A decade after retiring from insurance giant State Farm, former CEO and chairman Ed Rust Jr. is talking about the value of a liberal arts education in the field of business.
Rust was the inaugural speaker of Illinois Wesleyan University's newest speaker series, featuring influential business leaders. It's called the Kinder Brothers Speaker Series — named for alumni Jack and Garry Kinder, founders of Kinder Brothers International.
Rust, a 1972 IWU alum and current member of the board of trustees, spoke Monday at IWU in a speech titled, “Liberal Arts: Value from a Business Perspective.”
“Liberal arts, especially in today’s world, are a critical set of tools to help you better understand and articulate positions on issues that we are dealing with,” he said. “The communication, critical thinking, all of these things are important in getting your point of view across.”
Rust said one of his favorite values remembered from his time at IWU was the practice of healthy debate — where each side is heard and assessed equally.
Another key skill is communication.
“Whether rallying a team, persuading a shareholder or articulating a vision, leaders must express themselves with clarity, conviction and authenticity,” he said during his speech, adding being a leader means valuing every opinion in a room — and just because someone speaks the loudest, it doesn't mean they are correct.
“The human aspect of business is critically important,” Rust said. “In reading the audience, in reading the room, in reading the people, how do you get the best out of them?”
He said the quietest person in the room just might have the million-dollar idea.
However, not everyone places the same value on a four-year college degree as Rust. Many institutions, IWU included, have put more distance between themselves and liberal arts, in favor of a more work-ready perspective.
Rust said both have merit.
“I’d have to say it’s a blend of both, because we’re finding with technology that even if I’m trained in a trade today, those skill sets will likely be partially, if not totally obsolete in a number of years,” Rust said. “From a liberal arts learning college, it helps you make the transition from the way the world or things work today to the way it is working five years from now.”
Another point Rust made in his speech is that students and faculty should explore places beyond Bloomington-Normal.
“Bloomington-Normal, McLean County, it’s my home, I’ve lived here for over 70 years. Bloomington-Normal as great as it is, it’s not the center of the universe,” said Rust. “I was fortunate enough in a business career ... to travel, to be elsewhere in the world, to realize really the growing phenomenon of globalization that has occurred over the last 30, 40 plus years.”
Rust said exploring the world gives a perspective that is otherwise absent to someone who never leaves their home, adding it allows you to see the world differently.
“To develop deep appreciation for differences in where those differences may well meld into more constructive programs, or approaches to some of the challenges we face,” he said.
State Farm
In just 10 years, State Farm has undergone many developments since Rust retired. The company also has weathered new storms, like the recent public attack by Gov. JB Pritzker calling for a state body to regulate the insurance giant’s rate changes.
In an interview with WGLT, Rust said Illinois being one of the few states that does not require the state government’s approval for rate changes is exactly what makes it so attractive for insurance companies.
“From the time I entered this industry over 50 years ago ... Illinois has been the beacon of innovation when it comes to insurance regulation,” said Rust. “You look at the 49 other states out there, clearly Illinois is a more viable marketplace because when you can price according to what the experience is. If things are looking better, you can lower rates and with the expectation that if things deteriorate or the trends were not as positive as you thought, you can come back and adjust rates up or down.”
Rust said if insurance companies are required to get state approval, they will be less willing to change rates, especially to reduce them for consumers. As for the current rate hikes, Rust credited inflation and rising prices as the main contributors.
“I understand the emotional side of it, and particularly with the recent discussions here in Illinois around homeowners,” he said. “All you have to do is go through a lumber yard, home center and look at the price of lumber … copper wire, electrical equipment, lighting, all of that has seen significant increases in price in the last couple years.”
If Pritzker follows through on his call-out of the State Farm, Rust said it would not “even be in the cards” for the company to leave Illinois — its roots are in Bloomington-Normal, but it would make it more challenging to do business and hurt the economy.
State Farm also has expanded and developed outside of Bloomington-Normal since Rust left the helm, with larger corporate hubs in other areas of the country. Rust said Bloomington will always be the company's home, but it is not afraid to venture out in the name of better business.
“You have to look really where the market and the growth is … you have to go where the growth is,” he said. “Some of what we did with the hubs and looking at that across Atlanta, Dallas and Phoenix is going where you’ve got some of the specialized workforce that you need. You’ve got to grow and adapt.”
Autonomous vehicles
When Rust spoke previously at IWU as the head of State Farm, he said fully autonomous vehicles would not come to fruition. As electric vehicles and companies like Tesla advance, the automotive industry is closer than ever before with options like autopilot technology.
Rust said he holds to his previous claims and does not think fully autonomous vehicles will make it to major roadways.
“I’m not sure an autonomous vehicle is smart enough to read all of the — people will be upset when I say this — crazy drivers that are on the road,” he said. “I used to make the example, can you imagine driving down Veterans [Parkway] and you’re sitting in your autonomous vehicle and enjoying yourself and all of a sudden, a car swerves or what in front of you, that all of a sudden all the cars around you, including yours, can orchestrate a non-impactful stop? We’re not there yet.”
Rust said it is an interesting dilemma for insurance companies. He said while cars today have exceptional safety features, it is a double-edged sword when it comes to repairs.
“The ability to repair that and bring it back to assembly line-quality alignment is extremely difficult,” he said. “Body shops are challenged to have the trained technicians and the equipment to be able to do that, and when you come in to align how many different sensors and cameras and stuff on your car, you can get it back from the shop and you’re still working … on the technology to get it to work right.”
