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Doing it his way

When they hired him as PR chief, John Hancock executives didn't expect to see David D'Alessandro at the head of the company. But he's almost there.

It's all razor-trim and corporate at the John Hancock tower at 200 Clarendon Street. Revolving doors spin like tops. Men and women in dark suits are on the move: places to go, people to see, wealth to build. They stride about singly or in twos and threes, glancing at watches of talking on cell phones.

In the lobby, the security man behind the formidable desk calls upstairs to verify an appointment, then offers a metal visitor's pin. After an elevator zips the visitor, express, to the 59th floor, another security man in crisp business attire points to a corner office, outside which a well-dressed secretary says, "He's waiting for you."

"He" is David Francis D'Alessandro, president of John Hancock Financial Services Inc. Inside the large office, a short, broad-built, smiling man steps forward and extends his hand. He has black hair and a mustache with a hint of gray. In his Friday-casual outfit - an open-necked black shirt, blue jeans, a Spanish-style silver-trimmed belt, and casual black shoes - D'Alessandro could be a Silicon Valley entrepreneur holding court in his garage. The contrast with the atmosphere in the buttoned-down lobby is striking.

The 59th floor of the Hancock Tower is no garage of course. It's floor-to-ceiling windows offer panoramic views to the south and east, taking in the ocean, Beacon Hill, downtown Boston, and Milton's Blue Hills. The furnishings are spare and understated: a table-style desk, leather sofas around a wood coffee table, a tall antique clock.

The walls, however, are anything but corporate. They're covered with D'Alessandro's collection of memorabilia, including a red Fender guitar, once owned by Ron Wood of the Rolling Stones, three strands of Abraham Lincoln's hair, Annie Oakley's autograph, and a Winchester lever-action rifle like the one she used, John Lennon's flat black cap, Betty Grable's open-toed navy shoes, and Marilyn Monroe's silver compact. "I like being surrounded by things great people have touched or owned," says D'Alessandro, who once owned a memorabilia store in Baltimore's Harborplace.

First impressions are important, and this one is unmistakable: David Francis D'Alessandro, 40, does not want to look, sound, or act the way others expect him to. He does not like to be confined, cornered, pegged, put in a box. He likes to be different, elusive, surprising, ahead of the wave.

He may be presiding over a venerable insurance company - John Hancock is 138 years old, with 9,000 employees and, in 1999, $126 billion in assets under management and revenues of $10.1 billion - but D'Alessandro is marching to his own drummer. It's a key to his life, and maybe the secret to his success. It follows from a single motive, he explains, as he pops open a bottle of spring water and sinks into one of the leather sofas.

``The objective of my life has always been very simple,'' he says. ``I want the fewest people in a position where they can make me do something I don't want to do. It has always felt unnatural."

D'Alessandro's unconventional approach has worked just fine during his jet-propelled career at Hancock. He was hired as flack-in-chief - vice president for corporate communications - in 1984, and he spent three years revving up the company's advertising and public relations. Then he stepped onto the company's power track, taking over Hancock's torpid group life and health division. Next he took over the retail division, which sells insurance and other products to individuals.

By 1997, he was president of the company, and last year he shepherded John Hancock through its transition to a publicly traded business, which culminated in January with an initial public offering. On June 1, he will succeed Stephen L. Brown as chief executive officer.

The most unusual step in this ascent was D'Alessandro's move from public relations to John Hancock's core business, in which he had no training or track record. It was something almost unheard of in corporate America, especially for the traditionally conservative mutual insurance business. Owned by their policyholders, such companies are safe from irate stockholders and unfriendly takeovers and need not worry about aggressive growth. In the '80s, though, Hancock was trying to raise its profile and become more growth-oriented. When the top public relations job came open in 1984, then-CEO John G. McElwee and president (later CEO) James Morton went looking for someone to brighten up the company's image.

