Tag Archives: vision

Walking in the Shoes of Our Customers

I have spent the bulk of my software career as a member of the sales camp. My comfort zone is nurturing big ideas and helping to motivate clients to embrace change. It is thrilling to earn the right to engage with clients through the decision-making process, help clients gain confidence that transformation is possible and support the first steps in execution. Pretty lofty, I know.

But something happened this past year…the tables turned, and I became a software-buying customer. The loftiness of strategic vision met the cold, hard pavement of execution. I found the descent both rapid and eye-opening.

First, a little context — my sales enablement team convinced me the time had come to implement a learning management system (LMS). A LMS was a necessary platform for our team’s and company’s growth ambitions. A LMS system would eliminate a ton of manual processing, freeing resources on the team. At the same time, it would help us focus learner and management attention on building skills that matter, a benefit to the larger sales organization. I agreed, and, in doing so, I stepped into the shoes of our customers. For sure, a LMS implementation is not the size, scale or complexity our Guidewire customers face replacing core systems. But, even at a smaller scale, the implementation has been a valuable education.

  • Success depends upon strong partnership between business and IT. There is just no way IT can run a project without involvement from the business, and the business needs strong project management partners and the technical subject matter expertise from IT. It’s just that simple.
  • If you don’t have the resources to dedicate to the project, don’t do it. It’s hard to find the time to focus on software implementation when there is a business to run. But if there isn’t someone on the business side getting up every day to advance the project, the project is at risk. Asking someone from the business to manage a software project as a part-time job is the myth of multitasking in action. Projects by their nature need focused attention.
  • Process matters. I can hear the words of Alex Naddaff, senior vice president, programs, at Guidewire (who led our professional services organization for the first decade of our company’s history), ringing in my ear: “Project success depended on small teams, empowered to make decisions, who can do so quickly.” He’s right. Without an agile process that promotes consistent communication and team transparency, the project will find rough going.

These aren’t new lessons. These are the same lessons we bring to the table every time we engage with Guidewire prospects and customers. We preach that success depends on:

  • Strong business and IT partnerships;
  • Focused dedication of small teams; and
  • Transparent processes.

The lesson for me is just how hard it is to stay true to these principles. It requires trade-offs, budget allocation and the prioritization of team members’ time. It means accepting that some things won’t get done.

I will share the good news: Because we are following these fundamentals, our project is green, and we are closing in on our deployment date. I’ve got nothing but thanks and praise for the team leading the charge (Sarah from IT and Wendy from enablement, you both rock). We’re not there yet – there are more weeks and months of tough decisions and trade-offs ahead. But we’re close, the goal line is in sight and the realization of benefits is just around the corner.

Even more than the deployment, the biggest win for me is that next time I get the chance to talk to customers and prospects about the perils of software implementation, I can engage with this first-hand experience and empathy for the process. I can say with complete sincerity that the work sucks, but that it’s worth it.

 

Is It Time for Un-Change Management?

Pull back on the reins for a moment and come to a complete stop. What do you see behind you? Probably a wake of both straight and winding roads… some intact, some obliterated, most somewhere in between. You probably see customers satisfied and dissatisfied at a number of different levels. Same with employees.

Now look ahead of you. What do you see? A yet-to-be-unfolded strategic plan? A vision? Goals? Innovation?

“Change management” is used to make the transition to doing things a new or different way. It’s a tool used to implement change required for forward movement, innovation, strategies, etc.

“Un-change management” refers to the need for organizations to let go of the unwavering focus on innovation and advancement and share some of the time and energy removing that which is not valued by the external customer or not required by law. In a word, we’ll refer to it simply as “waste.”

Waste unattended grows, at best, in parallel with your company’s growth. If you are pleased with your growth goals, ask yourself if you’re pleased with your simplicity goals. The ratio of waste to value should be reduced when you grow. Unbridled growth often leads to an increase in the waste-to-value ratio, and that isn’t realized until years later, mostly because all eyes are on growth. Companies then scramble, point fingers, place blame and cut costs without really understanding were the problem could have and should have been addressed in the first place.

Continuous improvement is more about elimination of waste than it is about doing anything new. It requires serious focus on work and asking why things are done. The goal is to arrive as close as possible to creating perfect flow in your business systems — where orders are placed, where product or service is made or conducted and where they are provided to the customer for consumption.

Clean out the garage (and keep it clean)

For companies that have never emphasized waste, large gains are made in a relatively short period after they introduce their system of elimination. After that, removal efforts continue to whittle away at midsized waste and so on until, finally, the mindset converts to innovation. I think we’d all agree that an innovative company with little waste is a valuable thing indeed.

