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The World Owes Me Nothing

I am fortunate to live amid incredibly smart, driven, hard-working people who care about making an impact. Sometimes, some of them trust me enough to come to me for business and career advice.

Before every such meeting, I try hard to set aside my beliefs and biases and just listen. For me, it takes genuine effort to actually listen and remember that listening to someone isn’t really the same thing as just waiting to talk. I do my best not to make someone clearly in pain feel good with the formulaic “10 steps to happiness” psychobabble.

The problem usually starts with a clear symptom : “I hate my boss,” “I don’t have faith in my CEO,” “I deserve more equity,” “I need a bigger title,” etc. Having been in their shoes as an employee, a manager, a CEO, I’ve dealt with many of these feelings myself, so I can often relate to where people are coming from. I suppose that’s the real value of talking to someone—it helps separate problems from symptoms, and knowing the problem is half the solution.

A lot of times, what I discover in these conversations—once we talk through what’s going on and dig deeper into the situation—is that these surface emotions are just really reflections of the real problem, which is larger, more corrosive and harder to admit.

Entitlement.

The problem is we all feel entitled to something. Entitlement is a subtle and implicit belief that we deserve things, that the world owes us something.

The truth, something we all know, is that the world owes us nothing. However, it is hard to remember that at the right time, when you are feeling entitled.

I am not suggesting that having expectations, desires and sometimes taking things for granted is unnatural or even bad. I am saying that if you stop for a minute and zoom out, you’ll start to realize that a lot of your pain goes away if you stop feeling entitled and that dealing with the reality of your situation becomes a heck of a lot easier.

So the next time you are feeling upset about something, try it . Zoom out and tell yourself, “The world owes me nothing,” and see what happens.

When I do it mindfully, I can tell you I feel a sudden emptiness, followed by a delightful lightness. Sure, it may only last for a minute, but that little lull puts things in perspective, replacing the heaviness of “I deserve better” with “I am grateful for what I have. There will always be more I want. It will never be enough, but it will all be OK.”

Try this for a week: Every morning, tell yourself , “The world owes me nothing.” See if it subconsciously affects your thoughts, alters your tone and orchestrates your actions throughout the day. Note how that sets you up for a simple but powerful call of duty, to be useful to people around you—your family, friends, co-workers, customers, investors, neighbors, strangers, everyone! Be grateful for the many, many things you have.

We begin life with a cry. In the end, the only thing that matters is how many people cry when we die. Or maybe that, too, is an entitlement.

Originally published on Medium

trends

InsurTech Trends to Watch For in 2016

The excitement around technology’s potential to transform the insurance industry has grown to a fever pitch, as 2015 saw investors deploy more than $2.6 billion globally to insurance tech startups. I compiled six trends to look out for in 2016 in the insurance tech space.

The continued rise of insurance corporate venture arms

2015 saw the launch of corporate venture arms by insurers including AXA, MunichRe/Hartford Steam Boiler, Aviva and Transamerica. Aviva, for example, said it intends to commit nearly £20 million per year over the next five years to private tech investments. Not only do we expect the current crop of corporate VCs in the insurance industry to become more active, we also expect to see new active corporate VCs in the space as more insurance firms move from smaller-scale efforts — such as innovation labs, hackathons and accelerator partnerships — to formal venture investing arms.

Majority of insurance tech dealflow in U.S. moves beyond health coverage

Insurance tech funding soared in 2015 on the back of Q2’15 mega-rounds to online benefits software and health insurance brokerage Zenefits as well as online P&C insurance seller Zhong An. More importantly, year-over-year deal activity in the growing insurance tech space increased 45% and hit a multi-year quarterly high in Q4’15, which saw an average of 11 insurance tech startup financings per month.

In each of the past three years, more than half of all U.S.-based deal activity in the insurance tech space has gone to health insurance start-ups. However, 2015 saw non-health insurance tech start-ups nearly reach parity in terms of U.S. deal activity (49% to 51%). As early-stage U.S. investments move beyond health coverage to other lines including commercial, P&C and life (recent deals here include Lemonade, PolicyGenius, Ladder and Embroker), 2016 could see an about-face in U.S. deal share, with health deals in the minority.