David D'Alessandro, a marketing executive with Control Data Corp. in Baltimore, was on their list. Advertising executive Jack Connors remembers being asked by McElwee, a fellow Boston College alumnus, to check the grapevine on him.

``I put together my alleged network,'' says Connors, ``checked him out, went back to Jack McElwee, and said, `Everything I hear is positive.' '' The search was narrowed to three candidates, and the top brass picked D'Alessandro. ``The others were more conventional,'' says Morton. ``We wanted someone different.''

Different they got. D'Alessandro started by brightening up Hancock's corporate publications and became much more aggressive with the business press, returning calls and getting more favorable publicity. He showed a flair for PR events, such as the release of thousands of balloons at the kickoff of Hancock's $1 million gift to Boston's middle schools.

The most visible change was in advertising. Hancock's old ads focused on the company; D'Alessandro wanted the company's advertising to connect with the customers, and to push the point that John Hancock sold not only insurance but also an array of investment products, including mutual funds, IRAs, and annuities. He asked several ad agencies, including Connors's firm, Hill Holliday Connors Cosmopulos, to submit proposals.

Not long after, Hill Holliday ended a 17-year relationship with New England Life, now New England Financial, to take on Hancock as a client. The result was a more dramatic TV advertising campaign, depicting real people with financial challenges and decisions - retirement, the birth of children, college financing. The ads ended with a quiet slogan: ``Real life, real answers.'' The ads, says Hancock spokesman Stephen Burgay, ``turned the camera around and pointed it at the customer, instead of at us.'' In 1986, Ad Week magazine named D'Alessandro marketer of the year.

While revising Hancock's advertising image, D'Alessandro pushed John Hancock to sponsor the Boston Marathon. By 1985, the venerable race was down at the heels, losing world-class athletes to other races that paid cash prizes. The Boston Athletic Association, which organizes the race, decided it had to find a sponsor and offer prize money.

``We were soliciting proposals,'' BAA president Guy Morse recalls, and ``David D'Alessandro just called up directly and introduced himself. He was new to the Boston scene. He cut right to the chase and suggested that Hancock was interested in becoming the sponsor. It became clear to us that he and John Hancock understood what the Marathon meant to the Boston community and had a good idea of what the BAA needed.''

It needed money, energy, and good publicity. Hancock signed a 10-year agreement, renewed in 1995, and delivered all three.

``What struck me about David,'' Morse says, ``was his direct approach, his freshness in terms of his ideas. It's a lot more than money. They offer 1,600 employees as volunteers, and we work closely with them on media and press.'' Hancock also helps sponsor the US gymnastics championship, competitive figure skating, the Olympics, and other sports events.

Corporate leaders sometimes have a herd mentality; David ??D'Alessandro has broken out of the pack there, too. Early last year, he shocked the sports world by canceling John Hancock's TV advertising for the Atlanta Olympic Games in the wake of the scandal involving bribes paid to members of the International Olympic Committee.

D'Alessandro wanted major reforms and fast. When Olympic president Juan Antonio Samaranch was balky, then promised reforms but did not deliver to D'Alessandro's satisfaction, the Hancock president threatened publicly to cancel Hancock's sponsorship, which would mean a loss of millions of dollars to the Olympic committee running the games.

None of the 10 other US corporate sponsors followed suit, and several reportedly were privately furious at D'Alessandro's outspoken style. NBC Sports president Dick Ebersol fired back in a blistering press conference, calling D'Alessandro ``a bully,'' eager to make ``the big, attention-getting statement.'' Ebersol also criticized Hancock for its own ethical lapses: A Hancock lobbyist had pleaded guilty in 1996 to a count of illegal entertainment of Massachusetts legislators. (A federal judge later overturned the plea bargain and threw out the charge.)

D'Alessandro never blinked. This past February, after the IOC accepted his terms, Hancock agreed to renew its sponsorship, to the tune of $25 million over four years (plus $24 million for advertising). The key was an ethics clause in the new contract, says D'Alessandro: ``If the Olympic movement conducts itself in a manner that is detrimental to our brand, we can cancel our contract at any time.''

