Marketing: Equitable

Unit 3, Professor Das Narayandas, Market-Facing Functions, New WOW at Equitable (A): A New Way of Working.

The previous piece, Belden, was about switching sales from parts to solutions in the very year the financials looked best. This one is the same course, but it asks about a layer further in: you can dream up the solution, but can the organisation's metabolism keep up? A life insurer founded in 1859 has just moved out of its French parent's house, and the CEO says he wants to build a home he actually wants to live in — only to discover that the old habits, closing the books twice a year with a US$200 million error threshold, can't move into the New York Stock Exchange.

Here goes — enjoy:

Case Summary

Early 2025. Equitable Holdings CEO Mark Pearson and COO Jeff Hurd are looking at a report card. The new way of working — they call it NWOW — has been rolling out across the company for about 36 months, and roughly 80% of people have embraced it. The board chair has just spoken about its power at an industry forum. Management layers have shrunk from 26 to 5; psychological safety is up 25%; click-through on group retirement's online customer service is up 400%, and the extra 13,000 outbound calls translated into US$70 million in additional sales; by the end of 2024, total shareholder return since the 2018 IPO stood at 175.5%, against 86.1% for core peers.

Pearson is still uneasy. The sense of urgency he had hoped to ignite never reached the intensity it should have. Wealth management is in the middle of its rollout, and the preference for the status quo there is very high. He asks Hurd: is 80% enough? Can some divisions make a few adjustments? Can we declare victory?

Rewind seven years. In 2018, France's AXA spun off this US subsidiary in an IPO that raised US$2.8 billion. The new company kept Athena on its blue shield. Pearson became CEO. Born and raised in Zimbabwe during its war of independence, he couldn't afford university, went abroad into insurance at 17, built growth in Hong Kong and Japan, and parachuted into New York in 2011 to take on the post-financial-crisis job of rebuilding the balance sheet. He describes himself as someone with the patience to get things done — not the type who tears everything down and then leaves.

The IPO gave him his first chance to design the brand, principles, structure and goals from scratch. He said he wanted to move out of mother AXA's house and build the one he wanted to live in. But the habits still lived in the old house. In the words of CFO Robin Raju, after going from a mutual to the subsidiary of a large overseas conglomerate, "the culture was relaxed and comfortable, but there was very little accountability." Accounting was done twice a year, with a 50-day turnaround and a US$200 million error threshold. Group insurance relied on 1,500 policy enrollers. The rejection rate on enrollment forms was 61% — 61% of forms had to be sent back and filled in again. The internal refrain was: these ways have always worked, so why change?

The board approved targets that had to be delivered publicly by 2020, and then asked one question: do you have the culture to achieve these results? Pearson read John Doerr on OKRs, sat in on a design-thinking seminar at Stanford's d.school, and visited Spark, ING and USAA. That 61% became a signal — ordinary improvement asks how to bring the rate down; design thinking asks how to get to zero rejections. In 2019 he launched NWOW, and at year-end handed the Innovation and Design Office to his former chief of staff, Hillary Menard, with five pillars pushed together: OKRs, adaptive leadership, design thinking, enterprise agile, and dynamic enablers who contribute by skill rather than by title. The new organisational units were called tribes, squads, centres of excellence and self-managed teams. Squads were capped at 10 people. Raju said that beyond 10, you can't move fast.

He insisted on staffing the IDO with insiders, bringing in McKinsey only as an accelerator. Menard designed a five-day bootcamp covering all five pillars at once. "If we ask people to keep coming back to learn more, we'll lose them." Once the bootcamp ended, teams had to run on NWOW. In early 2020 he took the top 30 leaders to an off-site in New York, with Empowered as pre-reading. Steve Scanlon, head of group retirement, walked in thinking it was just another meeting about making everyone a better manager. When it broke up, most people were still in wait-and-see mode. Pearson pulled him aside: you will be the first to put this approach into practice in a business line.

The squads were picked within a day. Then the world stopped. The original assumption was that everyone would be in the same room. Raju asked whether they should pause. Hurd decided to do the opposite and accelerate — agile and design thinking were exactly the capabilities needed in uncertain times. At the same time, Pearson ended the engagement with McKinsey: "The moment the people driving the culture change are no longer Equitable's own, this thing dies."

Wholesalers used to visiting clients and playing golf were forced home, and sales fell 20% to 40%. Group retirement had 1,200 enrollers and no technology at all for handling enrollment by phone or online. Scanlon gave Bernadette Mitchell's squad a month to produce a transformation roadmap; they delivered in two weeks. They launched a minimum viable product with some features still in development, and revised it as advisers' feedback came in. Scanlon said: we would never have launched an unfinished product before. Now this was the squad's mission — not something people were pulled off other work to do on the side.