Investments to just-in-time insurance start-ups grow

The on-demand economy has connected mobile users to services including food delivery, roadside assistance, laundry and house calls with the click of a button. While not new, the unbundling of an insurance policy into financial protection for specific risks, just-in-time delivery of coverage or micro-duration insurance has already attracted venture investments to mobile-first start-ups including Sure, Trov and Cuvva. Whether or not consumers ultimately want the engagement or interfaces these apps offer, the host of start-ups working in just-in-time insurance means one area is primed for investment growth in the insurance tech space.

Will insurers get serious about blockchain investments?

Thus far, insurance firms have largely pursued exploratory investments in blockchain and bitcoin startups. New York Life and Transamerica Ventures participated in a strategic investment with Digital Currency Group, gaining the ability to monitor the space through DCG’s portfolio of blockchain investments. More recently, Allianz France accepted Everledger, which uses blockchain as a diamond verification registry, into its latest accelerator class. As more insurers test blockchain technologies for possible applications, it will be interesting to monitor whether more insurance firms join the growing list of financial services giants investing in blockchain startups.

Fintech start-ups adding insurance applications

In an interview with Business Insider, SoFi CEO Mike Cagney said he believes there’s a lot more room for its origination platform to grow, adding,

“We’re looking at the entire landscape of financial services, like life insurance, for example.”

A day later, an article on European neobank Number26, which is backed by Peter Thiel’s Valar Ventures, mentioned the company would like to act as a fintech hub integrating other financial products, including insurance, into its app. We should expect to see more existing fintech start-ups in non-insurance verticals not only talk publicly but also execute strategic moves into insurance.

More cross-border blurring of insurance tech start-ups

Knip, a Swiss-based mobile insurance app backed by U.S. investors including QED and Route66, is currently hiring for U.S. expansion. Meanwhile, U.S. start-ups such as Trov are partnering and launching with insurers abroad. We can expect more start-ups in the U.S. to look abroad both for strategic investment and partnerships, and for insurance tech start-ups with traction internationally to expand to the U.S.

Meeting a Litmus Test for Disruption

The insurance industry has been talking a lot about disruption over the past couple of years. But, as with many things, insurance is a late arriver to the disruption party. Clayton Christensen helped kick off an earnest discussion of the topic back in 1997 with his first book, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. In his 2003 book, The Innovator’s Solution: Creating and Sustaining Successful Growth, he proposed this question as part of a litmus test for the disruptive potential of ideas:

“Is there a large population of people who historically have not had the money, equipment or skill to do this thing for themselves, and as a result have gone without it altogether or have needed to pay someone with more expertise to do it for them?”

While Christensen has recently gotten some flak for being too dogmatic in his criteria for what constitutes a truly “disruptive innovation” (perhaps succumbing to his own definition of disruption?), the question actually describes very well how insurance has historically operated. It is a complex, mysterious product that has forced consumers to rely on the expertise of an agent or company rep to buy, understand and use it.

The increasing transparency and empowerment afforded by data, the Internet and digital technologies have helped level the playing field. Yet the majority of insurance buyers still rely on a live person, usually an agent, to make sure they’ve made the right decisions and to close the sale.

The ever-growing field of companies and investors eyeing the insurance industry sees this issue as one of the greatest opportunities for disrupting the industry’s incumbents. Some companies still take comfort in the fact that the insurance industry has difficult and unique barriers to entry, chiefly its complex regulatory environment and huge capital requirements to cover losses. But the size of the opportunity — $1.1 trillion in net written premiums in the U.S. in 2014, according to SNL Financial – is an incentive that is spurring a lot of creativity, innovation and investment that will help overcome these barriers.  It’s a question of when, not if.

But it’s also still a question of how. How will the insurance business model change to at least meet the litmus test described by Christensen? It’s clear that changes are unfolding because of ambitious outsiders as well as creative and forward-thinking industry insiders.

