Killinger, Kerry K. 1949–
Kerry K. Killinger
Chairman, president, and chief executive officer, Washington Mutual
Education: University of Iowa, BBA, 1970; MBA, 1971.
Family: Married Debbie Roush.
Career: Bankers Life Insurance Company of Nebraska, 1972–1975, investment analyst; Murphey Favre, 1976–1982, securities analyst, then executive vice president; Washington Mutual, 1983–1986, executive vice president of financial management, investor relations, and corporate marketing; 1986–1988, senior vice president; 1988–1990, director; 1990–1991, president and chief executive officer; 1991–, chairman, president, and chief executive officer.
Awards: Executive of the Year, Puget Sound Business Journal, 1997; Banker of the Year, American Banker magazine, 2001; Thomas Medal of Achievement, Fred Hutchinson Cancer Research Center, 2002; Educational Distinguished Leadership Award, Alliance for Education, 2004.
Address: Washington Mutual Bank, 1201 3rd Avenue, Seattle, Washington 98101; http://www.wamu.com.
■ Under the leadership of Kerry Killinger, Washington Mutual grew from a little-known regional thrift to a national savings institution and lender, servicing more than 10 percent of the U.S. mortgage market. The company became the national leader in mortgage servicing and originations, with a loan portfolio of nearly $750 billion. Underlying this amazingly fast growth was Killinger's focus on servicing the blue-collar and lower-end white-collar markets, which had often been underserved or overcharged by more traditional banking organizations. Killinger, a slight, quiet man, born and raised in Iowa, had the self-professed goal of reinventing how people thought about banking.
During his early career, Killinger worked as an investment analyst for Bankers Life Insurance Company of Nebraska, then moved to the state of Washington to work as a securities analyst at Murphey Favre, a brokerage house. While living in Spokane, he spent evenings and weekends fixing up rundown properties around town, housing his family in a mobile home to keep personal expenses low. He systematically sold off a property every two months for several years and used his profits to purchase shares of his employer. In 1982 he brokered a deal to sell Murphey Favre to Washington Mutual, then a thrift in Seattle with $2.7 billion in assets. The deal earned him the position of executive vice present of financial management, investor relations, and corporate marketing. As Killinger rose through the executive ranks of the bank, he utilized what employees described as a genuine, down-to-earth management style to begin moving the regional bank into the national spotlight.
THE ART OF THE ACQUISITION
When he took the reins in 1990, Killinger put his growth plan into full gear, undertaking numerous acquisitions and transforming Washington Mutual in the process. At a time when bank and brokerage takeovers often failed, Killinger developed a successful approach to these deals. First, he picked targets that would make Washington Mutual an instant market leader. Thus, Killinger ensured that the deals would give the bank greater market clout and efficiencies and avoided having to formulate a justifying strategy after the acquisition was made. Second, Killinger insisted on working with sellers whose values matched his own, which resulted in a good fit once the two companies merged.
A third Killinger strategy was to make quick and blunt decisions about management, with executives from Washington Mutual clearly taking charge after the deal closed. Although less-senior executives of acquired companies often were offered great career opportunities, those at the top remained consistent. Killinger also smoothed the transition of the acquired businesses into the Washington Mutual organization by giving existing frontline management important functions in the assessment and integration process. He saw this as more efficient use of the company's talent than relying on a specialized team created specifically for the acquisition deal. Killinger was known for closing deals quickly and immediately seeking, in person to win the new employees' trust. This hands-on approach resulted in Killinger meeting over 11,000 of his new employees in the year following a particularly aggressive acquisition period.
Finally, Killinger vowed to keep growing internally, even as acquisitions occurred. This consistent focus on the day-today tasks ensured that the company did not become so reliant on acquisitions that it abandoned its core business, and it helped investors remain confident in the underlying value of the bank. By combining acquisitions and internal growth, Killinger was able to meet his earnings-per-share goals. Despite his best efforts, however, Washington Mutual's explosive growth did not come without some growing pains, such as late property-tax payments, bungled escrow accounts, and lost mortgage payments. However, by removing inefficient vendors and developing its own customer system, Washington Mutual has greatly reduced these issues.
BANKS OF THE FUTURE
Washington Mutual developed a new style of bank, which Killinger saw as having the feel of a comfortable department store. There are no teller windows or velvet ropes, but there is a WaMu kids corner where children can play while their parents do their banking. The look and feel of the bank is internally called occasio, which is Latin for "favorable opportunity." A central aspect of the occasio approach is the teller tower, a pedestal where sales associates stand before screens to direct transactions. Although tellers handle no money (customers needing cash are sent to machines), they do have excellent opportunities to get to know their customers personally. This interaction greatly increases the chance of cross-selling products and building customer retention in the process.
Killinger applied retail approaches and philosophies to banking in order to achieve high-quality customer service, as could be seen not only in the appearance of bank branches but also in the way the company managed its associates. Killinger liked to hire employees with a retail, rather than a banking, background. He allowed control of branches to originate at the local level, giving a branch the freedom to style its products and staffing mix to the market it served. Killinger also promoted the use of unusual ideas, urging his employees to "think outside the vault."
See also entry on Washington Mutual, Inc. in International Directory of Company Histories.
sources for further information
Anders, George, "7 Lessons from WaMu's Playbook," Fast Company, January 1, 2002, pp. 102–107.
Morris, Kathleen, and Seanna Browder, "Washington Mutual's CEO: Energizer Banker," BusinessWeek, July 14, 1997, p. 54.
Neurath, Peter, "All the Right Assets," Puget Sound Business Journal, December 26, 1997.
Tischler, Linda, "Bank of (Middle) America," Fast Company, March 1, 2003, pp. 104–109.
—Michelle L. Johnson