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November 2009
A Beacon Guiding Growth
By Ellison Clary

     People and the free enterprise system are closely intertwined passions for John Allison. The long-time leader of BB&T Corporation—and recently turned university professor—enjoys teaching capitalism.

     It means more to him than pure business success, although he’s experienced plenty. Consider that he pushed his bank from $275 million in assets when he joined in 1971 to more than $136 billion before its recent takeover of $22 billion Colonial Bank.

     “We grew, but not to get bigger,” Allison says. “We really were focused on how we could get better. We passed on a lot of acquisitions we thought were overly expensive.”

     During a tenure that made him the longest-serving chief executive officer among the nation’s 25 largest financial holding companies, BB&T steadily grew to be among the leaders in virtually every measure of performance, including client service, credit quality, capital strength and operating efficiency.

     “I’m extremely proud of all that we’ve accomplished and the meaningful impact we’ve had on the lives of so many clients, employees and shareholders,” says the man who will relinquish his title of chairman at year’s end, after serving as CEO for 20 years. When he does, he will continue to interact with students at the school of business at Wake Forest University, where he is a distinguished professor of practice.

     At 61, Allison will be one of the youngest inductees ever to the North Carolina Business Hall of Fame when he is brought in on November 5 at Charlotte’s Westin Hotel. Hall of Fame inductees are chosen annually by the North Carolina Chamber of Commerce and Junior Achievement of Central Carolinas. This year’s class also includes Golden Corral founder James Maynard of Raleigh and Raleigh developer and former mayor Smedes York.


Moore on Allison

     Louis Moore leads BB&T’s operations in the eight-county Charlotte region and is responsible for its 68 banking offices and the 680 people who work in them. He presides over various initiatives that affect customers, such as commercial and corporate lending as well as mortgage.

     BB&T enjoys the third highest market share in Mecklenburg County, behind only Wachovia/Wells Fargo and Bank of America. For the region, which stretches from Iredell County to Chester County in South Carolina, BB&T trails only Wachovia/Wells Fargo.

     Moore’s territory counts more than $4 million in deposits and those increased at a 10 percent clip in 2008. This year’s growth will be slower, he says, and predicts that will continue until mid-2010. Still, he likes the resiliency he sees in the Charlotte region as it faces the sharp economic downturn.

     “Our approach is to try to work with our clients through their problems,” he says. “It’s better for us and it’s better for them. A lot of these folks are going to come out of this and do well when things improve, and we want them to be clients then.”

     In Charlotte since 2006, the 53-year-old Moore has been with BB&T since 1983.

     Asked about Allison’s leadership, Moore lists four points that make him a standout: communicating a vision, a participatory management style, a passion to be the best, and an emphasis on training and learning. He’s happy to see Allison take his place in the North Carolina Business Hall of Fame.

     The best word I can use to describe John Allison is ‘visionary’; John clearly had an idea of where he wanted us to go and he outlined that vision very well,” says Moore.

     “I told John when he stepped down as CEO that I appreciated him making me a better person, a better leader and a better banker,” says Moore.

     Moore also likes Allison’s participatory management style. “He thinks the more input you get, the better off you are,” he explains. “And debate is a good thing. You get better ideas.”

     High achievement figures into the Allison profile. “John has always instilled in us to be the best you can be at whatever you do—be the best financial institution possible,” Moore says.

     Then there’s the emphasis on training and education. “Just as important as the technical things about being a competent banker,” he says, “is learning that develops your brain in other ways and challenges you to think critically.”

     Allison echoes that sentiment. “The development and growth of people has been the most enjoyable part of my career,” he says.

     After growing up in Charlotte and Chapel Hill, Allison attended the University of North Carolina at Chapel Hill, earning a bachelor’s in business administration. He went straight to work for BB&T, which then was a small eastern North Carolina bank based in Wilson.

     He found he liked banking so much he ditched plans for law school, instead earning his master’s in business administration from Duke University while working at BB&T.

     While still a BB&T rookie, Allison collaborated with another associate to devise a true management training program. That basic course remains in effect today.

     “We have invested dramatically more in employee education for a long time,” Allison says. “We are really the only major bank that’s hiring intensely into a leadership development program in the current environment.”

     He thinks this investment has paid big dividends long-term. “Good people attract good people,” he says simply.

     Allison progressed from managing the leadership development program to regional loan administrator. He joined executive management in 1980 and became manager of business loan administration. A year later, he was named manager of the BB&T Banking Group and in 1987 he took the firm’s presidency.

     When he succeeded Vincent Lowe as chairman and chief executive in 1989, the bank had $4.5 billion in assets.

