John Battelle: I met this woman a few months ago and was deeply impressed, not only with
her, but I just had no idea the work that this company does.
As with Hadi Partovi, I wanted to go out on some positive uplifting sensibilities.
Please join me in welcoming the senior vice president of Diversity and the head of The
Prudential Foundation, Lata Reddy.
[applause]
John: Welcome.
Lata Reddy: Thank you, John.
Thank you, John.
It's great to be here.
I'm going to talk about how it is that a legacy company makes the shift to this new vision
of capitalism that we've been talking about.
For us at Prudential, the new vision is really rooted in the past and in the belief that
everybody should have the opportunity to be financially secure.
Our story began over 140 years ago when our founder John Dryden had a radical idea.
He wanted to offer life insurance to working families.
That went against the common business wisdom at that time because the prevailing belief
was that working families could not afford to pay premiums, and worse, couldn't be trusted
to pay premiums.
Why would you engage in a market where you weren't likely to make a profit?
He saw in that market hard working families who are faced with desperate choices.
When they lost a child or a partner or another loved one, they didn't have the financial
means to bury them.
It's a choice between a pauper's grave and the indignity of that or going broke.
He decided to change that.
He created an insurance product that was affordable, specifically burial insurance, which he sold
for as little as three cents a week.
In that one act, he created an inclusive market that allowed working families to have the
same opportunity to achieve financial security as everybody else.
In that sense, Prudential was a disrupter.
Back in the day, they disrupted the insurance model as it existed then and did so in a way
that unlocked both commercial benefits and societal benefits.
This quote here...I have something that our founder said soon after the company was founded.
"The justification of the Company's existence is the advancement of the efforts of its policy
holders and their families for better economic and social condition."
Prudential was founded on that single idea.
You'll all recognize that idea, it's the original charter of business.
The business should be in the business of more than just generating profits.
It should drive progress.
Over the 140 years plus that we've been in existence, we've tried to adhere to that,
adhere to that belief that everybody should have the opportunity to achieve financial
security.
While the why of it hasn't changed, our purpose and our North Star, our mission has remained
the same, but the what and the how have.
That's because in this era where we're seeing the disruptions that we're seeing across industries
and the changes in labor markets and financial markets.
We're seeing risks being transferred from institutions to fragile household balance
sheets.
That requires companies like ours to go to market in very different ways.
Ways that are more holistic, that account for the needs of a broader swath of the population.
What that also means is that things like corporate social responsibility are no longer things
that can be done off to the side.
It can't be about how we spend the money we make.
Fundamentally, it has to be about how we make our money.
To operationalize that at Prudential, we take an inside out and an outside in perspective.
What that means is we take the expertise that we have within our company and our core capabilities
across our business model and take that outside into the world to address major issues.
Then, we bring outside expertise and perspectives into the four walls to help inform the decisions
that we're making.
I wanted to give just a few examples of how we bring that to life.
The first is in our hometown city of Newark, New Jersey.
Prudential was founded in Newark in 1875 and we have probably remained headquartered there
ever since.
We stayed through good times and through bad and when others left.
When we stayed, we made the affirmative decision to invest in both people and place.
We do that in partnership with the whole set of actors across sectors.
One example is in work we're doing to lead a coalition of our fellow anchor institutions
since we've expanded that definition of anchors beyond the classic Eds and Meds to include
other institutions like corporations, who have proven commitment to the community and
deep roots in the community.
We've gathered our colleagues to enact a three-pronged strategy.
That is buy local, hire local, and live local.
Buy local refers to us diverting some of our procurement dollars to businesses in Newark
in procuring goods and services from them and pumping millions and millions, if not
billions, of dollars into the local economy which will create jobs and all the attendant
things that goes along with that.
The hire local is how do we prepare Newark residents for the jobs of today and the jobs
of the future and how do we create pathways of opportunity to a large employers that are
in town.
Live local is a program to incent our own employees to live in the community and thereby
invest their own resources in the community and, hopefully, create a bit of a flywheel.
Another example is an outside in perspective.
That is a platform that we've created within Prudential that we call inclusive markets.
That allows us to bring our partners from the outside world who are experts and have
deep insights into consumer needs.
To allow them to engage with our business leaders to brainstorm.
To think about opportunities to partner in ways that Prudential can expand its addressable
market in ways that simultaneously creates societal benefits.
One example of an outcome of that work is work that our individual life insurance business
is doing with Mission Asset Fund, which is a non-profit here in the Bay area.
Mission Asset Fund works with immigrant communities and the Latino community to help build wealth
in essence.
They do that through a number of initiatives.
One is through lending circles.
I'm sure you're all familiar, small groups of people who come together to informally
save and to borrow.
