Happy Veterans Day

Soldier To CEO
Retired general leads USAA through economic chaos, emerging with renewed mission to recruit more veterans.     
By Dan Fazio

Josue “Joe” Robles Jr. took over as president and chief executive officer of USAA on Dec. 11, 2007, the same day that Vikram Pandit was named CEO of Citigroup. The turbulent months since then have left the two executives and the financial services corporations they lead in very different places. USAA Cover

Robles, a retired Army two-star general, led USAA through arguably the most devastating year the U.S. economy has seen since the Great Depression and emerged from 2008 with a profit. His counterpart at Citigroup didn’t fare so well. The conglomerate posted more than $28 billion in net losses in the past five quarters, despite government injections of $45 billion into the listing financial giant. In January, Citigroup announced it would shed a third of its assets and lay off more than 50,000 workers.

“I often use him (Pandit) as my benchmark, that we took over on exactly the same day,” Robles said. “Fast forward a year, and he’s had a horrible year. I often thought about it, here’s this poor guy, we’re together down this road and he is getting a lot more pressure than I’m getting from my board. We’re performing a lot better than Citigroup.”

USAA’s year was much better. The member-owned Fortune 200 company turned a profit, kept its work force intact and added new members despite the meltdown of the U.S. financial markets, a deepening recession and a record year of storms and catastrophes that stretched the company’s insurance services.

“We are holding our heads high, because that was no mean feat in 2008,” Robles said. “But it made for some long days and some sleepless nights.”

The financial stability of USAA in the deepening economic gloom is good news for transitioning service members who are looking for a new career in a tough civilian job market. A perennial contender on the G.I. Jobs Top 50 Military-Friendly Employers® list, USAA ranked fourth in 2008. Because USAA focuses almost exclusively on serving the military community, the company’s leadership is top-heavy with former military troops who are looking for transitioning enlisted personnel, NCOs and officers to fill its ranks. Last year 21 percent of the new employees USAA hired had military experience. More than 17 percent of its work force of 22,000 is made up of veterans, military spouses and members of the National Guard and Reserves, and 61 percent of USAA employees with military experience works in customer contact jobs. It’s a partnership that makes sense: Who better to serve the military community than veterans?

“They know our market because they are our market,” said John DiPiero, a retired Air Force colonel who now serves as USAA’s military talent manager. “They’ve lived the lifestyle and know what products and services resonate with our members. Their core values also align with ours: service, loyalty, honesty and integrity.”

Even in 2008, USAA saw a steady growth in membership, products, assets and employee productivity. The company’s growth only sharpens its appetite for military veterans.

“And so I’m upping the recruiting goals to bring more of those kind of people into the company,” Robles said. “And we’re going to keep increasing that percent year over year over year because we’re actively looking.”

Started by the Military for the Military
USAA has been focused on the military since its inception in 1922, when 25 Army officers met at a San Antonio hotel and pooled their money to self-insure their vehicles. Formed as the United States Army Automobile Association, the insurance company opened membership to officers in other branches of the military in 1924 and changed its name to United Services Automobile Association.

USAA expanded its services over the years to include banking and investment, and the company was one of the pioneers of direct marketing. In 1996, the San Antonio-based company opened membership to enlisted personnel and NCOs. Today USAA serves more than 7 million members, including military officers,
enlisted personnel, former military and their families.

Weathering the Storm
Robles, a draftee who served in Vietnam and rose through the ranks to command the Army’s fabled 1st Infantry Division in the early 1990s, retired in 1994 as a major general and joined USAA as special assistant to the chairman that same year. A tall, soft-spoken man, the former Army budget director was named chief financial officer and controller in September 1994. Robles was named president and CEO in December 2007.

John Moellering, a retired Army lieutenant general who now serves as USAA’s chairman, said the board didn’t have to conduct a worldwide search for a new leader. “It became obvious to me that we weren’t going to find a better person anywhere than Joe, so I strongly urged the board of directors to make him the permanent CEO, which they did – it was unanimous. Everybody agreed totally that he was the best person that anyone knew of in the United States or anywhere to run this great company,” Moellering said.

As CFO for 13 years, Robles knew better than most how bad the economy was getting in late 2007. He quickly shared that concern with his management team and employees. “When I first took over, I kept telling our employees and our board, ‘I don’t care what they say, we’re in a recession. And it’s going to be a long recession and it’s going to be a deep recession.’ So we had to tighten things up,” he said.

USAA, which owns or manages $126.7 billion in assets, had a natural advantage over its counterparts because of its longtime conservative investment strategy. The company avoided the risky sub-prime mortgage investments that brought down so many other financial institutions.

The company took further steps to protect itself as the economy worsened in 2008 by adjusting its work force and spending, diversifying its holdings and tightening credit for members.

“We were positive in our earnings, we grew our net worth, we grew our assets, and few financial services companies in America can say that at the end of 2008, Robles said.”

Still Hunting Military Veterans
While most of the large financial services companies in America that survived 2008 have cut tens of thousands of jobs, USAA is determined to increase the number of veterans it employs. “We want people who have discipline, who have core values, who want to be productive citizens, who want to do what’s right,” Robles said. “And so, they (military veterans) are very attractive. I think all across America, they ought to be something that companies go after.”

USAA recruiters comb the country looking for transitioning members of the military to hire.

“We’ve established goals for 2009 to not only increase military and spouse presence, but are also focused on specific segments such as junior military officers, wounded warriors and junior NCOs,” DiPiero said.

USAA Seeks Wounded Warriors
Brian Neuman found a home at USAA last August. A retired Army staff sergeant who lost his left arm when a rocket propelled grenade ripped through his Bradley Fighting Vehicle in Fallujah, Iraq, in 2004, Neuman was working for the Wounded Warrior Project when he heard USAA was preparing to launch a program to recruit wounded veterans. He was hired to lead that program and is now one of three full-time military recruiters for USAA.

“I had no idea what the corporate world was all about, but I knew from the moment I walked in the door that this company is focused on serving service members,” said Neuman, one of 14,000 employees who work at USAA’s 286-acre headquarters campus in San Antonio.

Neuman attends job fairs, transition classes and wounded warrior events at military bases to recruit wounded veterans of Iraq and Afghanistan. He also helps coach candidates before their interviews and encourages them every step of the way. For Neuman, helping other wounded veterans rebuild their lives has given his own life a new focus. “I decided to use my injury for something positive,” Neuman said.

USAA Still Needs You
USAA’s efforts to recruit transitioning military members will continue in 2009, despite the worsening economy. The company’s financial stability will allow its recruiting teams to search the country in an effort to find transitioning military – the one
segment of the population that can best relate to USAA’s customers in the military community.

“We’re really proud of all of our people. Some companies go out there and try to improve profit and focus on the bottom line,” Moellering said. “We really focus on our employees because we believe firmly that if you take care of the employees they’ll take care of your customers, and the customers will take care of the bottom line.”


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