     A high point in Allison’s career was the 1995 merger with Southern National in which the bank kept the BB&T moniker and moved headquarters to Winston-Salem. Allison and Southern National head Glenn Orr agreed he would be chief executive and chair the combined companies.

     Allison is proud of BB&T Insurance Services, a business built from a tiny agency in Wilson. Now BB&T is the fifth largest insurance provider in the United States and ranks sixth worldwide. He’s quick to credit insurance chief Wade Reese. “Wade is a classic example of the success of BB&T’s investment in growing leaders,” he says.


Emphasizing Values

     Through the years, Allison developed and honed a business culture that emphasizes values. “We are very much a principle-driven organization,” he says, “and those principles are long-term guides to action.”

     For example, BB&T refused to offer negative amortization mortgages because leadership could see that many candidates for the loans couldn’t pay them back. “So we passed on something that was very profitable short-term, but would harm our customers long-term, not for economical reasons but for ethical reasons,” Allison points out.

     An avid reader, Allison likes many of Ayn Rand’s theories. “Rand is an advocate of reason, individual rights and capitalism,” Allison says. “In the long run, if the government violates individual rights, including the right to the product of your labor, the philosophic principles which have made America great will be destroyed.”

     BB&T sponsors programs on the moral foundations of capitalism at more than 50 universities. These studies caused controversy at UNC Charlotte and Marshall University, but interest in the academic community has grown rapidly and the number of programs has expanded.

     Allison estimates he’ll deliver 50 talks this year, “defending free markets and trying to make people  understand that a free society includes economic freedom.” He thinks current government policy is taking the country “in the wrong direction with blinding speed.”

     With Wake Forest students, he plans to talk about principles of leadership. “I think there’s been a failure of leadership both in business and government,” he says, “and it’s because we’ve become very pragmatic, very short-term oriented, and we need to take a longer-term perspective.”

     When Allison steps down as chairman, he’ll have more time to read philosophers such as Thomas Aquinas, John Locke and Thomas Jefferson. “There is a group of philosophers that have greatly influenced my thinking,” he says. “Aristotle and Ayn Rand would be on top of my list. They are the fundamental defenders of reason and scientific method.”

     He will also enjoy his model railroad. “I didn’t have a lot of money growing up, so I couldn’t get the trains I wanted,” he explains. “Now I’ve bought plenty of them.”

     If that’s surprising, it’s among the few details about Allison that are. “It’s very predictable what I’m going to do,” he smiles, “because it’s based on what I say.”


Successful Transitioning

     That sentiment is reflected in Allison’s succession plan, providing an orderly transition for Kelly King, formerly chief operating officer who took over as BB&T’s chief executive January 1.

     “There were five of us that pretty much drove BB&T,” Allison says, explaining they were about the same age. “So we started over five years ago working on a succession plan. If you haven’t planned for the future of the company after you retire, you really weren’t a good CEO.”

     Marking King’s first year at the helm is this summer’s acquisition of Colonial Bank. Reeling from bad loans, Colonial was failing and the FDIC picked BB&T as the buyer. That acquisition adds $22 billion to BB&T’s $136 billion in assets and brings it a presence in Texas, a new territory, and jumps the bank to 8th largest in the country.

     Moore played a critical role in the Colonial takeover. He found 28 retail associates from his territory to travel to Dallas and Austin and ease the transition to BB&T. They were part of a force of about 400 who flew to Colonial branch destinations on a Thursday evening and couldn’t tell their loved ones where they were until the deal was closed late Friday afternoon.

     “It was a great testament to our employees that they would be willing to do that,” Moore says.

     Moore clicks off the ways the Colonial franchise helps BB&T. “We were able to fill out our Florida footprint,” he says. “We were missing south Florida, but we were missing mass in Jacksonville, Orlando and on the west coast. We had 100 branches; they had 200. It changed the whole dynamic of our Florida presence.

     “And we picked up fourth in market share in Alabama,” he continues, adding that BB&T is also ready to test the waters in Colonial’s Texas footprint.

     “It probably doesn’t sound like a John Allison acquisition,” says Moore. “But this was a failed bank. In John’s era, there really weren’t many of those.”

     And while Allison and King are very much alike, the acquisition may show an important difference. “John’s probably a little more of a philosophical person,” Moore says. “Kelly has been the execution person.”

     Moore recounts speaking with Allison on a recent evening when Allison delivered a speech at Queens University of Charlotte. Moore feels Allison’s comments to him were telling.

     “One of the things he’s proudest of is that the company is doing well without him,” Moore says Allison told him. “He had folks who were ready and able to lead the company, even in unprecedented times.

     “That’s really his legacy,” Moore concludes. “He left behind a group that could perpetuate the company.”



Ellison Clary is a Charlotte-based freelance writer.
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