It was a PR triumph for Hancock, to be sure. D'Alessandro insists it wasn't tactical but personal. ``I was angry at the IOC because I grew up actually believing in the Olympic ideals,'' he says. ``When they were willing to damage those ideals for chump change, to preserve the way of life of a very small group - and then to have the temerity to lie to me that the image of the Olympics would not be damaged and to basically shunt us aside and say we sponsors didn't know what we were talking about - that goes back to `Don't tell me what to do.' ''

David D'Alessandro's stubborn independence was apparent even in childhood, back in East Utica, New York, where his immigrant grandfather, Vincenzo, owned a small grocery store called D'Alessandro's. East Utica was a largely Italian-American district, something like East Boston, says D'Alessandro, with two- and three-story houses and ``pink flamingos and Virgin Mary statues in the yards.''

The family - David, his older brother and younger sister, and his parents - lived over the store, in ``an apartment about the size of this office,'' he says. He gets up from the leather sofa, rummages in a cabinet, and takes out an old brown photograph from the 1940s. It shows a classic city street-corner grocery store with biscuit boxes, a large scale, tins of soup and olive oil, cluttered walls and counters, bins filled with beans, glass-fronted cases. A small man in an apron and a straw hat - Vincenzo D'Alessandro - poses proudly in the middle of his American dream.

David D'Alessandro remembers going with his grandfather, who lost his sight due to diabetes while D'Alessandro was a child, to visit his Italian cronies: ``We would sit, and my grandfather would ask me to tell him everything that was going on around him. I spoke Italian and English at that time. So I spent my days being a little radio announcer, sitting on my grandfather's lap, communicating, interpreting for him.''

When his grandfather went blind, David's father, Dominick, took over the store. ``My dad was a Phi Beta Kappa, spoke five languages, taught business law and business at the local high school and at the community college, had an IQ of 161.'' Dominick continued to teach while managing the store. His smarts had earned him the nickname Doc, says D'Alessandro, but about one thing he was not smart. ``He was a terribly addicted gambler. Only horses. He never trusted people to bet on: People cheated. I pointed out to him that there were jockeys on the horses, but his attitude was that it still gave the horse half a chance.

``My father would get up at 3 in the morning and open the store, and the meat man would bring in the meat. When my grandfather was alive, they would cut meat and make Italian sausage. So I learned how to cut meat. Then my father would go to school. He only slept two, three hours a night. At night, he would gamble.''

There was strife and shouting at home. Rosemary D'Alessandro couldn't control her husband, so she focused on the children. ``My mother was incredibly tough and strong - very strict. When you're the wife of an addicted gambler, you try to protect your kids from the addiction.''

When he was young, he says, ``I tried very hard to please. Then I realized that no matter how hard I tried, I would not gain approval from my mother. It gave me license to look at things differently. My father used to say, `It must be lonely being you - you look at things so differently.'''

He grew stubborn. When he was about 5, he recalls, his mother forbade him to go fishing with his brother, Richard, who is three years older. He retaliated by scooping her goldfish - eight or 10 of them - out of the bowl with a slotted spoon and leaving them on the counter to die. His punishment that night was a special dish: pan-fried goldfish. Once, when she demanded that he dry the supper dishes, he stood by with his towel but ``accidentally'' dropped the first five or six dishes, until she gave up.

He resisted at school as well. ``I resented the constant discipline of the teachers,'' D'Alessandro says. And he was fired from his first job, as usher in the local movie house, for disobeying orders. ``I refused to break up people kissing.''

D'Alessandro went to Utica College, a division of Syracuse University, graduating in 1972 with a degree in journalism and public relations. As chief of the school newspaper, The Tangerine, ``he was a strong, aggressive editor,'' recalls Ray Simon, a public relations professor, now retired. Simon remembers D'Alessandro asking in class, ``If I go into PR, would I have to do things I didn't believe in?'' Simon told him no. ``If you don't like PR in one place, go to another place where you can do what you believe in.''

