Since independence, all governments of India have committed to gradual rather than revolutionary means for spreading democratic and socialist principles (as attested notably by the preamble to the constitution of India). Independent India averted the revolutions (and most of the debates) that have shaped the role of the state in the western world for some 500 years. In recent history, India never had to face its Thomas Hobbes, Jean-Jacques Rousseau, John Stuart Mill, Georg Wilhelm Friedrich Hegel, Karl Marx, Beatrice and Sidney Webb, Franklin Delano Roosevelt or Margaret Thatcher, John Maynard Keynes or Milton Friedman. India was saved the horrors of the French, American, Russian, Turkish, Cultural (Chinese) or Iranian revolutions (to mention but a few). India was largely spared the two World Wars and most of the “…isms” (fascism, communism, Marxism, capitalism, etc.). For every political fad that swore by TINA (“There Is No Alternative”), India responded with its inimitable TATA (“There Are Thousands of Alternatives”). It had its gradual transition away from non-democratic practices (e.g., abolition of privy purses in 1971 and of debt bondage in 1976) to a welfare democracy. Even the embrace of the “Washington consensus” (a combination of open markets and prudent economic management) under the guidance of Manmohan Singh has not changed the essential nature of the state. This “Fabian” model meant that the state was committed to provide welfare, not merely security, to the citizens, and that central government was in the main responsible for funding, producing, procuring, allocating and distributing most goods and services. This has been done in large measure through subsidies to public enterprises, producers of inputs, private-sector producers and consumers. The goods and services whose availability and price have been modified through subsidies include food, water, energy, financial services, labor, education, healthcare, fertilizers, information and media. As the public demanded more and more, the state promised more and more, sometimes through milestone measures (e.g., the largest debt waiver and debt relief program for farmers, in 2008) but mainly through quasi-permanent subsidies, which have led to a sizable fiscal deficit (almost 75% of the 2014-15 budget estimate, and 4.1% of GDP). The net cost of these handouts and subsidies is much higher than their nominal value, for three reasons: the interest payable to fund the deficit, the losses because of intermediation (e.g., it has been reported that for every kilogram of subsidized grains delivered to the poor, the government released 2.4 kg from the central pool) and the societal effects of enhanced inequity (an IMF working paper titled "The fiscal and welfare impacts of fuel subsidies in India" argued that the richest 10% of the households benefited from fuel subsidies seven times more than the poorest 10%). This is why a policy of “less government” could have much scope by divesting ownership of public sector undertakings (PSUs) in manufacturing, services and distribution and reducing subsidies substantially. However, the existing system has created many winners that would presumably be motivated and suitably represented to protect their vested interests by militating for status quo. Additionally, certain social services must be improved considerably (mainly water-sanitation-health, financial protection, food security and education), but acting on those needs would lead to more rather than less government. Similarly, actions to remedy inequitable targeting and inefficient distribution of subsidies could bring “more governance” only if preceded by more government intervention and spending. So, what is the road to “less government and more governance” that would both engage the many who today enjoy representation without taxation and protect future taxpayers from the financial and societal ramifications of today’s consumption? We submit the answer is in “localism.” “Localism” means encouraging people to be involved in elaborating and governing local solutions, with only subsidiary support from government. Most of India’s population is rural and in the informal sector. For this vast majority, the world is local, and local is the measure for most things. It is a moot point to argue whether people wish to be in the informal sector (to be excluded from the framework through which the government collects taxes and imposes regulations) or whether they are victims of circumstances (of being de facto excluded from the practical measures through which the government delivers universal rights for all citizens). The essential point is that people belong to local groups through which they access benefits that are not otherwise available as public goods. Therefore, communities reinforce the norms and networks that enable individuals to act collectively, influence decisions of single community members on the economic and social engagements they can/must/must not enter into, who can/cannot do so and on how benefits are distributed. Compliance with consensus flows from members’ reliance on the community’s patterns of reciprocity. As the community reaches most everybody on a continuing basis, it can be mobilized to play a role in “more governance” of local activities and structures. Experience from rural India and from other countries confirms that underserved rural communities have been able to operate community-based mutual-aid schemes that create welfare and distribute benefits, which are funded by resources of the members. Such collective action of groups, by groups and for group members is a major paradigm shift from the mentality of reliance on government handouts, decisions and entitlements. The change in mindset is from being dependent to being dependable; the change in the financial model is from relying on inflow of charity to relying on pooling of own funds, which are otherwise invisible and inaccessible, to obtain welfare gains. The argument in favor of empowering community-based mutual aid is not merely that it is more opportune, but that it is more legitimate. Recalling the words of Abraham Lincoln (a speech from 1854, quoted in G.S. Boritt, 2004: Lincoln and Democracy): “the objective of government is to do for a community of people whatever they need to have done but cannot do at all or cannot so well do for themselves in their separate and individual capacities.” If now the case is that communities of people can do for themselves what the government cannot so well do for them, is it not then self-explanatory that the government should do all it can to support such action at the local level? Moreover, the argument in favor of encouraging the proliferation of local action is consistent with the democratic system of India, where interest groups are well established.  