Tag Archives: accountability

The Sharing Economy and Accountability

OK, guys, London’s black cabs are officially an endangered species. Not just yet, but, considering that Uber is gaining ground every day, this is going to happen at some point.

And it’s not just Uber that’s making traditional service industries nervous. Airbnb has surpassed the largest hotel chain in the world in terms of total rooms available.

But, hey, why the sad face? This is hardly a bad thing. Much like traditional insurance carriers are embracing insurtech innovations, traditional industries should be doing the same with the sharing economy. I emphasize “should.”

The sharing economy is already part and parcel of our lives, so much so that we’re not even questioning it anymore. It seems like a simple concept: leveraging underutilized assets for profit. But this is much more than a simple consumption shift.

It’s also a shift in how we are accountable — and how we regulate commerce. As you know, the sharing economy is mostly unregulated by governments. This lack of regulation fosters a massive debate that won’t subside for years to come.

See also: Sharing Economy: The Concept of Trust 

The question is: How does this new industry create accountability? How on earth do you get random strangers to trust that you won’t drive your car straight into a tree when they’re riding shotgun? How can you, as a client, distinguish between a legit host on Airbnb and a scam?

Haven’t You Heard of Reviews?

When it comes to the sharing economy, you can’t rely on the government to test out every service provider for you and then give you the “all clear.”

Two-way review systems are critical to many sharing economy platforms and provide the foundation of trust upon which this new industry is built. Sellers and buyers can rate each other following a transaction. This creates two-way accountability that has allowed the sharing economy, so far, to thrive.

It all sounds pretty great in theory, but, in practice, things are not that easy because you can never really know for sure that the person behind a review — be it a stellar one or a nasty one — is telling the truth. We always try to paint the most positive picture of ourselves. It’s human nature.

Some people have internal biases, and Airbnb and Uber are witnessing firsthand how racial prejudices affect their platforms. This is terrible and is an existential threat that needs addressing.

The challenge going forward for sharing-economy platforms is not after-the-fact, two-way ratings but how sellers react before engaging in an economic exchange with sharing-economy buyers. Stay tuned on this one.

Smile, You’re Being Rated!

At first, this may seem like a crazy idea, but it works. Studies have shown that even the illusion of being watched makes people behave in more socially acceptable ways.

Ready for a quick super-scientific experiment? Get out the beaker!

Imagine you’re traveling for business and one night you stay at a Hilton, the other with Airbnb. Now, think of all the times you’ve left a hotel room. Then consider how you’d leave someone’s residence if you stayed in an Airbnb. You also know this host will leave a public review of you as a guest.

You probably would not leave the home like this…:

Screen Shot 2016-11-15 at 10.48.36 AM

…but more like this:

Screen Shot 2016-11-15 at 10.48.50 AM

Most of us undoubtedly would leave the Airbnb in better shape than we would a hotel room. And that’s the point of accountability in the sharing economy: It makes people behave better!

Accountability Through Reputation Capital

Rachel Botsman, one of my favorite sharing economy thinkers, has paved the way for how we understand accountability in the sharing economy through her concept of “reputation capital.”

In an age of mobile technology and sharing economy innovation, reputation is a tangible asset that can be managed and built. Although we are at the early stages of this, we will likely soon be able to carry our reputation with us across online platforms. Some have even argued that online reputation will be the new currency in the 21st century.

The point is that every sharing economy platform has some sort of feedback process. As a seller, your earning potential depends entirely on the management of your reputation.

See also: 9 Impressive Facts on Sharing Economy  

As the sharing economy and its accountability foundation continue to grow and enter different aspects of our lives — I am thinking of healthcare and social causes — it’s important to understand the complex concept of accountability, especially in a digital age where everything is recorded, stored in the cloud and then commented on a hundred times.

That’s all for now, folks. Next time, we will talk about the implications of another sharing innovation that affects the insurance industry: home-sharing.