Meanwhile, Dominick D'Alessandro's gambling worsened. In 1969, while David was in college, his father got in so deep to mob-controlled loan sharks that paying them off cost the family everything. Looking at the old photograph of the store, his son says, ``We have very few photos in my family, because all our pictures were destroyed when our home and the store were foreclosed.'' The property was not legally foreclosed, D'Alessandro says, but effectively taken by a mob-controlled mortgage holder.

Later, Dominick D'Alessandro was jailed on a bad-check charge. ``He didn't go to jail for long, 60 or 90 days, but it ruined his teaching career. The family broke up.'' David's mother went to Florida, and his father, when he got out of jail, lived in tiny apartments and worked at semi-skilled jobs. David stayed at the college, but when he graduated, he had no home to return to. ``I didn't really have much choice but to go to New York and go to work, because I didn't have anyplace to go.''

D'Alessandro tells the story well, but without any sort of Horatio Alger pride at his own achievements. He only says: ``If I had a choice between being born poor and born rich, I'd take rich. All those life lessons? I'd rather read about them.''

He isn't poor now. David D'Alessandro's compensation as president and chief operating officer of Hancock in 1998 was a little over $1 million, excluding long-term incentives. His future compensation as CEO isn't certain, but Stephen Brown, the current CEO, earned at least $2 million in 1998.

Ray Simon, his PR professor, helped D'Alessandro get a job with Daniel J. Edelman, a New York advertising agency. After two years there, D'Alessandro had a string of marketing jobs for Control Data Corp. and what was then Citibank, now Citigroup. For a time in 1980, he worked for a New York advertising agency, Muir, Cornelius, Moorecq. Robert Muir, who has remained friends with D'Alessandro, was impressed by his intuition about people. ``He knows what people want,'' Muir says. ``It's scary, beyond intuition; his ability to read people is Martianlike, their aspirations, goals, what they hope to attain.''

In 1984, when D'Alessandro was working for Control Data, he heard from a headhunter: John Hancock Mutual Life in Boston wanted someone to take over public relations and internal communications. He took the job.

In 1987, he took over John Hancock's $1.2 billion group life and health insurance division, which provided insurance plans to companies and other organizations. At the time, it was losing $80 million a year. After major cost-cutting and refocusing, it showed a profit of $20 million in 1988. In 1991, D'Alessandro was offered Hancock's retail division - the company's biggest - which sells insurance, tax-deferred annuities, and mutual funds to individuals. From 1991 to 1998, net profit in the division increased from $117.3 million to $337.8 million. After those performances, retired CEO Morton says, ``He was a strong candidate to run the company.''

When asked whose idea it was to put the PR man in charge of group insurance, D'Alessandro says, ``I didn't know. I still don't know. Jim Morton took me to lunch at the Algonquin Club. We're sitting there at this staid club, where the dust flies up with every step, and he's telling me he wants me to take over the group business. It was a terrible pig, losing $80 million a year after taxes. I had never run a business before, but I like to do different things, I like to be stimulated. So we get to the famous macaroons, which is the end of the meal at the Algonquin Club, and we're breaking open the macaroons and having the coffee. I have already agreed to do it. He said, `Do you have any questions?' And I said, `I have one: What's the group business?'

D'Alessandro had taken just one math course at college and no business courses at all, but he proved a quick study. ``He didn't know zip about group insurance,'' says Brown, the chairman and outgoing CEO, ``but within six months, he knew everything about it. And he came back after a year or two and said, `I really think you should sell this business. It's not a very good business.' Now, that was very unusual. Although we didn't take his recommendation at the time,'' Brown says, ``we did eventually sell the business. We admired his candor, his willingness to tell it like it is.''

Not everybody was pleased by D'Alessandro's changes. Insurance was sold mainly through agents, and they sometimes sold policies to poor risks, generating commissions for themselves but costing the company money in the long run.

