State Farm exec urges students to high standards

Published 12:00 am Thursday, February 15, 2007

Describing himself as a prankster at heart who loves to share humor with people, State Farm Insurance Regional Vice President Lee Baumann spoke candidly to students attending the Gordon Ford College of Business Ethics and Leadership lecture Wednesday in Grise Hall Auditorium at Western Kentucky University.

Baumann, who began his career at State Farm more than 30 years ago, said in business, ethical problems that are considered &#8220no big deal” at first quickly turn into &#8220big deals,” just as in life.

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Besides pointing to the more obvious examples of Enron and Adelphia – companies that falsified financial statements – Baumann told the personal story of his son, Chris, to make the subject more pertinent.

Baumann said his son began with outward expressions of piercings and tattoos before &#8220big issues” arose, necessitating that his son join the Army to learn discipline.

Baumann said his son has now found his way as a public defender in Arapahoe County, Colo.

Baumann described ethics as an inner sense of &#8220knowing better at what is best to do,” and was something business people have a moral obligation to have.

Baumann’s personal advice to students was to &#8220Think about what is the big deal and handle it,” he said.

&#8220Ethics, to me, comes down to your personal judgment of right and wrong,” Baumann said.

But for 20-year-old junior Glen Lafferty, a corporate organizational communication major from Paducah, Baumann’s description of being &#8220ethically sound,” was almost too general.

Companies should be as up front as possible about ethical or moral expectations, Lafferty said.

&#8220If you don’t have something in place, you’re taking on a risk,” Lafferty said. &#8220If you’re going to have expectations, you have to set forth guidelines.”

In response, Baumann said that State Farm has every agent sign a code of conduct agreement that outlines what is expected.

Maggie Lee, public affairs specialist for State Farm, said that its 68,000 regular employees, 17,800 agents, along with about 40,000 employees of agents all sign the agreement, which covers the proper use of company property, information security and other topics.

Baumann said an example of State Farms’ moral expectations can be found in the company’s philosophy about handling insurance claims.

&#8220We will pay every dollar we owe, not a dollar more or a dollar less,” Baumann said.

Ralph Dillihay, a local State Farm Insurance agency field representative, said because ethics and having morals are frequently visited at the company, it’s easy to recognize an exception to behaviors that are meeting expectations.

&#8220It will stand out,” Dillihay said.

When it comes to leadership, Baumann said you have to realize the possibilities.

Baumann passed out $2 bills bearing President Thomas Jefferson to prove the point, joking that it was his subtle form of bribery for students to come and work for State Farm, which is the nation’s leading home and auto insurer, ranked 22 on Fortune Magazine’s list of 500 largest companies.

&#8220When you talk about leadership, Thomas Jefferson knew about possibilities,” Baumann said. &#8220You have to dream about the possibilities. Think about personally what that means to you and the opportunities that await you.”

Baumann said some organizations will require employees to move around in order to meet goals and get opportunities.

&#8220There are prices to pay,” he said.

Baumann said he made several moves around the country with State Farm, from Nebraska, then South Dakota, to Louisiana, then to Bloomington, Ind., putting his children n three different high schools in a three-year period.

When thinking about where to work after college, there are many things to consider, according to Baumann.

&#8220Find an organization where you can be yourself, where you can be comfortable,” he said.

Baumann said to look at an organization’s leadership and find someone who models integrity and is a visionary.

Find a company who will invest in its employees and where work will be rewarding, Baumann said.

&#8220Fall in love with your future,” Baumann said. &#8220Feel good about what you want to do and pursue that with great vigor.”