In his book The Logic of Collective Action: Public Goods and the Theory of Groups (1965), M. Olson pointed out that small local groups can form more easily and function more effectively to advance their interests. Olson also asserted that it is easier for the government to support many small groups than few large ones, and by supporting community-based self-interest the state can also advance its interests more easily and less expensively. If the reason for seeking “less government” is to encourage more self-reliance and hard work and a decrease in dependence on acquired rights and corruption, then does it not follow that government should provide tangible support to encourage voluntary action? The pooling of part of people’s resources for the advancement of community-based welfare gains serves the interest of the members of such groups (who can take charge of rationing and of priority-setting relating to the use of their funds) and also of the government (which could leverage the community-based risk management by limiting its intervention to subsidiary coverage of only rare events). The development of community-based health insurance in India as a mutual-aid activity, replacing entitlements or debt, is one of the most effective mechanisms for voluntary social change. Just as after independence India abolished several homegrown systems based on inequality of rights (e.g., chaudhary, deshmukh, jagir, samanta and zamindar) and favored equality through democracy, so asset creation should take primacy over money lending (in all its forms, from village shark to microfinance and to banks), for the same reason. India also abolished bonded labor (which also involves interlinking debt and exploitative labor agreements), even if this practice is not yet dismantled completely, according to the International Labor Organization (ILO). And the infamous phenomenon of farmer suicides is also linked, at least in part, to debt: Farmers are held morally deficient for inability to repay loans, when in fact the reason for that insolvency is crop failure (occasioned by the inherent risks of agriculture: too much or too little rain, too hot or too cold climate, pests etc.). Many other countries developed crop insurance to protect both farmers and farming. In India, agricultural insurance is used mostly to securitize loans rather than farming (farmers must pay the premium when they borrow, but the payout goes to the lending bank). Disconnecting crop insurance from borrowing and connecting it with “what a responsible adult does” to avert the risks of agriculture can bring about safer agriculture and more governance with less government. This change is best accomplished when embraced by local communities, not merely single individuals. When agriculture is a safer economic activity, more farmers are likely to continue farming (and thus provide food security). When crop insurance becomes an act of mutual aid, something everybody in our village does, it is easier to mobilize the community to also encourage asset creation, and better financial protection. The virtuous cycle of more community-based cooperation fosters multiple positive changes, including improved targeting of government support for financial protection, better advisory to farmers on how to improve their agricultural productivity and thus food security and enhanced equality. These are objectives that have never been achieved by debt/credit extension or debt relief, because such programs missed completely the opportunity to leverage the collective energy that, what the community can do together, none of its members can do alone. Creation of such local asset pools may start with modest amounts, as many villagers are cash-poor, and will first want to gain trust that the new form of collective action will deliver welfare to many members of the group, not just to a few powerful or privileged persons. However, the accumulation of funds will grow over time, especially if such growth is stimulated by the government. The government can encourage such solidarity-based collective action by passing enabling regulations to recognize mutual and cooperative insurance schemes (as part of the revision of the insurance law). Indonesia has recently changed its insurance law to recognize mutual and cooperative insurance at par with commercial insurance, to facilitate the development of mutual micro-insurance in rural communities. The European experience has shown that today’s large financial institutions originated from exactly such community-based local initiatives. As these were allowed and supported to grow, they served as the basis for universalization of health insurance, agricultural insurance and natural catastrophe insurance. In some countries (e.g. Switzerland, France, the Netherlands, Belgium or South Africa) ,the local schemes have morphed into large private or cooperative insurance companies. The local origin of the activity was essential to ensure that local groups can define their local priorities (which enhance local willingness to pay) and operate their scheme with locally dependable persons (which enhances flow of information, notably through gossip, about the fair and equitable treatment of all members of the scheme). Government support for community-based asset creation can provide the government with information that it does not have currently but that it needs to enhance governance and the government’s revenue side. The shift from remote governance to local governance relies on local trusted elites, a new kind of elite, different from the capitalist elite and the bureaucratic elite. The local elite needs to be given a good start (by imparting private sector methods for social sector activities, minus the profit-taking), and the government must still provide worst-case protection. But for the rest, government should encourage communities to devote their talents to create public goods, to fend for themselves, to concentrate on assuming responsibility for their own welfare. This is so much better than the present situation, in which many people entertain huge, unrealistic expectations and contradictory demands from the government based on messages, disseminated for years, that welfare is a right; and when they receive welfare or debt/credit benefits, rather than being grateful, many people feel that their due has reached them too little and too late. Anchoring the support to local asset-building by community-based collective action enhances the notion that we can do more on our own and allows each local group to design and do itself some of the work that hitherto it waited for the government to do. Supporting “localism” means that welfare creation is the legitimate domain of each community, delivered bottom-up rather than entirely top-down, supported by the government rather than the exclusive responsibility of the state to each individual. Localism will enhance governance because communities, governing their own priorities and resources, are very good regulators of their local scheme, because they are responsible for doing, not debating, and their actions are transparent locally. This transition from external to community leadership entails transition to performance-related legitimacy and away from formal title or appointment. It can also be the transition from short-termism (with the next elections as implied statute-of-limitations) to the long-term, recognizing that to achieve universal access to financial services, or to health insurance, or to secured livelihoods, or to relevant agricultural insurance or better sanitation may take decades. Notwithstanding the patience needed to get results, localism can provide the platform for less government and more governance now.