Resistance grew at the same time. Wholesalers' calendars were already full, and they refused daily stand-ups. In operations, a single payment collection involved more than 130 touchpoints, and people with 25 years on the job asked: if you change this, how do I know it'll definitely work? When Christy Chandler joined in 2023, her operations team's employee Net Promoter Score was just 0.7. Hurd himself sat for an hour next to a junior employee, watching her do something obviously inefficient and refuse to give it up, before conceding: in this situation, NWOW isn't the most efficient way. Some people with 30 years in and only a few years to retirement chose to leave early.

They adjusted, too. Chandler listened first, ran a 90-day comparison, and had IT extend the timeouts for when seven systems were open at once, so the team stopped losing what they'd already entered. Fafian's turning point came when new business was growing exponentially and adding people wasn't enough — the NWOW people showed up as people who'd come to help. Scanlon told managers: two meetings to explain why; at the third, I tell you this is how it's done. He said he didn't care what page 35 of Empowered said; he cared about output.

The B case is the 70-page playbook actually handed to employees in February 2021. It opens with a letter from Pearson: about 10,000 people turn 65 every day, and the retirement gap is heading from US$28 trillion to US$137 trillion. The playbook states that it is not a how-to but a set of building blocks to be hand-picked according to mission — and that it is itself an MVP. Then it spends over thirty pages on daily stand-ups, sprint planning, backlog refinement, reviews, retrospectives, PO Sync and Big Room Planning. The archetype best suited to call centres and branches — the delivery unit — had not yet been mobilised even once.

The case stops at three questions:

1. With 80% already on board, should they keep pushing to 100%?
2. The divisions that resist — leave them be, or pull them in with metrics and oversight?
3. Going forward, should they only hire leaders who will fully embrace NWOW?

My Thinking

This isn't a pilot — but that doesn't mean copying every page

Pearson said the words he couldn't take back very early on: this will change the way we work. This is a cultural change. This is not a test, and it is not a pilot.

He was right. A scoreboard that has already been announced publicly, run on an operating system that still closes the books twice a year, just means more frequent disappointment. The board wasn't asking whether the targets were credible; it was asking whether the culture could keep up. NWOW is the answer to that question, not another HR programme.

And 80% isn't enough to declare victory, either. The remaining 20% isn't a random tail. It sits in distribution, operations and wealth — the layer that faces customers, and the layer that's regulated. Wealth management's preference for the status quo is very high. The retirement business generates US$1 billion of cash flow a year, and that market peaks around 2030. A divided company will leak the next decade through the half that never converted. Scanlon says that if you can't get to 100%, it degenerates into a philosophy, then becomes voluntary, then fails. That's how social physics works.

But what the 100% applies to has to be spelled out. What's 100% is the mission, OKRs, end-to-end ownership, and the customer's voice in the room. Not every meeting on the 2021 calendar. The playbook itself says on page 4: hand-pick the building blocks for the mission in front of you. Hurd saw with his own eyes that, for some processes, it isn't the most efficient way. Wholesalers can give you upstream demand signals; they won't give you 15 minutes every morning. Forcing the calendar on everyone is how you turn a good operating system into box-ticking.

My own reading is that what truly can't be compromised in Pearson's statement is the operating system, not Tuesday's agenda. Bundle the two into one thing, and the last 20%, in the name of doing it right, will turn the first 80% into theatre as well.

What really moved the numbers was that this is now your full-time mission

Mitchell's squad turned in a one-month assignment in two weeks. Scanlon's remark is almost the entire theory: in the past, we had to pull people off other work and have them do it on the side; now this is the squad's mission, and they're highly focused.

The impressive numbers that followed — click-through up 400%, 13,000 outbound calls, US$70 million — weren't trained into existence by stand-ups. They came from the work no longer being part-time. Individual retirement put product, IT and pricing into the same squad, handoffs were killed, and new products moved faster. The 10-person cap is a constraint: the right people have to be in the room, and the wrong meetings have to go. Shrinking from 26 layers to 5 is the same thing at company scale.

Moonshot OKRs do something else: they make "grow 3%" sound like you've picked the wrong sport. The playbook says hitting 70% of a moonshot counts as success, while commitments like regulatory requirements and dividends must be hit at 100%. Without the first rule, people hold something back; without the second, stretch reaches the point where it can shut the company down. The question design thinking asked of the 61% rejection rate — how do we get to zero returns — is the same muscle.

