Randian principal

It's no secret that John Allison, the retired chairman and chief executive of BB&T Corp., is a devotee of author Ayn Rand and the conservative philosophical theory called objectivism.

The theory extols rational individualism, creativity, independent thinking and a limited role for government as a protector of peace. It is most often associated with Rand, who wrote the novels "Atlas Shrugged" and "The Fountainhead" and the nonfiction book "The Virtue of Selfishness."

Allison's passion for objectivism is being felt by a foundation he established called the Moral Foundations of Capitalism, which has provided $1 million-plus gifts to at least 10 universities in North Carolina for programs that typically have had a connection to Rand and objectivism.

And it shone through when Allison said BB&T would not make loans to commercial developers planning private projects on land seized from private homeowners by local governments.

However, Allison gained the most attention from the 14-point letter he submitted to Congress in September 2008. He objected to the $700 billion bailout of the financial-services industry out of concern it might hurt "well-run financial institutions" such as BB&T.

What caught the eye of authors Donald Luskin and Andrew Greta is that Allison chose just two months later to participate in the Troubled Asset Relief Program after receiving significant prodding from federal regulators as part of their effort to make the program more palatable to investors and bank customers. Although Allison had announced his retirement plans before TARP surfaced as a bailout option, his political and moral dilemma reminded the authors of John Galt.

They see Allison as a real-life version of Galt, one of Rand's characters who chose to walk away from the corporate world rather than remain involved in a capitalistic system increasingly influenced by government intervention. Allison had announced his retirement at age 60 in August 2008 — before the breadth of the financial crisis surfaced.

The authors included a chapter on Allison in their book "I am John Galt," which has the subtitle of "Today's Heroic Innovators Building the World and the Villainous Parasites Destroying It."

In the book, which was released in May, the authors give examples of current politicians, economists, business leaders and journalists to match characters in the Rand novels.

Allison could not be reached for comment, but Luskin took time recently to talk about the book and why the authors chose Allison as an example of the Galt character. Here's an edited version:

Q: How long was the book in the making, and when did you decide to do the modern-day characters for the Rand book?

A: I've been working on the book in various forms for eight years, but the Rand character idea was born only about a year ago.

We were conscious of how many people were talking about the similarities of today's real world to the fictional world of "Atlas Shrugged," and realized that some of the similarities were very literal, right down to the level of key individuals.

Q: How did you learn about John Allison for the Galt character? Was it because of his eminent-domain stance that drew attention to his business beliefs or the banking bailout?

A: I follow the podcast series "EconTalk," and at one point a couple years back they did an interview with John. At first I was intrigued that he was an overt Rand disciple.

But when you get into the details of the interview, it's really all about leadership — which means the application of principles to large and small business decisions. BB&T's courageous stance to avoid subprime lending, and to step away from eminent-domain lending, are attention-getting examples.

But the real leadership is in the way Allison drives the philosophy down to the level of every employee and interaction.

Q: How common is it among business leaders to be Rand devotees? Is that another reason why he stood out to you?

A: Many business leaders are Rand devotees, or at least have been inspired by Rand. Also many highly achieved people in other fields, including the arts.

What is unusual about Allison is he is so open about it, given how controversial Rand can be, and how literally and thoroughly he applies the philosophy day by day.

Q: It has been said that Allison's personal views and BB&T's corporate philosophy were inseparable. Were you surprised that was the case, and that not only did BB&T management and employees buy into it, but so did investors?

How much of a factor were they in BB&T's ability to stay away from toxic mortgages and stay profitable throughout the financial crisis?

A: After interviewing Allison, I interviewed his executive team and a number of lower-level employees. The buy-in seems to be deep and pervasive.

And why not? Allison and his core team agreed on the values 25 years ago, and have been consistently and clearly espousing them ever since. That attracts employees who agree, and repels employees who disagree. After a quarter century, they have established a culture of great coherency, and in business, that is a great power.

The key is that these views are not just Allison's personal quirk. He got deep buy-in from the beginning from his whole core team, and then that filtered down to everyone. Great proof of that is the fact that the decision not to write mortgage loans of the type that are now called "toxic" was made by a fairly low-level executive without even consulting Allison.

Q: What did you learn about Allison that surprised you? That stood out to you?

A: Allison exudes leadership. To meet him is to want to work for him. His moral clarity is absolute and inspiring.

But many leaders have this charisma. What makes Allison unusual among leaders is that his philosophy is one of realism — not phony idealism. It's all about excellent individuals making personal contributions to a joint effort — for the purpose of making profits, not saving the whales. Allison candidly says, in effect, a team is made up of people, each of whom is an 'I'. We insist that you be an individual, and that if you want to be on the team, you have to voluntarily buy into the mission we have all chosen to share.

But the end is the mission, not the team.

Q: With Allison no longer running the company, is there a risk the next generation of leaders could deviate enough from objectivism to go astray and take on riskier ventures for the sake of growth?

A: I met with Allison's successor, Kelly King. He is not so much a Randian as Allison. He is a more religious person, and objects to Rand's atheism.

But he has deeply bought into the business principles that Allison derived from Rand, and he's been with Allison since the beginning on this. So I am pretty sure there will be continuity.

Q: What can Allison's approach teach the next generation of business leaders, especially during an economic time of such structural change?

A: The key lesson of Allison's success is that if you get the basics right, the details will follow, and you will run your business right. If you get the basics wrong, you'll eventually make a fatal mistake in the details.

Remember, the big banks that were destroyed by subprime weren't necessarily engaged in that as a major business line. It just blew up so spectacularly it swamped everything else. It was a lethal detail.

A solid philosophical platform inoculates you against that kind of thing.