Divide & Multiply

Last week Chicago was promised its first skyscraper in nearly 20 years. As part of its decentralization program, the $9 billion Prudential Insurance Co. of America, third largest U.S. company,* announced that it will establish an independent home office in Chicago, house it in a 35-story building over the Illinois Central's tracks on the downtown lake front. Estimated cost: $30 million.

To Prudential's President Carrol Mcteer Shanks, 52, this seemed like a fair price to pay for a new office in the Midwest, where Prudential hopes to tap the area's one-third of all U.S. farm incomes, the $30 to $50 million auto industry, the meat-packing industry.

This direct approach has always made sense to Carrol Shanks. To get himself through school, he worked as a pipe fitter's helper, as a laborer in a brickyard, once bummed his way halfway across the U.S. in a freight car, taking odd jobs. He got an LL.B. from Columbia Law School in 1925, was hired by Prudential to help reorganize the bankrupt railroads in which the company had investments. Shanks later took over the job of employee relations, did so well that he was made executive vice president. He was made president of Prudential in 1946.

President Shanks plunged right into a program of decentralization, believing that local managers can get more business --and can handle the company's loans, collections, etc. better--if they are freed from top management's apron strings.' He opened a $9,000,000 office for Prudential in Los Angeles in 1948, gave the local staff virtually complete control over the business of eleven western states, except for top-level policy decisions. A Canadian headquarters swung into action in Toronto last September; Prudential's Southwest area (seven states) will be covered by a nearly autonomous staff when a new $10.5 million building is completed next year in Houston (out near the Shamrock Hotel). Shank's declaration of independence has paid off. During the past five years, Prudential's assets have jumped 40%, faster than they have ever grown before.

*First and second: American Telephone & Telegraph Co. ($10.8 billion), Metropolitan Life Insurance Co. ($10.3 billion).

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