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By the end of his first year as CEO, President and Chairman, Herb Allison had initiated a transformation at TIAA-CREF (Teachers Insurance and Annuity Association - College Retirement Equities Fund). Through an extensive self-evaluation process named Decisions 2003, the company had reviewed its relationships with its customers and redefined its goals and its culture, at least on paper. As conceptualized, the shift was profound — Allison and key managers had set a course to redirect one of the world’s largest and most respected providers of pensions. Their goal was to transform the company to be a manager of customer relationships as well as a manager of assets.

Senior management recognized that implementing the Decisions 2003 recommendations would be a multi-year process. However, they felt that an immediate start was essential to the company’s success. There were predictable challenges, and unanticipated obstacles would inevitably arise. Allison was confident that the goals were appropriate, and that the employees were capable. But he also knew that it was a risky process. As he put it in 2006, three years into implementation:

The jury is still out on whether all this is going to work. There are really encouraging signs, but implementation is key. I think that what is often ignored in managing is that the key to success isn’t simply strategy. Most companies in the same industry have similar strategies. It isn’t necessarily just the quality of people, because the quality may also be similar. It’s the ability to generate true teamwork, candor in the organization, a meritocracy. Most importantly, it’s the ability to implement effectively and to tell ourselves the truth about what is and isn’t working.

Summing up he added,

To accomplish any less than a total transformation of this organization would not lead to success. I think that most companies, even great, venerable ones, see the need to change, but they’re not always willing to come to grips with reinventing their entire business model to keep pace with their clients’ evolving needs.

The changes were intended to be just the beginning of an ongoing, continuous evolution to keep TIAA-CREF aligned with evolving customer needs. One thing was certain: TIAA-CREF could never return to its “sleepy” past.

Published Date: 07/12/2006

Suggested Citation: Jean W. Rosenthal, Jaan Elias, K. Sudhir, and Joel Podolny, "TIAA-CREF (B)," Yale SOM Case 06-019, December 7, 2006

Keywords: Teachers, Customers