The way companies manage waste has a profound impact on the way the company culture emerges. (See www.ThreeBellCurves.com and download the free whitepaper.) Employees want to work on things that matter, not waste. Customers want to pay for things of value. Keeping the price low requires the elimination of as much waste as possible.

Is your company ready to share some of its change management with “un”-change management? If you are, you will create more room for value without escalating costs.

10 Building Blocks for Risk Leaders (Part 5)

Important things in life are not easily reduced to 10 steps. Nevertheless, this series provides a list of 10 building blocks to achieving long-term success in risk management from someone who has spent more than 25 years striving to carve out the most satisfying career possible, while never losing sight of the attributes attached to the bigger picture. Part 1 is here, Part 2 here, Part 3 here and Part 4 here. This is the fifth and final part.

9. Advance the Profession by Finding or Creating Personal Vision

The concept of innovation is directly and explicitly tied to risk and risk management. Put simply, there is no innovation without risk. Part of this paradigm is taking personal risk to move the discipline forward to places others may not have imagined. In the realm of risk management, settling for the status quo is to be avoided at all costs . Nothing stays the same for long, and a core competency of a true risk leader is having the gumption to push back on owners, which sometimes means questioning authority.

Just as the overall business environment is ever-evolving, the myriad internal and external drivers that can affect the risk profile of organizations must be carefully monitored. It is in this monitoring where the willingness to challenge conventional thinking and the status quo can lead to change, and risk-taking behaviors can be shifted to be more in line with risk appetite and tolerances. A vision for more innovative processes, tools and techniques can be developed, as well as an enhanced view into the murk of risk itself. Importantly, this demonstration of risk leadership will lead to the evolution of risk leaders’ personal vision for more effective risk management for their organizations.

If we haven’t learned anything else since that fateful day on Sept. 11, 2001, we’ve learned that new risks emerge with increasing regularity and seem to have increasing relevance to enterprise success. Furthermore, these new and emerging risks often fall into the strategic category, so they are often not easily measured or mitigated. All this speaks to the need for continuous improvement and innovation in how risk management is practiced and how it affects the design and execution of the organization’s risk framework and model. While personal vision for risk management is necessary — for personal satisfaction and the long-term success of the firm — no two frameworks or models are exactly alike, just as no two firm risk profiles are identical.

By crafting risk strategy, framework and model around the continuously evolving needs of the firm, risk leaders’ vision for risk management will take shape. As it is successfully implemented, this vision will also drive the risk profession forward, through benchmarking, networking and professional external collaborations, allowing all risk practitioners to improve, as well. This is the perfect segue to the last element of a personal risk leader success profile.

10. Give Back

Giving back to the next generation and to communities and nonprofit organizations (some of which can’t afford the cost of risk expertise, e.g., churches and civic organizations) is essential to developing a well-rounded leader and person. But giving back goes well beyond even service to the community and to nonprofits. In the larger context, giving back includes various strategies to help others. Examples include employing interns on a regular basis and taking the time to coach and mentor them well. Too often, intern programs are mismanaged or even abused as sources of raw labor out of which no real development or education occurs. This destroys the attraction to enter the risk profession. Because these programs—done well—can be the source of exceptional talent, it behooves all risk leaders to take advantage of intern sourcing when feasible and include it as a key component of long-term resource planning.

Giving back is also accomplished by bringing the risk leaders’ considerable knowledge to various forums, such as at conferences and industry meetings, through presentations and participation in efforts to discover new solutions to problems. While the primary goal should be to help others, it almost always includes mutual benefit. Many of my colleagues say they actually get more out of this effort than they put in. That has certainly been true for me.

Another example of giving back is the Spencer Educational Foundation’s Risk Manager in Residence Program. This program provides funding for risk experts to bring that expertise into higher educational institutions through a series of lectures and teaching done with the collaboration of selected professors whose goal is to bring diverse experiential learning to students pursuing risk and insurance degrees. This program has been instrumental in highlighting for students the opportunities available in the risk discipline.

There are many opportunities to serve other organizations through volunteer board and advisory positions, where risk experience and expertise is made available to help these organizations, particularly with risk governance. A residual benefit of this activity is broadening the network of contacts and relationships outside the industry, where a clear demand for risk expertise is almost always needed, but infrequently recognized or acted upon.

Last, but certainly not least, is the ever-present opportunity to mentor and coach others to help them achieve their career goals. This is a fundamental responsibility of every manager of people. But it really gains traction with others when those outside the immediate work circle ask for mentoring or coaching, as they recognize and value the deep and broad expertise they can learn via a mentoring program. Usually accompanying that is a keen understanding of the political, social and cultural aspects of work life that those with less experience often find challenging to navigate. One benefit of this activity is a deep and lasting gratitude that is too infrequent in day-to-day business interactions. The related personal satisfaction is often immeasurable and certainly lasting. Personal brands are enhanced, and those being mentored can close the loop on what a true risk leader profile looks like.

