2014 Horatio Alger Award Winner
"Personal satisfaction, impact, and success flow from action, performance, and results—not from flowery words and good intentions."
Thomas "Tom" McKernan was born in 1944 in Oakdale, Louisiana. His parents met while his father, who was from Pasadena, California, was stationed there with the Army Air Corps prior to being deployed to England and France during World War II. "My parents met on a blind date and married before my father was sent overseas," says Tom. Both parents were from large families; Tom's father was one of 10 children, and his mother was one of seven. "My mother's family in Louisiana was very poor," says Tom. "They had a small place where they grew a few things and had a cow and some chickens. The house had no indoor plumbing, and my grandmother used a washboard to do the laundry. We were only there for two months after my birth, and then my father sent money to my mother so that we could move to an apartment in Pasadena, near my father's parents."
Tom's father returned from the war in 1945. He began working as a carpenter and eventually as a building contractor. Tom's mother got a real estate license and worked part time until her responsibilities for her six children kept her at home full time. "Both my parents were very hard working," says Tom. "My mother especially had drive. She was a credit manager for Sears when she met my father and was working hard to escape her family's poverty."
After his parents' marriage, Tom's mother converted to Catholicism and became very devout in her new faith. The children all went to Catholic schools, and Tom served as an altar boy for many years. When he was 12, Tom got a paper route for a local paper, but he dreamed of getting a route for the Los Angeles Times, which paid better. "There was a long waiting list for those routes," says Tom. "They let you sell the Sunday Times door to door while trying to get people to subscribe to the paper. That was hard to do, but for each sale I made I moved up the list for a route. I finally got a Times route, which I did in the mornings. In the afternoons, I delivered the local paper. All together I made $50 a month.
Tom attended a seminary high school that was 40 miles from his home in Arcadia, which meant he had to board. "I was 14 years old and away from home for the first time," he says. "The separation was difficult at first, but looking back on it I think it was good for me. It taught me independence and reinforced the discipline and strong work ethic taught to me by my parents."
Tom was planning on becoming a priest. He attended the seminary throughout high school, but his family was going through a difficult time when Tom was 18 and graduating. His father had become a successful building contractor, building apartment buildings in Southern California. But he had become obsessed with horse racing, which put a financial strain on the family. Also, his two younger sisters were born when he was a teenager. It was about this time that Tom decided against the priesthood. "It was a stressful time in my life," he says. "I wasn't sure where I was headed, but I knew I needed to work and help my family."
In high school Tom loaded trucks at a warehouse for a large supermarket chain. During the summer he worked with his father in construction during the day and attended junior college in the evenings. Finally deciding he needed to work full time, he left school altogether.
Tom worked at Sears for two years. He then became a service representative in 1966 with the Automobile Club of Southern California (AAA). Three years later, the company trained him in computer programming. He attended night classes at Pasadena City College to complete his general education courses and then finished his degree at California State University in Los Angeles. When his job at AAA was moving him toward becoming the chief financial officer, Tom went back to Cal State to earn a master's in finance.
"There was something about the Automobile Club that I loved from the very beginning," says Tom. "It had a great history and a relationship with the automobile world. I just loved it and wanted to know everything about the business. I wanted to keep learning and be the best at what I was doing. My goal was never to head the whole thing. I just wanted to succeed at what was in front of me, and I wanted to help the company succeed."
During the 1980s AAA went through a difficult time financially, having lost a large part of its business in insurance. Tom became worried that the organization would not survive. During the last half of the 1980s Tom was serving as the chief financial officer. In 1988 he began attending Claremont College at night to earn his doctorate, with the plan that if AAA didn't survive, he would teach. He did all the coursework for his doctorate, but never finished his dissertation. Eventually his coursework earned him an advanced MBA.
In 1990 Tom was made AAA's executive vice president. He was asked to come up with and implement a strategy for AAA's survival, which he did. In 1991 he was named CEO. Tom led the national effort for AAA consolidation, which made the organization more competitive. In 1996 he acquired AAA Texas, New Mexico, and Hawaii. In 1997 he was one of the founders of a national life insurance company to serve AAA members. In 1999 he acquired a large tour wholesaler company to augment the company's growing travel business. In the decade of the 2000s he merged several other AAA operations in the Northeast, South, and Midwest. Today the organization operates in 21 states and comprises nearly one-third of AAA. Since becoming CEO, AAA membership has more than tripled. Total insurance premiums have quadrupled, and assets have grown fivefold.
When Tom looks back on his nearly 50 years with one organization, one in which he rose to the top of the ladder, he marvels at how close he came to never having this particular career at all. Tom got his entry-level AAA job through an employment agency, but he had also interviewed for a job with Best Foods at the same time. The first job offer came from AAA and Tom accepted it. He had begun the first few days of his training period with AAA when the employment agency called to say Best Foods wanted him. "It was a tough decision for me," says Tom. "Money was so tight then, and Best Foods was offering $72 a month more, plus a car. I was so tempted to quit AAA and go with Best Foods, but I was already enthralled with the work at AAA. They were really helping people and I liked the feeling that gave me. I made the decision to go with my heart instead of my head. Not long after that, I met my wife of 43 years at a AAA office. If I'd gone with Best Foods, I wouldn't have married her, and I wouldn't have had my two wonderful daughters. The decision I made to stick with AAA because it gave me a good feeling seemed like a little decision at the time, but it amazes me when I think about how much my life would've changed if I'd gone the other way."
When asked what it takes to be successful today, Tom doesn't hesitate to talk about the importance of education. "One thing our young people need to understand—and it's not an easy concept to teach them—is that what you see today is not what the world is going to be like five years from now or 10 years from now. Our world is changing at such an accelerated pace, and education is more important now than ever before. It's also important to be alert to opportunities. They aren't always evident. They don't knock you on the head and say: This is the opportunity you have been waiting for. You have to go with what feels right, what energizes you, and what gives you passion."
Tom also believes it is important to have strong, loving relationships to enrich life. "For me," he says, "success is getting through life with some degree of happiness. Having a loving relationship with my wife and daughters and siblings is very important to me. Judy and my daughters, Megan and Shannon, have made me a better person. I just try to do the right thing each day—and I try to have a little fun along the way."
Tom McKernan has served on the California Chamber of Commerce and was its chair in 1997. He is a member of the California Business Roundtable and served as its chair in 2005 and 2008. He serves on the U.S. Chamber of Commerce Board of Directors.
Mr. McKernan's philanthropic pursuits have included the Los Angeles Orthopaedic Hospital Board of Directors (chair 1996–1998), Los Angeles Orthopaedic Hospital Foundation Board of Trustees (chair, 1993–1996), the Los Angeles Urban League, the Los Angeles Police Foundation, the Orange County Performing Arts Center (board chair, 2008–2011) and Methodist Hospital Foundation Board (2003-2008).
Tom McKernan gives generously to his favorite causes, and he is especially looking forward to being a participant in the mentorship offered to Horatio Alger Scholars. "Sometimes it is not the big thing or the money thing that turns a life around," he says. "For some it's simply knowing that people out there support them. I think that once scholarship money is given, the recipients don't want to let down the Members. Scholarships give a path forward and create an expectation. I'm very much looking forward to being a part of that within the Horatio Alger Association."
Mr. McKernan's many awards include an honorary doctorate from Pepperdine University, the Spirit of Achievement Award from Junior Achievement, the Albert Schweitzer Leadership Award (2001), the City of Hope Spirit of Life Award (1998), and the Chinese American Museum Historymakers Corporate Leadership Award (2012).