Last year, I decided to pursue a career transition as a full-time occupation. I’ve been out in the market for the past six months, assessing business opportunities as I network with executives in financial services, healthcare, media and retail, as well as with VCs, private equity investors and advisers. What’s been great is that invariably any role in any organization, however broad, will be framed by the priorities that drive the business, which may be using a short-range lens defined by the annual plan, or one that doesn’t offer much of a peripheral view.  Transition-as-occupation offers full permission to set the aperture and depth of field for insight-gathering and exploration. What has also been remarkable is not only the generosity of many people at the top of their respective fields to share perspectives, but also how I’ve been able to help others by playing the role of connector among people who may not normally meet up with each other, but who are excited to understand how others are addressing common questions in a complex and changing environment. Here are six connected trends on the collective mind of the leaders with whom I’ve met. They represent a snapshot of what I am hearing. Within them are opportunities to be realized across this industry:

• Customer-centricity – is it talk or walk? C-suiters certainly verbalize that “customer-centricity” matters, but few teams demonstrate that empathizing with the customer is bedrock for viable, win/win relationships, growth and profit improvement. The phrase has as many definitions as (or more than) the number of people defining it. Most significantly, the connection to concrete, quantifiable business priorities is generally missing. For those who get beyond the buzzwords, there is tremendous tangible value, even disruptive opportunity, in being a customer-focused player in this sector.

• Old norms don't work...digital and innovation are essential. Businesses are faced with redesigning processes, structures and metrics, recruiting more agile learners who are also able to deliver and overcoming legacy infrastructure to adopt new technologies. This level of change in the way businesses operate is not for the faint-hearted. The companies that take on these real implementation requirements will gain ground.

• Yes, technology truly is changing everything. Even with greater efficiency, there is no growth without compelling offerings that meet big market needs. For companies engineered to serve baby boomers, serving the millennial generation requires profound change, not just a digital coat of paint. The implications go way beyond having a social media presence, cool apps and clever advertising. The millennial generation is inheriting a different world, re-shaped in good and bad ways by prior generations.  The starting point for progress is to be truly insight-led, and not presume you know what people want and need.

• The marketing bar is being raised. This discipline has been disrupted, and more is being demanded. Traditionally viewed as "support" people, marketers are now being held to results that require a different seat at the table, a different talent profile, processes and resources and an entirely new set of connections with colleagues and external partners. Begin by redefining relationships, especially with product, IT and sales internally, and with the advertising and media agencies as key outside partners.

• Two tales are playing out within financial services. Legacy institutions remain heavily focused on regulation, compliance, expense reduction and cyber security…while fin tech is hot, with capital flowing into payments, wealth management, consumer lending and related start-ups pursuing market disruption and reshaping the industry. Start-ups are doing great things in this sector and will keep incumbents on their toes, as well as representing potential acquisition opportunities as a strategy to modernize. Alignment around a clear strategy and a collaborative culture are at the foundation of leading change vs. playing defense.