So what should insurers do? How should they respond? Majesco’s newly released research report (based on a survey conducted in late 2015 with its customers), 2016 Strategic Priorities: Impactful Pace of Change, reveals that many insurers are monitoring potentially disruptive technology and business trends, but, unfortunately, few are actively preparing for the changes coming. Four overall themes emerged from the survey responses:

  • First, there is a clear recognition of the shift to the customer being in control and the importance of being customer-driven.
  • Second, there are significant barriers and limitations on current business capabilities that must be overcome to survive — let alone to grow and compete — starting with transformation of legacy systems that were built around products rather than customers.
  • Third, there are potential blind spots around customer expectations, technology and competition that are lurking around the corner of the not-too-distant future, creating forceful disruption.
  • Fourth, the pace and impact of change have intensified the need for agility, innovation and speed.

While business transformation progress is being made, significant work is necessary to compete in a customer-driven age. At the same time, the world is changing rapidly, and new expectations, risks, technologies, competitors and innovations threaten to significantly disrupt the insurance business landscape. For those unprepared, the change could be devastating.

The insurance industry is recognizing more and more that it is a target for potential disruption, because consumers are demanding – and getting – more transparency and responsiveness from company after company. Changes are being driven from both inside and outside the insurance industry along several different dimensions like technology, products, new players and partnerships. There are formidable hurdles for new entrants, but the incentive is huge for those who can remove the complexity of insurance and increase the value proposition for customers.

Insurance companies need to move beyond monitoring these developments to actively determining how the future will look. To prepare and respond, insurance companies must adroitly do two things simultaneously: modernize and optimize the current business while reinventing it for the future. It’s like changing the tire on a car while you’re driving at full speed down the freeway. Those companies that can do this will transcend merely surviving in an increasingly competitive industry and become the new leaders of a re-imagined insurance business.

Read more about how companies view these and other strategic priorities in Majesco’s research report, 2016 Strategic Priorities: Impactful Pace of Change.

I’m Betting You Won’t Hit That Number

In Bay of Pigs, the Untold Story, Peter Wyden reveals that when asked by President Kennedy to assess the CIA invasion plan, the U.S. Joint Chiefs of Staff responded that it had a “fair chance” of success. Kennedy took that as a positive assessment. Instead, the Chiefs meant that they judged the chances of success as “3 to 1 against.” But the misunderstanding wasn’t clarified at the time.

Unfortunately, Kennedy’s misinterpretation of the Joint Chiefs’ assessment is not uncommon. For whatever reason, they gave a qualitative answer. Perhaps “fair chance” was well-understood terminology at the Pentagon. Kennedy certainly didn’t get the intended meaning.

A straightforward method to dispel such confusion comes from my friend, Gordon Bell. Gordon is a pioneer in the computer industry, having developed the first minicomputer at Digital Equipment and having managed that company’s 4,000 engineers. After leaving Digital, Gordon headed computer science research at the National Science Foundation, where he was instrumental in the commercialization of the Internet. After that, Gordon became an active “angel” investor in start-ups.

Gordon has a wonderful bluntness about him. At Digital, he was known for saying things such as, “The most reliable parts of a computer are the ones you leave out.” As an investor, he used that bluntness and found one remarkably simple way to at least see whether innovation proponents had the courage of their convictions.

For example, when someone made a presentation on critical assumptions and forecasts underpinning a proposed strategy, Gordon would zero in on one number and ask the CEO: “Wanna bet? A side bet, you and me, for $1,000. I’m saying you won’t hit that number.”

If the CEO gulped, Gordon knew that in his heart he had doubts.

Even though executives clearly take the issues seriously when they are making corporate commitments of millions or billions of dollars, there’s something about betting your own money that makes you think twice.

More generally, framing forecasts as personal bets forces those involved to be very clear. Also, the use of odds in bets forces everyone to be precise about probabilities. Had President Kennedy, for example, forced the Joint Chiefs to quantify their estimate, he would have realized that their “fair chance of success” estimate really translated to a “three in four” chance of failure.

Structuring bets clarifies time estimates, as well. For example, senior managers at one client generally held the assumption that an important revenue stream from information was going to go away as the information became available from public sources online. The assumption was so widely held that no one thought to get more specific, until we asked everyone to write down how long they thought it would be before the revenue fell below a certain level. Some thought the group was six months away from that level. Some thought six years. Getting the assumptions on the table led to a valuable discussion that produced a sharper strategy.