ERM Blurs Lines for Nonprofits

I will never forget a frustrated Peter Drucker lamenting years ago, in his heavy German accent, the use of the term “nonprofit” when “the fact remains that profitability is vital to our sustainability?” To this point, I’ve been so impressed with the tools of technology (and equally with recent management appointments in nonprofits) that I’ve been encouraging nonprofits to raise their game relative to risk retention. This can be achieved with a more sophisticated form of reinsuring their liabilities and operations — captive, risk retention group — so that nonprofits’ efforts are rewarded through an ROI on their capital (i.e., a surplus), generating a “profit center” for mission protection.

I believe the time has come for a more holistic view of how we manage, whether it’s our company, our organization or our household. (Interestingly, the word “economics” comes from two Greek words — oikos and nomia — whose earliest origins relate to taking stock of the affairs of the home.) I believe this blurring is manifest in much of what I am witnessing:

  • For-profit executives leaving a life of “success,” corporately, for a life of “significance” in a mission-based organization (Bob Buford’s theory) at a mid-point in their lives;
  • For-profit executives sitting on non-profit boards advocating for more enterprise risk management (ERM), a more sophisticated form of risk management; and
  • A tidal wave of interest among emerging generations in the nonprofit sector — for careers, volunteerism and engagement.

Another concept of this blurring relates to the need for nonprofits to see resources, talent, contribution and solutions in their nonprofit, community-based neighbors. In fact, it appears that risk management is no longer an “organization issue,” per se; you can have the best-laid plans, but if you aren’t aligned with your community, you risk vulnerability.

Additionally, so many recent security breaches point to the need for community-based solutions that are global, not just U.S.-centric.

Below is a diagram I raised with a faith-based nonprofit to demonstrate how its approach to risk might, more effectively, be to find greater impact through alignments within the local community.

Screen Shot 2016-01-25 at 1.41.00 PM

Engaging your community

Perhaps now is the time for “nonprofits” to change the semantics of their sector to a broader, community-based organization (CBO) concept. In fact, one idea that has emerged is an alternative label for a nonprofit: CBO.

Perhaps — as CBOs — we will more effectively live out our missions, starting with a positive, inclusive approach rather than a negative (“non”) dynamic. And, no doubt, we’ll better manage risk through these alignments.

Ultimately, we’re better off with collaboration!

Shifting ‘Healthcare’ to ‘Well Care’

New York City has been a leader in the future of healthcare. Listing calories on menus, banning soda sales in sizes larger than 16 ounces and now requiring a designation on menus for any items with more than 2,300 mg of sodium (or a teaspoon of salt) are, if you haven’t figured it out, great ideas. While they seem a bit big brother-ish, I applaud the intent.

Today’s healthcare is a losing battle. Incentives are completely misaligned. Providers get paid for dispensing care, and we keep introducing better — and more expensive — solutions that cure health conditions that inevitably develop as we age.

Today’s usage of the word “healthcare” is “care for the sick.” The only way we are going to solve our cost crisis is to change healthcare to mean “well care.”

By aligning incentives to encourage well care, the system will be a lot less frictional. So, how would this work? The HMOs of the 1980s and 1990s had it right. Provider reimbursement rates would be based in part on compliance by their patients. And providers would be free to decline to treat patients who, because of lifestyle choices, would affect their compensation.

Public awareness and support of this new well care normal can be tied to affordability, and I would envision a new class of coverage developing for those who opt in to a well care lifestyle. Accountability would be directly tied to affordability and also to provider choice. Seemingly insurmountable issues call for creative solutions. We need to change course now.

8 Steps to Beat All 8 CPCU Exams

Now that we got you excited based on earlier articles such as this one, and you’re ready to start CPCU today, here’s some guidance on how to actually get it done and survive the tests. This article is lovingly dedicated to “those poor souls studying for the CPCU designation,”

Please keep in mind that doing CPCU is very much like trying to eat an elephant; there’s only one way to do it, one bite at a time.