``Any policy was a good policy,'' says Michael Bell of Monitor Partners, a consulting firm that worked with D'Alessandro on revamping the group health business. ``They were compensated on revenue, not on profitability; compensation was only loosely tied to the performance of the business.''

Agents in the field still do 40 percent of Hancock's business, but under D'Alessandro, sales outlets were broadened to include direct mail, telephone, and Internet sales (online sales last year accounted for 20 percent of direct sales), and agents were expected to sell a full range of Hancock products, not just insurance. The compensation system became more complicated, more directly tied to customer service.

Some agents found the new expectations onerous and moved on. ``Hancock was filled with people who were not needed anymore,'' says one former agent, not a D'Alessandro fan. ``He did a good job cleaning house.''

Not that D'Alessandro's tenure has been entirely smooth. Three years ago, Hancock agreed to pay $350 million to policyholders to settle a class-action suit that alleged unethical sales practices by agents. In addition to the bad publicity over the lobbying case, Hancock was embarrassed last year when more than 400,000 policyholders turned up missing. Since a mutual company is owned by the policyholders, they had to be compensated as part of the initial public offering of stock - but first they had to be found. Day after day of full-page newspaper advertisements listing lost policyholders gave the opponents of demutualization something to sneer about.

Most of the policyholders, or their heirs, were eventually located, and on January 26, 2000, after 138 years as a mutual insurance company, John Hancock issued 102 million shares on the New York Stock Exchange. On the day of the IPO, a banner hung over the exchange, ``John Hancock: A great name comes to Wall Street,'' and Steve Brown rang the opening bell.

The IPO gave Hancock $1.73 billion to use for acquisitions, but it also yanked away the safe and comfortable atmosphere of a mutual insurance company and replaced it with stockholders' no-excuses demand for improved share value. And it cost money: Net earnings fell from $448.5 million in 1998 to $153.2 million last year, mostly because of the costs of demutualization. That was expected, but it was still a blow.

Hancock's goals are ambitious: 15 percent annual earnings growth and 15 percent return on equity. In the short term, the goal is simpler: survival. Everyone expects a shakeout in the insurance industry, and Hancock means to be on the winning side. There are bullies on every street corner. ``It's getting down to the eaters and the eatees,'' D'Alessando said in a recent interview. Under state law, the company is protected from takeover for two years. After that?

``That is one of the trade-offs,'' says Brown. ``You've got to perform. If you don't, the stockholders are going to want you to do something.'' The opening price was $17 but fell below $14 in the following weeks, recovering to $18 by the end of March - insurance stocks aren't very sexy in the age of the Internet. According to Jason Zucker, an insurance company analyst with Banccq of America Securities in New York, says, ``If they fail to execute on their plans over the next two years, they would be vulnerable to takeover.''

Being a business leader means having fingers in all parts of the local power structure. D'Alessandro ``moves in the various power centers of Boston as well as anybody I've ever seen,'' says John Sasso, the veteran Democratic strategist and lobbyist and a friend of D'Alessandro's, who in 1998 helped Hancock and other insurance companies get a bill through the Legislature that permitted the IPO. ``I'm talking about business, politics, sports, and culture; he is involved and active and effective in all of those roles.''

``For someone not born here, he has the most profound understanding of how the city works,'' says Sheryl Marshall, a former stockbroker and Democratic Party activist who now runs a venture capital firm. ``He knows people and knows the tribal nature of the city.''

Besides being chairman of the board of the Wang Center, D'Alessandro is on the boards of Boston University and Partners HealthCare,cq a nonprofit medical group that includes Massachusetts General Hospital. His Marathon and Olympic activities connect him to the sports world, and he is also well connected politically. He has friends in both major parties. He counts former governor William Weld and former attorney general Scott Harshbarger as friends, and though he worked for Michael Dukakis's presidential campaign, he is also a fan of Senator John McCain.