I’m not suggesting that personal bets should replace rigorous analysis. Still, betting on the most critical assumptions upon which a complicated, ambitious strategy depends serves as an invaluable gut check on likelihood of overall success. If you’re not willing to bet on it, at acceptable odds, it is important to figure out why.

To Shape the Future, Write Its History

[Editor’s Note: While my frequent co-author is writing here about how companies, in general, can use a powerful tool to drive change, all those involved in the insurance ecosystem should pay particular attention. The tool, which draws from two books that Chunka and I wrote together — found here and here — is most valuable in industries where it’s clear that dramatic disruption is coming but where the form of that change isn’t yet defined: the very definition of insurance these days. — Paul] 

“History will be kind to me,” Winston Churchill said, “for I intend to write it myself.”

When it comes to corporate innovation, my experience is that history will indeed be kinder if leaders take the time to write it themselves—but before it actually unfolds, not after.

Every ambitious strategy has multiple dimensions and depends on complex interactions between a host of internal and external factors. Success requires achieving clarity and getting everyone on the same page for the challenging transition to new business and operational models. The best mechanism for doing that is one I have used often, to powerful effect. I call it a “future history.”

Future histories fulfill our human need for narratives. As much as we like to think of ourselves as modern beings, we still have a lot in common with our earliest ancestors gathered around a fire outside a cave. We need stories to crystallize and internalize abstract concepts and plans. We need shared stories to unite us, and guide us toward a collective future.

Future histories provide that story for companies.

The CEO of a major financial services company occasionally still reads to internal audiences parts of the future histories that I helped him and his management team write in early 2011. He says they helped him get his team focused on the right opportunities. As of this writing, his company’s stock has almost doubled, even though his competitors have had problems.

To create future histories, I have executive teams imagine that they are five years in the future and ask them to write two memos of perhaps 750 to 1,000 words each.

For the first memo, I ask them to imagine that the strategy has failed because of some circumstance or because of resistance from some parts of the organization, investors, customers or other key stakeholder. The memo should explain the failure. The exercise lets people focus on the most critical assumptions and raise issues without being seen as naysayers. There is usually no lack of potential problems to consider, including technology developments, employee resistance, customer activities, competitors’ actions, governmental actions and substitute products. Articulating the rationale for failure in a clearly worded memo crystallizes thinking about the most likely issues.

To heighten the effect, I sometimes do some formatting and structure the memo like an article from the Wall Street Journal or New York Times. Adopting a journalist’s voice helps to focus the narrative on the most salient points. And everybody hates the idea of being embarrassed in such publications, so readers of the memo pay attention to the potential problems while there’s still time to address them.

The second memo is the success story. What key elements and events helped the organization shake its complacency? What key strategic or technological shifts helped to capture disruptive opportunities? How did the organization’s unity help it to out-innovate existing players and start-ups? This part of the exercise encourages war-gaming and helps the executive team understand the milestones on the path to success.

Taken together, the future histories provide a new way of thinking about the long-term aspirations of the organization and the challenges facing it. By producing a chronicle of what could be the major success and most dreaded failures, the organization gains clarity about the levers it needs to pull to succeed and the pitfalls it needs to avoid.

Most importantly, by working together to write the future histories, the executive team develops a shared narrative of those potential futures. It forges alignment around the group’s aspirations, critical assumptions and interdependencies. The process of drafting and finalizing the future histories also prompts the team to articulate key questions and open issues. It drives consensus about key next steps and the overall change management road map. In a few weeks’ time, future histories can transform the contemplated strategy into the entire team’s strategy.

Future histories also facilitate the communication of that shared strategy to the rest of the organization. Oftentimes, senior executives extend the process to more layers of management to flesh out the success and failure scenarios in greater detail and build wider alignment.

Future histories take abstract visions and strategies and make them real, in ways that get people excited. They help people understand how they can contribute—how they must contribute—even if they aren’t directly involved in the innovation initiative. People can understand the timing and see how efforts will build.

People can also focus on the enemies that, as a group, they must fend off. These enemies may no longer be saber-toothed tigers, but they are still very real and dangerous to corporations. “Future histories” unite teams as they face the inevitable challenges.