• Healthcare disruption is creating opportunities, but the pace is slow. Payers and providers are aiming to address Affordable Care Act and other government, employer and consumer-driven impacts.  Using electronic medical records, controlling employer healthcare expenses and enabling patient accountability for medical care decisions are just three of many big and complex challenges. The road to change will be long and slow given the sheer complexity and fragmentation of healthcare delivery. As in financial services, new entrants are leading innovation with solutions that address elements of the ecosystem. As in financial services, there is room for incumbents to realize opportunity with the right strategic and cultural conditions.

This is Paper 4 in a series of five on risk appetite and associated questions. The author believes that enterprise risk management (ERM) will remain locked in organizational silos until boards comprehend the links between risk and strategy. This is achieved either through painful crises or through the less expensive development of a risk appetite framework (RAF). Understanding of risk appetite is in our view very much a work in progress for many organizations, but RAF development and approval can lead boards to demand action from executives. Paper 1, the shortest paper, makes a number of general observations based on experience in working with a wide variety of companies. Paper 2 describes the risk landscape, measurable and unmeasurable uncertainties and the evolution of risk management. Paper 3 answers questions relating to the need for risk appetite frameworks and describes in some detail the relationship between risk appetite frameworks and strategy. This article, Paper 4, answers further questions on risk appetite and goes into some detail on the questions of risk culture and risk maturity. Paper 5 describes the characteristics of a risk appetite statement and provides a detailed summary of how to operate based on the links between risk and strategy. How are risk appetite, risk tolerance and risk limits related to one another? A range of differences in philosophy are influencing the gradual determination of internationally accepted definitions. Notwithstanding, we recommend the definitions and the sequence of diagrams and explanations given in the Institute of Risk Management’s (IRM) guidance, which are A number of models exist that seek to describe the relationship between risk appetite, tolerance and risk; for instance, the Ernest and Young Risk Pyramid below: How are organizations using risk limits and risk tolerances around those limits? Our experience in working with clients shows that organizations are continuing to struggle with basic risk concepts, definitions, language, responsibilities, reporting and delivery. Accordingly, while risk limits are set to contain risk-taking practices, lack of common language and loose interpretation of concepts is causing confusion within organizations and leading to limits being seen as negotiable within the context of risk tolerances. As a corporate discipline, risk management is in its infancy, and the quality of risk practitioners is generally poor. Risk limits are perceived negatively by business practitioners, who use their limited knowledge of risk tolerances to argue for greater flexibility in applying limits. How do organizations facilitate early warning of potential breaches of risk appetite? In practice, we find that there is limited facilitation. Rather, business people see the concept of risk as limiting practices that drive value and, thus, adopt the business school mantra of "seeking forgiveness rather than permission." This is made easier in organizations where risk is seen as a nuisance and impediment to business and where appreciation of quality risk management is not apparent at senior levels. Business generators tend to view risk as friendly and flexible, designed to support business generation. Thus, risk limits are treated like speed limits on the public highway, more for observation than observance. Accordingly, we find few cases where early warnings are seen as anything other than flashing lights on the dashboard. In many cases, early warnings result in a case's being presented to the risk committee for raising limits, rather than resulting in severe braking to ensure conformity in risk management. Much of the foregoing represents the cultural challenge of embedding risk as a serious discipline rather than a faux science treated as an add-on. This reflects the nascent nature of risk management and its failure to be seen at board level as front and central to strategy and its effective and safe execution. Culture and "tone from the top" are critical here. So is strong support for risk executives at senior management level and an appreciation that risk management is akin to the medical profession, where hygiene is embedded in all procedures and provides a safe and secure means of conducting business, rather than being an impediment. The absence of good-quality risk officers and of universally accepted definitions of risk also undermine the discipline in organizations where there are few effective sanctions against limits being broken. How do organizations assess risk culture? Optimal risk culture is designed and nurtured on building blocks practically described as blocks ABC: The building blocks are briefly summarized as follows:

1. Training, values and beliefs, reporting and continuous improvement directed at outcomes driving attitudes displayed by people, which
2. Influence their behaviors and thus the quality of their discussions and decision making, thereby
3. Manifesting as demonstrably credible risk culture.

Other than retrospective analysis of poor risk culture following various corporate crises, there is a limited body of reliable knowledge, and experience, on assessing "existing risk culture" and successfully navigating to a "target risk culture." The IRM's "Risk Culture, Under the Microscope: Guidance for Boards" describes multiple interactions: Diagnostic tools are available to track the components described within the framework above. In our experience, however, such is the poor state of risk maturity in very many organizations that they are not sufficiently advanced to practically determine how they might chart a course from the existing to the target state of risk culture.