Tribal means family, and by all accounts D'Alessandro takes an almost visceral interest in friends - powerful, powerless, and in between. ``We all have acquaintances,'' says Larry Moulter, former president of Boston Garden and a principal in Woolf Associates, ``but he values his friendships in a thoughtful manner. He will call you when you're down, he will drop you a note.'' One friend who was virtually without furniture after a combative divorce answered the door to find a dining room table being delivered - sent by D'Alessandro.

As he does about most things, D'Alessandro has thought deeply about friendship. ``There are many bad things that can happen to you and yours,'' he says, ``and today everything may be fine, but tomorrow may not be. The time you need to call people and reach out to them is when they're in trouble, not when they're doing well. Over time, a kind of support group has grown up. I am a big believer in helping my friends through difficult times, whether it's financial, personal, or emotional. Somehow, it makes me feel more whole, coming from a family that was so broken.''

Then there's the other side. ``He believes you are judged by your friends and enemies,'' says Bell, of Monitor Partners. ``He knows how to make an enemy. There are people who get annoyed and then forget about it. David doesn't forget. Boston is a small town; it's not unreasonable to assume that the person who is mad at you today will need a favor tomorrow.'

At his house in Weston on Saturday, D'Alessandro comes to the door in more or less the same outfit he was wearing at the office on Friday. The house is an ample, low-key contemporary made of yellow brick, and no pink flamingos are in evidence. Inside, it seems remarkably neat, much like his office - no books or papers are lying about. The living room has a faintly Santa Fe style, with much rough wood in evidence. The yellow-and-red upholstery of an antique couch matches the rug.

A fire crackles while D'Alessandro and his wife, Jeannette, talk softly. Robert, their 20-month-old son, is napping upstairs. Jeannette D'Alessandro, a former public affairs officer at Fidelity Investments, is home with Robert these days. She is slim and blond, dressed in black. She and David met in 1993 and were married in 1996. (D'Alessandro has two sons from a previous marriage - Michael, 20, a sophomore at Hamilton College, and Matthew, 17, a high school junior who lives with his mother in Wayland. D'Alessandro was divorced in 1992.)

Robert wakes up, and Jeannette brings him in; he's a blue-eyed blond whose looks favor his mother's. After we all play ``hide'' with him - a post-nap ritual - we go out to the candle shed, a small wooden building at the edge of the yard, beyond the pool and the hot tub. It's full of vats of beeswax, molds, wax-melting equipment, bottles of scent, and dyes. Jeannette shows off some new white bags with gold printing: ``Candles by the D'Alessandros.''

On one side of the yard is a vegetable patch. David D'Alessandro's giant pumpkins (a secret: he injects the stems with milk) are famous among his friends, as are his tomatoes, which he starts from seed in his garage. He is an avid Italian cook. There's a small orchard out back, with apricots, nectarines, and apples. Also sprouting here and there in the yard, though unobtrusively, are security cameras.

Listening to D'Alessandro, it's hard to imagine anything really getting the better of him. He's the type of guy who, no matter what happens, will somehow land on his feet. But what if business goes south, the stock slumps, Hancock gets taken out by Citigroup or American Express, and he gets the boot?

``I don't know what's next, because being a public company will be enough challenge for a while,'' he says. ``But do I want to be doing this when I'm 60? I don't think so.''

He muses, ``I've spent all my career in businesses that don't make things. I would like to make something that appears, that you can touch and feel. It doesn't matter what - beautiful things. I am so jealous of people with talent. I think of business people as infinitesimal from a legacy standpoint, compared to great artists, musicians, composers, inventors, and great writers. That is what I would love to do.''

For now, of course, D'Alessandro knows where his toast is buttered. ``That's something my dad taught me. Never forget your base,'' he says. Dominick D'Alessandro did not compromise on quality as a businessman, his son says. ``Regardless of whatever follies he got involved in, he never screwed with the store.''

And David D'Alessandro, the grocer's grandson, feels the same way about the transformed John Hancock he will soon be heading: In his world, he says, ``This is the store.''