MVP here isn't a software trick; it's a cultural licence. They shipped an app with one section still in development, took in advisers' feedback, and revised it. Scanlon says they would never have done that before. Covid made that licence urgent; the method made it legitimate.

Rituals are the accountability layer, and they come second. Stand-ups make it hard to hide — that's true. But Chandler took operations' employee NPS from 0.7 to 29.5 by listening for a few months first, running a 90-day comparison, and fixing the timeouts across seven systems. The way NWOW earned its keep there was by granting a licence to fix the work, not by adding another meeting.

Shareholder return since the IPO is double that of peers. Raju says that if cultural change doesn't ultimately show up in this number, it means nothing. I agree with that as the final test. I don't agree with crediting the number to stand-ups. Operating speed, calls, layers, whether employees would recommend the place — that's NWOW. The valuation also contains interest rates, AllianceBernstein, and that book of index-linked annuities. Both things are true at once, and in class we don't need to pretend there's only one.

The playbook's backbone is buried under a calendar

The B case isn't an analysis; it's the actual thing the company sent to employees in February 2021. That makes the classroom unusually honest — what we're reading isn't best practice summarised after the fact, but the operating-system manual everyone had in hand at the time.

Its backbone is good. The CEO personally wrote 10,000 people turning 65 every day into the opening letter. US life insurers' earnings were growing at 2.7%, against 5.5% for the S&P 500; NPS was 4.5, versus 77 for USAA; by 2025 millennials would make up half the workforce, yet only 4% were willing to join this industry. Why to change is written before how to change. Squads and self-managed teams, tribes and centres of excellence are separated out — the structure acknowledges that a call centre isn't a functional team. The role cards list "what I don't do": no micromanaging, no playing the boss, no going missing, no assuming I must have all the answers. That column is more useful than all the Spotify terminology.

Then it spends over thirty pages issuing a timetable. Daily stand-ups, sprint planning, backlog refinement, reviews, retros, a sync every sprint, a review every month, a day of Big Room Planning every quarter. The delivery unit — the best fit for branches, advisers and call centres — had not been mobilised even once at the time, and that empty archetype is precisely where resistance later grew. Mindset is drawn as the underwater part of an iceberg, said to matter more than the tools, yet gets only two pages. New hires would learn the calendar first, before learning to switch from "analyse until perfect" to "act, then iterate."

My own inclination: keep the first 20 pages and the "what I don't do" on the role cards. Turn the rituals into a menu. Before using this thing to push the last 20%, write the two missing chapters: regulated operations, and frontline distribution. A clickable PowerPoint frozen in 2021 is not a system still alive in 2025. Thirty-six months of scars — 130 touchpoints, seven-system timeouts, wholesalers willing to give signals but not sit through stand-ups — should already be written in. That they aren't is itself a kind of answer.

Without Covid, it could still have moved — just not like this

The ideas came before the virus. Public quarterly targets, a board asking about culture, a five-day bootcamp, Scanlon already handpicked — none of that needed a pandemic. Nor did Covid create the 61% rejection rate or the 1,500 enrollers. A man who had rebuilt a balance sheet after 2008 would have kept pushing.

But the NWOW in this case — 80% in 36 months, an unfinished app already in the market, a COO sitting next to a clerk for an hour — needed a deadline that made refusal very expensive. Only when sales were down 20% to 40% did an MVP become legitimate. Only with offices closed was the method something other than "new meetings in the same room," hard to fake and hard to simply wait out. They fired McKinsey because they couldn't afford to wait. Pearson put it bluntly: once the consultants leave, the thing dies, so our own people have to take the lead as fast as possible.

The irony of 2025 is the proof. Now people are asking: why bother? The pandemic is over, there's no fire to put out, and we're doing fine. If this method needed a crisis to get to 80%, the last 20% won't move forward on nostalgia. A set of habits that only works in wartime isn't an operating system yet. What Pearson has to prove now is that when people can go back to playing golf, mission plus squads is still worth something.

Classify the resistance first, then prescribe

Don't leave it be. And don't pull people in with nothing but a maturity score. There are at least three kinds of resistance in the case.

The first is where the playbook doesn't fit the work. Operations, wholesalers, the delivery unit that stayed empty. The cure is to redesign the last mile together with them. Fafian's turning point wasn't a kanban board; it was new business outpacing capacity, adding people not being enough, and the other side being people who came to listen to ideas. Put the metrics they already believe on the wall: cycle time, errors, employee NPS, first-year premium. There should be oversight. But HQ's scorecard can't be the only lever.

