen. He met with the employees, the critics and executives. He restructured and formed the new version and direction by involving. He got the buy in of the skeptics and doubters by listening to their grievances, understanding and working with them to find a solution.

A quote from the chapter:

“Buy-in by all those affected by an organization's change hastens its achievement. Consultation with them, engagement of them, and appeals to them are the critical steps for building acceptance of the change.”

Wharton learned this strategy by relying on his diverse background which started from child hood. Son of a career diplomat he grew up abroad. With a PHD in economics he spent over 20 years promoting agriculture in emerging economies and then moved onto Michigan State then eventually to the State University of NY.

This diverse background was then crucial in preparing him for his challenge at TIAA-CREF.

1/12/2011