I asked my friend and all-around Wonder Woman, Carly Burnham, to share the strategies she used in completing the designation. I met Carly in 2011 when she was at a turning point in her career. She felt stuck in her position as a call center sales agent and wasn’t sure of the next step. She wasn’t even sure whether insurance was an industry she could make a career in. She had an interest in underwriting but had no idea how to get there. We met through the Gen Y Associate Resource Group at Nationwide Insurance.


I could clearly see she was bright and hard-working and was looking for a challenge, so I asked her if she had heard about the CPCU. Over coffee, I told her all about why CPCU is awesome and convinced her to go for it. To make things even more interesting, I challenged her to do it in a year, while working full time and finishing a part-time MBA program. To my surprise, she took me up on it. Even more impressively, she met the goal and finished all eight tests in just short of 12 months.

When I talked to Carly about this article, she shared the following thought with me, “The CPCU is usually done as a self-study program, and if you haven’t tackled online courses or some other self study program, it can be challenging to know where to start. I was lucky to have your mentorship, and, looking back, I’d say these eight strategies were really what helped me meet the audacious goal that we set.”

  1. Set Your Own Timetable

Decide up front when you are going to finish your CPCU. If you don’t choose an end date, you could stretch the entire process out for YEARS. On average, people take at least two years to finish, but many insurance professionals have been working on their CPCU for longer than that. Decide when you want to be done and commit to the deadline. If you are trying to finish to advance your career, focus on finishing before you begin to apply for new roles. If you want to finish in time to attend the annual meeting in a certain city, set your end date as the last month that you can qualify for that meeting. Having an end date and an understanding of your motivation will help you push through challenges along the way.


  1. Find an Accountability Partner

Your accountability partner may be a current CPCU or someone who is also pursuing the designation. He or she should be someone with whom you can share the reason for your pursuit of the CPCU. If he or she understands your motivation, it will be easier to push you to stay the course and finish by your goal date.


  1. Create a Spreadsheet on Google Drive to Share With Your Accountability Partner

On this spreadsheet, you will want to map out the dates that you will take each exam to achieve your goal date. Once you have mapped out exam dates, you can work backward using the chapter summaries at theinstitutes.org to identify when you will read each chapter of the text for the exam and when you will take your practice exams.

  1. Devote Certain Hours of Your Day to Studying

When studying, consistency is key. If you focus best at the beginning of the day, set aside an hour or two in the morning and commit to showing up the same place each day to read the chapters that you laid out in your spreadsheet for this day. Choose the time that works best for you, but aim to make it a routine, so that you don’t have to decide every day that you are going to stay at the office an extra hour or go to the coffee shop before work starts. If it’s part of your daily rituals, you won’t have to use willpower to get your studying done.

  1. Read the Entire Book

First, read The Institutes’ guide to preparing for their exams. As they mentioned, there is no single way to prepare. But I found that reading the entire book first helped me establish a base level of knowledge. Next, I would take a practice exam, as a sort of pre-test. The practice exam would let me know which chapters I was weak on. With this information, I could pinpoint the best way to spend my time. If I needed to, I could re-read chapters and test on those individual chapters until I felt comfortable moving on to the next chapter.

  1. Use the Mobile App

The Institutes have created a mobile app called Smart QuizMe for Apple and Android phones. Using this in any spare time you have will also help you feel confident with the information and the style of questions on the practice exams. You can set the app to run through certain chapters or the whole book depending on what you want to focus on. Because it’s on your phone, you can use it even if you only have five or 10 free minutes. The questions on the app tend to be clustered, so question 100, 101, 102 and 103 might be the same question with only one word changed. This really teaches you how changing a small part of a question can result in a different answer. The app is particularly helpful for the most detail-oriented tests, especially 520. One word of warning: Don’t depend entirely on the app without doing the online practice exams; you could easily fool yourself into thinking you’re ready when there are significant parts you haven’t yet mastered.