You've done the hard part building a successful insurance agency. But production has plateaued. So you focus on growth and spend less time in the office. This prevents you from overseeing your staff, and you begin to worry about what's happening back at the office. It's the biggest challenge owners of agencies face. How do I drive growth and lead my organization? Solve it by implementing these three steps:

1.  Focus on what you do well. You can't do everything, so don't!  Focus on tasks that add the most value. Most people, when they first assume a management role, want to make all the decisions. It's a management style called "command and control." In today's flat organizations, it doesn't work. The business world moves too quickly for employees to wait to be told what to do. Successful organizations hire the right people and divide up roles and responsibilities to maximize each individual employee's contribution. It applies to the agency owner, as well. You need to identify what you do best and focus on that task.
2. Empower your employees to act. It's your job as the organization's leader to create an atmosphere that fosters initiative over order taking. Make sure your employees understand that you will stand by their decisions. Don't be quick to correct the way they are doing something if the method they use solves the problem. The more you micro-manage, the more you send the message to an employee that you don't expect her to make a decision. Move responsibility down to the lowest level in your organization. Your front-line employees know what's going on. Give them the power to solve the problems facing your organization and get out of the way.
3. Be patient. It's natural to try to solve a problem or issue you see at the office. Hold back. Wait. Allow your staff to figure out the solution. It's not easy....especially when you watch someone make a mistake. But over time what you will discover is that an employee will own a specific task she feels responsible for.

Well-run companies don't depend on one individual. They institutionalize employee development enabling knowledge transfer among the existing work force. At many organizations, managers are required to develop their replacement and can't get promoted until their designated successor is deemed ready. In other words, part of their job is to make themselves redundant. Analyze what you do daily. Ask yourself what part of your daily tasks you could transfer to someone else in the agency. Then spend the time training your staff to assume your additional tasks. This will free you to focus on the most important business issues affecting the agency. Inspire your people to be great!

The sub-title of a great little book, "Happier," by Tal Ben-Shahar, is “Can you learn to be happy?” Ben-Shahar explores that question through a series of short chapters, summarizing the most popular course at Harvard University today. This book might seem a strange topic for my posts (as a writer on customer insight), but my coaching work with customer insight leaders has taught me the power of positive psychology. The book is also short (168 pages), fun and very accessible, so a suitable complement to some of the weightier tomes that I’ve reviewed. For those not familiar with the positive psychology movement, it was properly launched by Martin Seligman in his opening address when becoming president of the American Psychological Association. He proposed that, instead of just focusing on mental illness or helping clients address weaknesses, psychology could focus on ways of fostering joy, flow, strengths, etc. in individuals. In other words, to help clients focus on their strengths and how to be happier rather than seeking to address weaknesses or unhelpful thinking patterns. Professor Seligman has dedicated his subsequent career to this goal. This topic has also, of course, become popular with politicians on both sides of the “pond,” and I’m sure you’ve heard of the work on measuring well-being in society. Anyway, this book by Dr. Ben-Shahar, who teaches a course at Harvard University on happiness, is more of an accessible self-help book. It’s packed with personal anecdotes, simply communicated psychology and practical exercises for you to put into practice. Divided into three parts, these cover: What is Happiness?; Happiness Applied; and Meditations on Happiness. These are further broken down into 15 chapters, so many are less than 10 pages and an ideal short-read. Within each chapter, you’ll find at least one “time-in,” a moment for you to stop and reflect on how you’d answer a personal question. At the end of every chapter is an exercise for you to try. A number of these are suggestions of new rituals to put into place over weeks or months, not just quick fixes. Personal favorites for me, from the exercises, have been: 1) A gratitude journal: noting down, before you go to sleep, at least five things that made you happy that day and for which you are grateful. 2) Reflecting on your four quadrants of Rat Racer, Hedonist, Nihilist and Happy -- to learn from experiences about what really makes you happy. 3) Mapping your life: measuring how you spend your time and how this matches those things that give you most meaning and pleasure. 4) Goal setting: to set long- and short-term goals to move toward what you really want to do with your life. I’m conscious that without reading the book, a lot of this could sound like just American positivity, with fake smiles and overenthusiastic language. However, there really is so much more to it than that. Ben-Shahar does a great job in helping the reader understand the combination of meaning and pleasure that can help you be happier and the joy to be found in the journey rather than assuming happiness is a fixed state at which you arrive. As well, his personal anecdotes and the amount of time given to personal reflection and practical exercises continue to keep the theory grounded in the practical, day-to-day reality of your life. I was initially very skeptical of this movement and a book with such a title. Overly positive people who appear to be in denial about their circumstances and full range of emotions don’t do it for a natural skeptic like me. However, as I’ve had my eyes opened to the academically grounded theory here, I have found it very useful in my own life and with clients. My time mentoring future leaders over years had already taught me that you make more progress helping people play to their strengths rather than improve their weaknesses. In the second part of the book, Ben-Shahar addresses how to apply the theories of part one to education, the workplace and personal relationships. The workplace chapter focuses a number of pages on how individuals can find their “calling” -- what Marshall Goldsmith would call their “flow” -- that conjunction of meaning, pleasure and strength that make for the most fulfilling work. It is also pragmatic about crafting your existing role and work rather than assuming everyone takes this discovery as a Damascene conversion experience and rushes off to a new career. The personal relationships chapter is also a good reminder about expressing love, knowing the other person and expressing gratitude. The final part of this short book contains a series of seven shorter chapters or meditations on different aspects of happiness, from self-interest to beyond the “happiness revolution.” The conclusion to this work ends on a practical note, focusing us back on the here and now, thus what we are going to put into practice today. Overall, the book does well at avoiding false expectations but also helping readers try different ways of thinking and new practices in their life that could make them intentionally happier. During much of my coaching work with customer insight leaders, we come back to the source of motivation for that individual and the meaning and pleasure that keep them motivated to lead effectively and consistently over the long term. So, I would encourage any leaders to not be put off by what sounds like a fluffy title and try engaging with this short book. It may just reignite your passion and motivation to make a real difference through work that makes you happy.