Mission Asset Fund helps the members of these lending circles to build credit at the same
time.
They're engaging with our insurance business to think about or to better understand the
financial needs and the unmet financial needs of the participants of these lending circles.
Once we have that information, we can then identify opportunities to manufacture products
or create services that meet those unmet needs.
So, early days but potentially really interesting and promising results that could come from
that.
The third example and my final example is both an inside out and outside in.
That is a partnership that we created with Prudential's real estate investment business
called PGIM Real Estate and YouthBuild International which is a global NGO that works with opportunity
youth.
If you're not familiar with that term, opportunity youth are young people between the ages of
16 and 24 who are not formally employed and not in school.
YouthBuild works with them to train them in a variety of trades, primarily, the construction
trades.
Prudential has been ramp funding YouthBuild for over 20 years and helped them open chapters
in various parts of the world.
We're obviously pleased with results because we kept supporting them.
We also recognize that there's an opportunity to really boost the impact that they were
having with their graduates and helping them to land a quality job.
We turn to our real estate investment business who have partnerships with the largest developers
and contractors in the world.
We're a development based business in many countries.
We're actually building major assets.
Therefore, we have this partnership network.
Our partners, who are values and line partners, I'm happy to say, raised their hands pretty
quickly.
We have been able to place 20 YouthBuild graduates in these construction sites with these partners.
Admittedly, it's a small number, but it's early days.
Given the number of partners we have and the needs that they have, we think there's some
ability to take this to scale.
I wanted to show you a brief video that highlights this partnership.
[video begins]
Man: I want you to think about all the hard work it's going to take and give it all you've
got.
You bet?
Crowd: Yes sir.
Man: You bet?
Crowd: Yes sir.
Man: When I put my mind to it...
Crowd: When I put my mind to it...
Man: I'm a serious force.
Crowd: I'm a serious force.
Male Participant: I didn't fit into high school at all.
Female Participant: I was expelled from school.
Male Participant: I was rebellious, really angry.
Female Participant: If it wasn't for YouthBuild, I would have either been dead or in a county
jail.
Male Participant: The primary thing we look for in young people when they apply to YouthBuild
is have they had a conversation with themselves that they're ready to start to make changes
in their lives?
Male Participant: YouthBuild teaches the core academic skills.
They go through all the regular classes, their maths, science, social studies, English.
We also do a construction program.
Within the construction, there's leadership lessons embedded in there.
They're really wanting to make something out of themselves and step into any office, any
construction work, and make an impact.
[background conversation]
Female Participant: It's a big satisfaction for them when they finish.
They say this is the first diploma I have got in my life.
Lata: Prudential saw an opportunity to deepen our partnership with YouthBuild by bringing
them together with PGIM Real Estate and leveraging relationships that they have with some of
the largest developers around the world.
Male Participant: Social programs like this are not incompatible with having a benefit
to the business overall.
We felt that connecting the graduates from the program with some of our real estate investment
construction activities would make a lot of sense.
Lata: We're living in an era where people want to work for, do business with, and invest
in companies that have a sense of purpose.
Male Participant: For the communities that we work with, we had to give back.
Beyond just making pure investments, we have to be responsible for the success and wellbeing
of stakeholders in the community.
Female Participant: We are giving them the second chance, but I think this is also a
second chance for us as a society that they can have a better life.
Female Participant: Every day is going to get better because when you graduate, it's
going to be the most amazing feeling of your life.
[sobs]
[applause]
Male Participant: I started being more committed.
I realized I can have a second chance.
Male Participant: I'm excited about my future.
I can go to college.
Female Participant: I went from negative to positive, from no one to someone.
Man: World.
Crowd: World.
Man: Look out.
Crowd: Look out.
Man: You got me yesterday.
Crowd: You got me yesterday.
Man: But this is a new tomorrow.
[video ends]
Lata: It's hard not to be inspired by these young people.
We are so committed to the work that YouthBuild is doing.
We know all of these takes time.
It takes patience and it takes patient capital, but playing the long game is what we're built
for.
We're lucky in that regard.
Our company is in the business of making and keeping long dated promises.
We do that all day long.
These are promises that last over decades and even lifetimes.
These promises are rooted in opportunity, the promise of opportunity, the promise that
our customers can become financially secure and that the generations that come after them
can prosper.
That's the social compact that we are founded on and we try to adhere to it today.
I suppose, most importantly, we understand that it's only by adhering to that compact
that we will be able to generate the long term value that we're trying to strike, that
we're seeking for all of our stakeholders, and to enable us to be an ongoing, sustainable,
and viable business.
Back to the future we go.
Thank you.
[applause]