  1. Pass the Practice Exams a Few Times

Leave at least at least four and preferably a full seven days before the real test to take the online practice exams. Passing the exams will give you the confidence you need to take the exam without feeling rushed or unsure of your answers. The practice exams are very similar and sometimes harder than the actual exams. You will also have the opportunity to research any questions you missed and make sure you understand the concept before test day. Nothing beats going into the real test feeling confident, and nothing gets you more confident that the online practice exams. The practice exams are the key to the kingdom!

  1. Get the Proper Support

Make sure your family, close friends and other support systems fully understand that the CPCU is a BIG DEAL and that you will require lots of support while you get through it. Make sure they know this isn’t just another license or minor designation but a serious commitment that only 4% of people in our industry have gotten through.

To help my family understand, I explained that I was pursuing something akin to a master’s degree in insurance, and I was doing it in a year, while working 40 hours a week — most people outside the industry will need the designation explained in a similar way to fully understand the commitment you’ve made. Also, join the CPCU Candidates Facebook Group; they’ll provide you with tons of encouragement and answer your questions. Most importantly, you won’t feel like you’re the only person in the world putting yourself through the challenge of CPCU.

One Bonus Tip:

Know ahead of time that 540 – Finance and Accounting for Insurance Professionals is a special beast of a test (see artist’s rendering below). To ensure proper preparation for this one, allow yourself 50% more time than usual; so if you have given yourself two months for 500, 520 and 530, give yourself three months for 540. Buy a financial calculator (preferably the Texas Instruments BA-II Plus) and learn how to use it. The book won’t teach you how to use it, so you have to get help from someone who knows how to use it – if you have a hard time finding someone, there are decent tutorials on YouTube or at Atomic Learning. Use the calculator for all the practice tests, and then don’t forget to bring it on exam day!

I am passionate about spreading the word about the CPCU, and I was glad to have met Carly at that turning point in her career. Her commitment has paid off, and she has recently became a commercial lines underwriter at Erie Insurance; she’s loving the new job, and she’s fully committed to the industry. She credits her designation with helping her get the interview but says it goes even further than that: “The knowledge that I gained in earning my CPCU gave me the confidence to pursue a true career in the industry, and I now use the knowledge every day in my role as an underwriter. This designation gives you a broad understanding of the industry, but it also gives you practical, technical information that is essential to being a successful insurance professional.”

If you’ve had similar experiences, share them in the comments. If you have questions about the pursuit of your CPCU, message me. There are really no excuses left. Let’s get going and get your CPCU. You will never regret it.

Good job making it to the end of our longest post yet; as a reward, here is another image for the awesome metaphor of eating an elephant one bite at a time.


Who Is Your Chief Customer Officer?

In my role as market connector, I constantly meet people with all kinds of job titles, many of which did not exist even a few years ago. Some reflect a “cool” factor more than substance. Others signal strategic intent translated into an organizational decision. Recently, there’s been a burst of senior-level titles speaking to a new view of the customer. These include chief customer officer, chief customer experience officer and variants.

What are these roles about, and what value can they bring?

I’m not one to believe that titles by themselves matter much. In fact, I think the hierarchical behavior and entitlements that titles convey can be destructive to the collaborative environment needed to nurture enduring, customer-centric results.

But I also think it’s worth any executive’s time to contemplate the value of an empowered chief customer or experience officer and why other companies might be going down this path. Is it right for you? Is it real or is it window dressing? What can it potentially accomplish? Who should wear this hat to generate impact?

Why have a chief customer or experience officer?

Last month, I wrote about marketing myths and truths in an age of technology disruption and customer empowerment. Any leader should look at all of her resources – including people, dollars and infrastructure – and drive the changes required to attract and win the loyalty of target customers. For the vast majority of companies, the status quo is not the answer.