Modern core systems are essential to an insurer’s ability to compete effectively in today’s increasingly complex and dynamic market. Policy administration systems (PAS), in particular, are ripe for modernization -- policy administration is the heart of an insurer’s operations, and it provides the information that feeds other core systems as well as most of the secondary systems, like document management and agent portals. Insurers know that modernization is an inevitable step on the journey forward. The exciting news is that the industry as a whole has reached a tipping point where nearly two out of three insurers are engaged in some stage of PAS modernization, whether in the evaluation stage of a new solution or in the actual implementation. SMA’s recent study, Policy Administration: P&C Plans and Priorities,  reveals that all insurers know they must take the modernization journey and that most are already on the way, although in different phases and at their own pace. Fully 78% are planning to replace at least one core system (policy, billing or claims), and more than half are planning to replace all three. With so many insurers working toward the same goal, there are certain commonalities and lessons to be learned that can be used to make a company’s PAS modernization projects more efficient and effective. One of the most alarming findings from the research is the substantial challenges that insurers are still experiencing as they work with their systems’ configuration tools. This is the number one feature insurers require in a new PAS, but it is also one of the top challenges they cite in working with the solutions on the market, including issues of handling the work internally. Our observation is twofold: Evolving PAS solutions are adding and enhancing configuration capabilities, but their usability aspects are still maturing. The second insight is that insurers are coming to realize they must reorganize to some degree to improve their maintenance processes. The skills and resources that a configuration specialist needs are often assumed to exist but are not always present. Resources that could be trained for this role are typically isolated in the business or IT organizations. There needs to be recognition that there are specialized skills to be learned for configuration and maintenance, and decisions to be made about where this work will be performed. Core systems modernization is inevitable, and although PAS replacement, the biggest component of that process, demands significant investments of time, resources and money, most insurers have already begun their adoption of modern core systems. With so many companies engaged in PAS replacement, we can learn a lot about what makes these projects successful, both before and after implementation. There are challenges ahead, but they are not insurmountable, and the benefits of core systems modernization will be realized for years to come.

