Tag Archives: leadership

The End of Leadership as We Know It?

As we think about the changes that will inevitably happen within the insurance industry, we also have to recognize that these changes will be reflected in a transformation of the leadership function.

Of course, we have to distinguish between leadership and organizational power. “Power” usually comes from the ability to influence and give direction to others and through hierarchy. The leadership role is often viewed as some form of organizational hero who has the ability to take an organization from a status of failure or inertia, to one of success. But is this hero model still valid, and will it be valid going forward?

Isn’t one of the main problems that the pace and complexity of change is so dramatic that so-called leaders are no longer able to draw on their own experience to help create a compass for the organization? And without experience or adequate understanding, is there a risk that traditional leaders might simply revert to what they know, and create a drag on the business rather than provide the catalyst to drive it forward? In creating this drag, don’t the leaders themselves run the risk of personal criticism if their performance or ambition starts to dwindle?

See also: Inventing Your Future: A 3 X 3 Approach  

The paradox is that leadership can be both the cause of organizational weakness and also the cure if implemented effectively.

Emerging theories of leadership point to a more devolved, flexible and decentralized model of leadership, a model that demands a shared, distributed and relation-based leadership ethos with the emphasis on collaboration – as opposed to the old hierarchical model.

Has leadership become a process rather than a position? If that is the case, then does such an environment present us with the opportunity for a more fluid, richer leadership environment? No more Eureka moments, but rather that the leadership of an organization is constantly shifting and is a reflection of the culture and shared values of the business?

And does it mean that anyone with the word “leader” in their job title – like mine – is toast? Yes, probably, unless as a leader you are personally prepared to change. If leadership is to exist in any form, then it will be by example. Leaders need to show how to collaborate, innovate and be agile. Leadership is no longer about holding the sword and shouting “follow me” or “do what I say.”

See also: The Future of Insurance [Infographic]  

As we increasingly focus on a world of data and analytics, and the associated democratization of understanding and insight, we have to accept that this has the potential to create the collapse of organizational hierarchy. Maybe that’s not a bad thing. Data and democratized analytics inevitably force us to think about leadership in a different way. It might also force us to think about our own careers and professions in a different way, as well.

How we communicate these very major issues is also critical. If we accept that the big data genie is out of the bottle, then we must also accept that the metaphorical Pandora’s Box has been opened. Classicists will know that as Pandora’s Box was opened, then all the evils of the world were allowed to escape from that box. Of course, it’s not quite so dramatic – but will big data and analytics provide the catalyst for a revolution in what we mean by leadership?

9-Step Model for Data Analysis

When training analysts how to deliver more value, two topics have proved the most popular.

One is training in Socratic questioning techniques, to get to the real business need.

But, as many analysts have “fallen into” this line of work, rather than making a conscious education and career choice, few have been trained in methodologies. With the exponential growth of insight analysts, marketing analysts and data scientists, the emphasis appears to be on just coding skills and software mastery. Where this is the case, too often analysis is an unplanned art, with unreliable timescales and too many “rabbit warrens” being explored. It is perhaps for this reason that the other most popular topic is a high-level structure for analysis.

I call this approach the 9-step model for analysis. It comprises the following steps:

1. Socratic Questioning: getting to real business need

2. Planning & Design: defining approach and gathering resources

3. Stakeholder Buy-In: getting agreement on what will be delivered

4. Data: ensuring the needed quality data and learning from it

5. Analysis: including exploratory data analysis and hypothesis testing

6. Insight Generation: converging evidence to get to deeper insights

7. Stakeholder Sign-Off: support for or refining recommendations

8. Storytelling & Visualization: capturing hearts and minds for action

9. Influencing for Action: ensuring appropriate action is taken

What’s your experience of improving the capability of your customer insight team? Have you focused on developing the skills outlined above or other areas? Please do share your tips, too.

Agents: What’s That Spot on Your Face?

In December 2008, a spot appeared on my face. It looked like a large freckle. I ignored it.

In March 2009, Floyd and I were having breakfast. He asked, “What’s that spot on your face?” I answered, “A freckle.” He then responded, “What are you going to do about it?” My reply, “Not a thing – it’s just a freckle.” We debated the issue for a few minutes longer, but I’ll save you the details.

The next day, Floyd called to announce my appointment with Dr. Patout (a local dermatologist) in a few weeks. He had called another doctor, but she couldn’t see me until August. Dr. Patout had been booked up until August, as well, but Floyd intervened with her husband (Floyd’s tennis partner) and got me in earlier.

I agreed to the appointment more to shut Floyd up than as a concern for my health. The next week, Dr. Patout removed the “freckle” and sent it to the lab to test. I still felt this was much ado about nothing.