The chief customer or experience officer defines and steers the transformation by defining the execution plan aligning resources to deliver on the customer needs that matter. The plan should link customer priorities to a business’ financial objectives. He mobilizes employees, and his appointment can be a powerful signal from the CEO that the customer must be at the center of everything the company does.

Why won’t status quo work?

Traditional company structures were not built around the customer. Companies were organized for efficiency, control and predictability. The problem is that these priorities by themselves end up constraining the agility fundamental to delivering a productive, positive customer experience – one that motivates trial, purchase, recommendation and other behaviors reflecting loyalty to a brand.

The chief customer or experience officer provides leadership to help the company embrace agility as key to a customer experience that is managed to deliver business results – top and bottom line. At the same time, she must partner with peers to ensure the company does not lose sight of the basics of efficiency and control, especially to meet regulatory mandates that are “lights on” needs in the insurance sector.

What’s going on in your organization?

Start by asking yourself a few questions:

  • When decisions are being made, are employees at all levels and functions contemplating the impact on the customer? Do employees shape their actions around delivering value to the customer? Does anyone ask, “What’s the impact on the customer?” And, do other participants in the conversation care?
  • Does your organization act as though the right experience will deliver business results, or do people express the belief that doing what the customer wants is a tradeoff to financial results? If the latter is the case, you are likely receiving a strong signal that your journey to a great customer experience may require a sharp pivot.
  • Do you measure customer satisfaction across the entire experience? Does your methodology gather only customer service feedback for the subset of customers who are reaching out, or do you look at channel results holistically?
  • Are you using a methodology that connects customer satisfaction to the end-to-end experience of doing business with you all the way through to how satisfaction levels directly affect financials? A “yes” to this last question means you are closer to best-in-class practices.

What’s right for my organization?

If you want to steer your organization toward being truly customer-focused – if you believe this is a must-do in today’s economy – a chief customer or experience officer provides one approach that can be a mobilizing force for change.

As with any business goal, the buck has to stop with an individual, and that individual has to be someone below the CEO for day-to-day actions toward results. The title matters less than the accountability, leadership profile and empowerment of whoever is given this mission.

Be aware that merely appointing someone to a role accomplishes little. Driving customer metrics requires the same kind of ownership as any result you are trying to achieve. But such an appointment does not absolve the CEO or the rest of the C-suite from taking accountability for the transformation to customer-centricity. The rest of the executive team must align with the chief customer or experience officer’s plans and engage to drive action among the people they lead.

What does it take to set the role up for success?

This role is not for the faint-hearted. Frankly, the technical skill background can be just about anything. The make-or-break will be the leadership profile: an influencer, a collaborator, a team-builder and someone who is a dot-connector, a naturally customer-obsessed person who is curious enough to always ask, “What would our customers want/say/think/do?” And an astute observer who recognizes that great experiences come from deep understanding of people’s behavior – how they complete tasks and go about solving life’s daily problems.

Then there are the must-dos for any role to be taken seriously and set up for success – real resources to get the job done, shared expectations of time-to-impact and metrics that link your customer strategy to bottom-line impact along with the IT capability to get at the metrics with accuracy on a routine basis.

What’s the downside?

The chief customer or experience officer is a change agent. As in any change agent role, there are above-average risks to carrying out the mission with success. As in any transformation role there will be conflict. Make the conflict a stimulus for constructive steps forward, and see it as a way to achieve big breakthroughs, but be ready for conflict to happen. Strong leaders know how to convert conflict into opportunity.

The bottom line

Even exploring the value and impact of a chief customer or experience officer means you recognize the need to boost your organization’s customer focus.

Remember, being customer-focused doesn’t mean giving customers anything they want. It’s about:

  • Zeroing in on the audience you want to serve
  • Being able to identify audience members so you can establish and build authentic relationships
  • Inspiring them to see your brand and offerings as relevant to their lives
  • Achieving win/win outcomes for these individuals as well as for your business.

What business does not want to make this happen?

So, what are you waiting for?