What’s with all the investor interest in workers’ comp services? There are several dozen private equity (PE) firms looking hard at the workers' comp services business today, with many pursuing acquisitions of companies large and small. While their approaches, priorities and goals may differ slightly, there are several reasons why their attention will likely persist for some time. First, there are a lot more investment firms out there these days than five or 10 years ago, with a lot more capital to invest. That means lots of smart people with big bank accounts are looking to park millions of dollars, which means there’s a lot of competition for attractive companies. Second, some comp services companies have gotten pretty big, with earnings in the tens of millions of dollars and revenues north of $200 million. Finding potential targets, conducting due diligence and going through the deal process takes about the same amount of time and staff if it is a $50 million or $350 million deal. Obviously, PE firms would rather do a couple or three large deals than a bunch of smaller ones as it’s a lot less work on the front end, and a lot less to manage and oversee after the deal is done. And PE firms just seem to like companies with more revenue. Third, what used to be considered a problem -- the regulatory risk associated with a workers’ comp company -- is now seen as a strength when compared to a non-work comp healthcare firm. Investors see the 51 regulatory bodies affecting workers' comp as creating far less risk than the single regulator driving Medicare, Medicaid and most health insurance programs. Investors don’t know what’s going to come out of CMS as reform is implemented, so PE firms are hedging their bets by going where, in a worst-case scenario, they’re going to get hurt in one or two big states. Fourth, there are a lot of inefficiencies, stodgy business practices and just plain poorly run sectors of the workers' comp business. PE firms make a lot of money by stripping out inefficiencies, delivering better performance, streamlining workflows and processes, removing cost and delivering more value. Anyone who’s spent any time at all in work comp knows that there are a plethora of opportunities out there to do all of these. Bill processing, analytically driven medical management, intelligent utilization review, provider clinics, complex case services, IMEs/peer review and chronic pain management and addiction services are just a few sectors where there’s a ton of opportunity. Interestingly, no PE firm has yet taken advantage of the biggest opportunity in workers’ comp. That opportunity is to buy a comp carrier/TPA, rationalize the claims and medical management process, write workers' comp insurance and make huge profits by controlling medical costs and delivering much better outcomes. The investment executives I’ve spoken with about this seem to be afraid of the risk; what if they do it wrong, or get a bunch of bad claims, or whatever? To which I respond: You can’t do it any worse than many of the current comp carriers, so what are you waiting for?

Are there “muzzlers” in your company? People who stifle the flow of valuable information or use their influence to create secrecy, increase political advantage or reduce transparency? When valuable and timely information cannot flow freely within and external to an organization, not only is the company’s innovation, collaboration and talent development dampened, but its external relationship ecosystem suffers, as well. What I call “muzzlers” are cancer cells lurking inside your enterprise. Their destructive behavior is almost certainly damaging the brand you’ve worked hard to build. And yet, like a cancer that hasn’t yet manifested symptoms, you may be completely unaware of the danger. Information muzzlers believe information is on a “need to know” basis -- and you don’t need to know. Too many initiatives become massive secrets; too few function as test beds whose results are disseminated in useful ways. I believe information muzzlers are an unintended byproduct of scarce resources. More and more, departments and functions have to compete for resources. This has created an internal competitive force, with jockeying for mindshare and internal wallet share. Scarcity creates a fear-driven culture that causes information muzzlers to multiply. The cost of information muzzling is huge. It prevents collaboration and wastes resources. Worse yet, it inhibits leveraging the collective intelligence of the organization. Like cancer, information-muzzling spreads and begins to affect the entire culture. Just one example: I go to a conference, I learn something really cool, but because we have an information-muzzling culture, I don’t tell anybody anything about it. Now that best practice isn’t documented, shared or spread throughout the company, and the value of sending me to the conference is a tenth of what it might have been. Down this path lies higher operating costs and lost competitive advantage. Influence muzzlers can be just as costly to an organization. Influence is about strategic relationships within a professional network. Any time we’re faced with a challenge or an opportunity, we tend to think about what we should do and how we should do it. We seldom think about who-- who we need, who we know or how we might connect the dots from the relationships we have to the relationships we need. Insurance is typically sold through brokerage firms -- a vast, strategic, relationship network. Yet influence muzzlers don’t see its utility. Who in that network really understands high-net-worth individuals? Who in that network knows exactly how to value priceless artwork? Who in one of these agencies “gets” Millennials and their digital behavior? Making those connections is good for all concerned, but influence muzzlers don’t want to share. Fundamentally, they are undermining the value in the organization’s biggest asset, which is its portfolio of relationships. So far, we’ve talked about inside the organization. But muzzling, of information, influence or both, is just as harmful outside an enterprise. External resources are a huge asset to any organization: the advisers, consultants, coaches, speakers and others who bring cross-industry knowledge and an independent lens. As an outside adviser and a professional speaker, I run across muzzlers when I am engaged by an organization. Their passive-aggressive behavior signals that they want others to think they have more information or influence than they do. As a mentor drove into me years ago, “Real power doesn’t corrupt; powerlessness corrupts!” These people don’t have real power, so they use muzzling instead. Their behavior, whether fueled by lack of self-esteem of self-confidence, or political jockeying, or ambition, comes down to 1980s tactics of information hoarding and Rolodex hiding. They make everyone else’s job more difficult, but that’s just one small aspect of their cancerous qualities. One of the promises I made to myself when I started consulting and speaking professionally more than a decade ago was that I wasn’t going to be a “pull-string” expert for hire -- the kind who takes any stage, you pull the string, and you hear the same canned recommendation or speech over and over again. I prefer to bring a unique, contextually relevant perspective to every engagement. Above and beyond interviewing the CEO or the board who hired me, I dig around to learn more about the real challenges or opportunities within the organization. I reach out through contacts on LinkedIn. I ask for interviews with key leaders down to front-line contributors. I read industry articles or analyst reports. If the firm has physical locations, I may go visit some of them to really understand the customer experience and how the value is delivered. I’m not seeking access to confidential information that should clearly be kept as such, but for inputs that will allow me to integrate the key challenges and opportunities into my content. It’s this kind of outreach that occasionally brings me in contact with an information or influence muzzler. As an independent outsider, I’m in a unique position to see that destructive behavior and call it out. If I encounter one muzzler, it causes me to wonder whether this is actually a cancer that is spreading within this organization. And, crucially, does the CEO or the board know of this person’s behavior? Would they consciously choose a muzzler to be an ambassador of their brand? It makes me ask what other cancerous behaviors are going around this company. If you are a senior leader, the legacy you leave in your organization is in large part the bench you have developed, through your intentional actions. Every time a senior executive moves on, the next generation of leaders steps up. Will an information or influence muzzler get promoted even higher up? If that is the culture you built, it dilutes not only your legacy but endangers the entire organization. You have not just tolerated but encouraged cancer to grow. Consider how we deal with cancer: Either radiation to keep it from growing, or surgery to remove it completely. That’s exactly what you have to do with information or influence muzzlers -- either call them out on their behavior and take explicit steps to fix it, or cut them out. Otherwise their dangerous behavior permeates the rest of the organization. To avoid the organizational cancer spread by information or influence muzzlers, I recommend three actions for senior leaders:

1. Build a culture that’s unafraid of retribution, where you can highlight and celebrate “non-muzzler” behaviors.
2. Build feedback loops so that your internal and external relationships can inform you if they encounter a muzzler on your team.
3. Never stop improving your bench, because the legacy you leave in your organization is the team and culture created on your watch. You want knowledge curating and influence sharing to be your mark, not hoarding and hiding.

Takeaways

1. Like a silent cancer, information and influence muzzlers act in destructive ways that senior leaders may not know about.
2. The presence of a muzzler indicates a cultural norm that may be a cancer -- and it’s probably spreading.
3. Safeguard your legacy: Constantly improve your bench by cutting out any cancer -- including muzzlers.

When people are extraordinarily successful, examining their characteristics, values and attitudes can be instructive. The rest of us can learn from them and possibly adopt some of them to advance our own goals. Larry Page, co-founder of Google is an example of one who has achieved exceptional heights. Peering into his thought process can be enlightening. Page says, “Have a healthy disrespect for the impossible.” To conceive and develop the Google concept and then the massive company, its young founders had to have a very healthy disrespect for the impossible. Others besmirched the idea of collecting all the information in the world and then making it available to everyone in the world. Not only was it a bold idea, it was thought by most to be ridiculous and impossible. But Larry Page and Sergey Brin had a very healthy disrespect for the impossible. They made it happen. The concept of disrespecting the impossible could be entertained by those of us in the workers’ compensation industry. True, few of us are likely to reach the pinnacle level of Larry and Sergey, but we can borrow some of their bold thinking to get past the assumptions and barriers that keep us from achieving more. Everyone agrees workers’ compensation as an industry needs a healthy nudge to try new things. The industry is known for its resistance to change. Maybe the way to change the industry, to be an industry disruptor, is to begin with an attitude of disrespecting the impossible. Many people, including those in the workers’ compensation industry, focus on why something cannot be done. Reasons for this notion are many, but probably cultural tradition plays a role. Inventiveness is not expected or appreciated. Too often, the best way to keep a job in corporations is to keep your head down and avoid being noticed. Spearheading a new ideas is risky. Stonewalling new ideas or doing things differently or adopting new technology in an organization thwarts creative thought and certainly diverts progress. I was once told that to incorporate a very good product would mean doing things differently in the organization. So the answer was automatically no! We all know the old saying about the word "ass-u-me." It actually packs some truth. To avoid the trap, check assumptions for veracity. Incorrect assumptions can be highly self-limiting. Begin the process of problem-solving with new thinking -- disrespect the impossible. What could be done if the perceived barriers did not exist? What could be accomplished if new methods were implemented. Probably the most important ingredient for achievement in any context is tenacity. It’s easy to quit when the barriers seem daunting. Tenacity combined with a disrespect for the impossible might be unbeatable.