The second is leaders who don't buy in. Hurd asked: if they won't embrace it, are you willing to replace them? For this kind, yes. A sceptic among 26 layers can be outlasted; a sceptic among 5 layers runs a fifth of the company. Scanlon's two meetings plus a third "this is how it's done" fits perfectly here. Beyond that, it's a matter of selection, not change management.

The third is people with two or three years to retirement whose rational strategy is to outlast you. Let them go. Save the coaching inventory for pipelines like TAP — of its 24 participants, 54% have already been promoted, and the employee NPS among diverse employees is 33, above the company's 27.

A single company-wide adoption rate treats the first and second kinds as the same disease. It will be gamed, and it will poison the teams that genuinely need to change their processes. What can be done in 90 days: publish a menu of rituals by archetype; for the first kind, kill one bottleneck and pick one metric of their own; for the second kind, decide this quarter whether they stay or go. Don't announce 100%. Announce that by the end of the quarter, no team can be without a mission and OKRs. That's the floor no one opts out of.

Leaders must be inside the operating system; experts needn't love stand-ups

For future hiring, the bar for leaders should be hard, and the bar for talent can't be written as the same sentence.

For Tribe Leads, product owners and coaches, the job description is the operating system. The role cards already spell out what they don't do. A candidate who can't sign up to that is applying for a job the company is about to delete. The interview can include a live problem: 130 touchpoints, a wholesaler who refuses stand-ups — what do you keep, what do you cut, what do you measure? Anyone who says the whole playbook, no exceptions, fails. Anyone who says my team, my rules, also fails. Anyone who can separate principles from rituals passes.

Experts and revenue generators are a different matter. Dynamic enablers were always meant to be skill-first. Someone with 25 years who knows which of the 130 touchpoints will break things for the customer is exactly who Chandler's 90-day comparison needs. Frontline wholesalers, even if they hate the rituals, are, in Hurd's words, the voice of the customer. By 2025 only 4% of millennials want to join this industry. Adding a "please love the agile terminology" requirement on top of craft that's already scarce is a shortage you can't afford.

A rainmaker who refuses to let go of decisions — you can do without. An expert who hates daily stand-ups but still delivers on time — keep. Treat those two as the same culture problem, and the company will be fighting on the right battlefield against the wrong people.

Takeaways for Arcus42

Reading this case, what came to mind wasn't life insurance but any company that starts writing its own operating system. We're doing exactly that. The only difference: Pearson's licence came from an IPO; ours was written on the day the company was founded.

First, public goals without a new operating system just mean more frequent disappointment. The board's question — "can the culture keep up?" — is worth asking of every team that writes a beautiful plan. If the scoreboard changes but the metabolism doesn't, all that's changed is the reporting frequency.

Second, the operating system has to be run by your own people, and consultants should be burned off when their time is up. Pearson paid the price of going slow and still wouldn't give up this step. Once the people driving the new way are no longer the people living by it, it turns into a slide deck. Building the team internally is slower. Slowness is its insurance policy for survival.

Third, the unit of change is a squad with a mission and no second job. You can't deliver a minimum viable product on borrowed evenings. One module, one family, one delivery unit of no more than ten people — that's closer to Mitchell's two weeks than company-wide training.

Fourth, write the missing page of the playbook now: which meetings, and which kinds of people, don't attend. Equitable only discovered its wholesalers and claims later. If the cadence for the frontline and the external expert network isn't split out, resistance will show up in the form of "I'm already very busy" — and they'll be telling the truth. Principles at full strength, rituals as a menu by archetype — that way "we made adjustments" doesn't become a euphemism for "we didn't execute."

Fifth, leaders must be inside the system; experts are chosen for craft. Someone who won't put their files into the shared source of truth is a dis-enabler. Someone who doesn't love stand-ups but still delivers their expert memos on time is an expert. The interview question can be lifted straight from that 130-touchpoint live problem.

Sixth, the burning ambition has to be about people, not tools. Pearson was still using 10,000 people turning 65 every day in 2025, because the playbook's "why" could no longer move the last 20%. Tools are building blocks. Ambition is the backbone. If a company can only talk about which methodology it bought and never gets to the people outside the methodology, the last 20% won't move.

Final Thoughts

Before class, what I agree with most is "this is not a test, and it is not a pilot" — I agree with it as a statement about the operating system. I don't agree with it being heard as: every meeting in the 2021 playbook must be held at 100%.

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These are pre-class reading notes, compiled from Harvard case classroom materials, and do not constitute investment advice regarding any company.