At 1:30 p.m. on April 20, I was walking out of the Regions Insurance Office in Baton Rouge. My phone rang, and I heard a statement I’ll never forget. “Mike, this is Dr. Patout. The test results are in; it’s melanoma.” I took a breath and said, “That’s the kind of cancer I don’t want – right?” She answered: “That’s right. Come see me tomorrow.”

Dr. Patout reassured me that we had gotten it early. She sent me to Dr. Walker, who cut a double-quarter-sized hole in my face and sent this specimen off for more tests. Two weeks later, I got the good news I had prayed for – “Mike, we got it all.” Come see me every three months.

Suddenly, my attitude changed. Going to the doctor and listening to her recommendations were now a priority, not a pain in the butt. On the third visit, Dr. Patout explained, “Mike, understand that if we had waited until August, you’d be dead.” This was (and still is) a sobering thought….

Floyd saved my life. He didn’t find the cancer, and he didn’t cure it. Floyd’s role was more important than that – he was the gadfly who motivated me (read: nagged me) to do what needed to be done.

Now I want to ask you two most important questions – “Is there a spot on the face of your organization?” and “What are you going to do about it?”

In March 2009, I felt good. I looked good (except for a little spot on my face). I was one admonition away from a quick and painful death! THANKS, FLOYD!

The good news is that you don’t have to die, either!

The bad news is that to avoid dying you must change. Change is difficult – the excerpts from the article “Change or Die” by Alan Deutschman from Fast Company Magazine (www.fastcompany.com) explain the challenge of change:

“What if you were given that choice? For real. What if it weren’t just the hyperbolic rhetoric that conflates corporate performance with life and death? Not the overblown exhortations of a rabid boss, or a slick motivational speaker, or a self-dramatizing CEO. We’re talking actual life or death now. Your own life or death. What if a well-informed, trusted authority figure said you had to make difficult and enduring changes in the way you think and act? If you didn’t, your time would end soon — a lot sooner than it had to. Could you change when change really mattered? When it mattered most?

Yes, you say?

Try again.

Yes?

You’re probably deluding yourself.

You wouldn’t change.

Don’t believe it? You want odds? Here are the odds, the scientifically studied odds: nine to one. That’s nine to one against you. How do you like those odds?”

I say this in particular for independent agents. What matters with independent agencies is INDEPENDENCE, the entrepreneurial spirit of this group and its members. You as individuals and operating entities have been declared dead or dying by the experts for decades. You’re prospering – so why change now?

The answer is simple – the marketplace you serve is changing. This is all about people and culture – not products and services. If you haven’t noticed, the Gen Y and whatever follows are much different than their older siblings, parents and grandparents. They are taking charge of the market as we are forced to relinquish control.

Address that “freckle” or die.

How Milton Friedman Got It Wrong

Add Nobel Prize winner, economist Milton Friedman to the list of smartest guys in the room who said, did and taught the dumbest things.

Just what did Friedman say in 1970 that American leaders in 2015 have become so infatuated with?

Here it is. Word for word.

“When I hear businessmen speak eloquently about the ‘social responsibilities of business in a free-enterprise system,’ I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends; that business has a ‘social conscience’ and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are — or would be if they or anyone else took them seriously — preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”

Friedman actually said this stuff about businesses having no social responsibility. And American leaders believed it, and then acted on it.

The result?

It took 45 years, but American leadership finally created for today’s knowledge workers– but not themselves, of course — what University of Massachusetts Professor William Lazonick refers to as “profits without prosperity.” The problem isn’t just the fox guarding the hen house. This is the fox in the hen house, waiting for the chickens to come home to roost.

Sadly, both for American employees and for Friedman, the well educated economist’s theory has for years replaced the golden egg (continuously improving people and process, which should have come first) with the smell of rotten eggs (the remnants of command and control). The evidence: America’s all-time-low employee engagement, our virtually stagnant economy and wage deflation.

American leadership’s hen house now appears, instead, to be more of a dog house.

Let’s face it, we can’t compete globally because modern leaders have failed to capture and engage man’s curiosity and creativity. Because if they had, we would have exchanged our arrogance for our humility, and listened to learn rather than tell. We’d be continuously improving people, because learning comes from people, and improvement comes from learning. Which, in turn, comes about from the detection and correction of errors in our thinking. And we’d be using that employee knowledge to show leaders where wasteful activities exist,  destroying the American people, their personal productivity and their well-being.

I suppose it was easier for Friedman to assign blame to the “intellectual forces…undermining the basis of a free society these past decades,” rather than teach executives the true human value of respect and continuous improvement. Especially when today’s executives earn 300 times more than those they serve.

Who could successfully argue that paying executives so much money doesn’t make their companies better?

Maybe Japanese executives like CEO Akio Toyoda of Toyota, who in 2013 earned just $2.9 million on $18 billion of profit. Respecting people; improving people; and improving process and wasteful activities that affect people. And, of course, selling cars to — of all the crazy things — more and more people.

Seems like people do matter, Mr. Friedman. They’re called customers and employees, fathers and mothers, friends and family.

The Japanese circle of Kai and Zen — the art of making change through continuous improvement — is something we need more of in America and throughout the world.

Let’s stop turning to pontificating prognosticators: today’s Tarot card readers using computer-driven analytics. The kind now used to determine people’s job security and personal productivity, especially average people when the time comes for their annual review.

Let’s stop teaching children, employees and, sadly, future leaders, the wrong things about man’s intrinsic motivation.

Let’s stop sending the message to society that man’s intrinsic value is irrelevant. An unnecessary component in improving this strictly extrinsically valued society.

In a 1991 article written by Alan Robinson from University of Massachusetts and Dean Schroeder from Valparaiso University paid close attention to the effective use of employee suggestions. Turns out, man’s intrinsic value in other cultures and countries is extrinsically valuable to leaders and stockholders.

Japanese employees turned in 32.5 suggestions per person. American employees turned in 0.11. American leaders implemented just 37% of the employee’s recommendations, while Japanese leaders implemented 87%.

American employers were too busy to listen, and employees too disengaged to contribute.

Meanwhile, America was losing the luster on her once global competitiveness crown, and she didn’t understand why.

Perhaps emphasizing our need to nurture man’s intrinsic value over his lifetime, not just nurture his extrinsic net worth quarter by quarter, still makes sense. Especially if we’re going to improve one another, ourselves and our ability to compete in the global economy. And in that distinct order.

The results of America’s inability to compete today are simply the consequences from the consistent leadership message sent to the willing workers of today and yesteryear: We have little value for your mind, your heart or your soul. Your value to corporate America is, strictly speaking, only from the neck down. Don’t speak or think; we know what’s best for you.

A message better understood by reading Steven Denning’s, Forbes 2011 article, titled, “The Dumbest Idea In The World — Maximizing Shareholder Value.

Or, if you are really ambitious, and enjoy learning from history, read Out of The Crisis. The anti-gospel to today’s American rhetoric on economic and management theory.

The author, Dr. W. Edwards Deming, railed against American leaders, who, way back beginning in the 1940s, assigned regularly occurring production variances to employee failings. This while leaders continued to miss the true causes behind increasing production costs and poor quality. Deming assigned blame for this directly to American leaders, calling for a radical transformation to how America leadership conducts business.

Deming knocked on American leadership’s door but couldn’t come in. Friedman’s puppets had dead-bolted it shut; double locks; top and bottom.

The unlimited asset of human capital Deming talked about — once free for the asking — has now all but dried up.

Will the first country that really wants our human capital please come forward?

As Professor Lazonick points out in his Harvard Business Review article, “Profits Without Prosperity,” during the previous 45 consecutive years, real wage increases, (wages adjusted for inflation) have not increased more than 2% in any three consecutive years but once. And that was during the Internet bubble of 1997, 1998 and 1999.

To put this in lay terms, my 24-, 22-, 20- and 18-year-old children now earn substantially less per hour for the same job that I performed in 1984. And even when I don’t adjust for inflation.

Got milk?

At least recently?

Mine’s going sour; seems I can’t afford a new gallon.

So what can we do differently to improve America’s ability to compete domestically and abroad?

Let’s turn to history and Gen. Douglas MacArthur, Taichi Ohno and the millions of other leaders and customers who collaboratively helped Japan become the second-most productive nation in the world, very shortly and efficiently, after World War II ended.

Rebuilding a nation ravaged by war, but then greatly improved upon by humans — and almost exclusively from the customer’s point of view — Japan used human capital and man’s intrinsic creativity and curiosity to compete on a global basis. Adding greater and greater value to the products American consumers frequently told the Japanese they wanted more of, by putting their money where American leadership’s mouth once was.

What did Gen. MacArthur demand American leaders (working in Japan to re-build the country and the culture) do with the Japanese’s people’s curiosity, creativity and craftsmanship after WWII ended?

He demanded leaders use the people’s intrinsic cultural talents to create sustainable, corporate and societal advantages. In fact, MacArthur required the culture of Japan — one of a highly curious, creative and respectful people — not be challenged, changed nor interrupted by American occupiers. He feared that creativity — Japan’s cultural backbone — could be lost forever.

Sorry, Mr. Friedman, you were wrong in 1970, and you’re even more wrong today.

People matter. All of them.

The Formula for Getting Growth Results

Real growth — not incremental improvements to last year’s numbers, but big results coming from new opportunities you manage to seize and commercialize — is hard to come by.

There are so many distractions, so many rabbit holes you can fall into — the lure of a cool technology, a move by a competitor that appears to be smart, a high-pressure conversation with a board member, a convincing argument from a colleague on why an idea will or won’t work or a CFO waving a red flag.

There are also so many ways to convince yourself that the status quo, at least for now, is tolerable — the comfort of a good current quarter, the reassurance of lots of money being plowed into new technology, the establishment of an innovation team or being recognized with an industry award.

But somehow, things still don’t feel quite right. You wonder why, in spite of upbeat business reviews from trusted employees, the new product pilots aren’t quite panning out. Some new start-up (or two, or three or more) seems to be whipping up a storm in the market, and you feel left in the dust (or left to contemplate paying a hefty premium to buy what someone else managed to build right under your nose).

What to do?

The answers are astoundingly simple, so simple, in fact, that they elude the very smart, big-school-degree types running around corporate America today. These leaders are fully in control of their growth destinies, yet all too often are unable to deliver and either blame some externality or create a mirage that all is well.

Here’s the three-step formula to get real growth:

  1. Define the customer problem you are solving. This is the first, almost painfully obvious step. Yet, consider how many people in big roles define their business’ marketplace value around internally generated definitions of value, claim to know customers’ needs but never talk to customers or allocate resources to deploy new technologies with no connection to how customers act or how they lead lives in which your business probably plays only a teeny, tiny role.

Let’s parse what this first step means.

  • Define: with absolute clarity, in a way that lets you understand the total scope of opportunity, not just what’s in front of your nose and linked to today’s P&L drivers.
  • The: one, with focus.
  • Customer: the people who take their wallets out of their pockets and give you their money – not the internal lobbyists.
  • Problem: a real pain point, not something that merely makes people feel good. People will prioritize getting rid of their pain as way more important than a gratuitous feel-good purchase.
  • You: the bigger you, the organization, mobilized around your singular focus.
  • Solve: dramatically better than anyone else, so you have a massive jump on others in the market who will chase after any good business opportunity to eat into or take over share.
  1. Establish the fundamentals to cultivate growth.
  • Governance: If your plan is to create big sources of growth, the CEO has to own the goal, including implementation, and hold the rest of the C-suite accountable. If not, accept your destiny as an incremental player, at best.
  • Accountability: Big new sources of growth will come from separate accountability outside the established P&L structures. No fault to the P&L leaders; their work is important and drives the company today. But the goals, timeframes, talent and implementation path to run a scale business is based on predictability, control and risk reduction. Contrast these attributes with what’s needed to spawn a big, new business: experimentation, failure, ambiguity and risk-taking. The established P&L priorities will always overwhelm the nascent ideas trying to grow into big future profit producers.
  • Talent: The people who are absolutely brilliant at running the machine are unlikely to be the same folks who will create the next big thing, and vice versa. That’s not personal, it’s the reality that we are all really good at some things and mediocre at others and should just avoid yet others. Be truthful about that, both regarding yourself and when evaluating others.
  • Metrics: Find the metrics that connect customer needs and wants to the customer actions driving the P&L. It’s a cop-out to say this can’t be done, and it’s easy to fall back on familiar but irrelevant metrics. Focus on customer behavior measurements to drive decisions. High-level reporting of income statement and balance sheet line items are interesting, and certainly matter to your investors. But they will blind you to the below-the-surface measures that matter – the real drivers that are moving every day as your customers make decisions affecting your performance whether or not you acknowledge them. Operate your business at that level, and you will drive your destiny.
  • Process: Industrial-strength processes that enforce predictability, control and risk reduction will steamroll over anything that doesn’t look exactly like what came before. Remember the definition of insanity often attributed to Albert Einstein: “doing the same thing over and over again and expecting different results.”
  1. Embrace and behave according to the mindset of a founder, or move on. In The Startup Playbook, author David Kidder cites the five qualities of the successful entrepreneur. These attributes apply equally well to leaders in any enterprise, not just what we have traditionally defined as start-ups.
    1. Know thyself. Your team’s success will be a direct reflection of your self-awareness and deployment of your own gifts to whatever opportunity you go after.
    2. Ruthlessly focus on your biggest ideas. Focus means laser-like drive against the beacon you see out in front of you that represents realization of your solution to the customer problem. But not to the exclusion of listening – being able to filter and apply that which is valid, without getting diluted by the well-meaning, but utterly useless opinions you will be offered. It’s a tightrope.
    3. Build painkillers, not vitamins. Back to Point 1. Solve a real problem. Don’t create a nice-to-have.
    4. Be 10x better. That’s Kidder’s estimate of how far ahead you have to be to outrun and outlast the inevitable competition.
    5. Be a monopolist. At least in mindset, think gigantically. Think about how you can own the market, not just create something that will satisfy a near-term demand.

Creating big sources of growth with real results can be predictable. You just have to follow the formula.

This post also appearing in Huffington Post.