Conclusion

There you have it—my list of 10 building blocks for long-term success in risk management. All functions need great leaders to achieve high performance, and risk leaders have more than their share of hurdles to overcome in the process. And yet, those who stick their necks out and take the personal risk associated with doing extraordinary things often succeed in doing so. I urge you to think big about the possibilities of a career in risk and consider these 10 important things that can help define the correct path to take.

After all, no risk, no reward.

The Key to Building Effective Risk Culture

Building an effective risk culture is much more than changing your organizational culture in line with your vision, mission, corporate values and risk appetite — you must factor in the interests of competing national cultures, sub-cultures, Maslow’s theory on individual self-actualization and the informal groups in the company.

The interactions among all of these are not predictable, and variables cannot accurately be isolated.

An effective risk culture is not a matter of risk assessment or level of compliance; it is a matter of “conviction” — a corporate state of mind where human beings can take well-informed risk decisions because they want to, not because they have to.

ERM policies, systems and reporting dashboards are all part of the foundation for good risk management. Once you have all of these in place, you can start building an effective risk culture. Remember also that there is too much complexity and subjectivity in culture to assume that individual reactions and responses can be aggregated to reflect or give an accurate picture of the whole organization’s  risk culture. You cannot “pop” an effective risk culture in the microwave; it takes a lot of preparation, dedication and time to get it to perfection.

You can have the best staff retention rates in the industry or the most awards for long service — both of these can also indicate a high risk of employee fraud. According to ACFE research:  53% of fraudsters have more than five years of  service and the median loss for fraudsters with six to 10 years of service is $200 000. 52% of fraudsters are between 31 and 45 years old, and older fraudsters tend to cause larger losses.

Scanning the horizon might just be the most important thing to do. You cannot control or stop what is coming; you have to prepare to respond to it. So many organizations spend large amounts of money to focus and report only on what is happening inside the organization, where they actually have control. Your biggest risks are outside of the organization, where you have no control.

Key elements for the future of your risk strategy should include internal networking; you have to talk to the informal groups and their informal leaders just as much as you do talk to the executives and managers, maybe even more. The real business does not always get done in the formal “boxes and lines” structure.

Just as important are the aspects of desk research and external networking. To have a good risk management strategy and action plan, you have to know everything about your industry, markets, competitors, supply chain, alternative supply chain, global risks in a connected world and many more. Failure to adapt your business model to the ever-changing internal and external risk environments will lead straight to the corporate graveyard.

The future of risk management is just: “risk management through people.” You can have the best systems, great models and scenario analysis with elaborate dashboards; at the end of the day a person will take a decision.

Are your employees aiming at more than one target, or do you have a clearly defined risk for reward strategy and risk appetite statement to guide them? Business strategy and risk culture are parts of an interdependent system.

Start working on your success by training every employee with some basic risk management skills.

As my Moody’s colleague Sarah Tennyson wrote last year: “Enterprise-wide risk management requires a shift in the behavior and mindset of employees across an organization. To realize the full benefits of improved systems, tools and analytical skills, people need to learn new ways of perceiving situations, interpreting data, making decisions, influencing and negotiating.”

This was originally published at Zawya.

Call to Action for Thought Leaders

It’s the dawn of a new day.

If there was ever a business sector ripe for disruption in 2015, insurance and risk management is it. Vulnerabilities can become opportunities for those with vision and imagination. Insurance is a borderless enterprise that needs to transform to address a digital world. Customer loyalties are now drawn to the Amazons, Apples and Googles of the world – disrupter companies that not only modify or accelerate industries but redefine them.

The choice is clear: Become a disrupter or be disrupted.

From its beginnings in a London coffee house in 1688, Edward Lloyd pioneered an industry that has morphed into a multitrillion-dollar worldwide industry that is a complicated security hedge against the risk of contingent, uncertain losses. A simple signed slip of paper agreeing to loss and indemnity terms has turned into a highly complex mélange of legal definitions, terms and conditions, exclusions, endorsements, amendments, etc. Have we made progress?

The languid pace of change in insurance has not kept up with social media and other industries. Regulatory compliance and cultural habits are challenges that inhibit transformation, and disruptive effects of technology are affecting all areas of the insurance delivery chain, from distribution to underwriting to claims. And consumer frustrations coupled with inefficiencies and distrust kills consumer confidence. If current insurance leaders fail to embrace innovation, new entrants to the insurance market will redefine customer experience through on-line market accessibility and simplicity. In addition, burgeoning consumer data and predictive analytics will drive competitiveness.

In the future, we envision insurers collecting data from mobile devices and wearables that will feed into a dynamic ecosystem that will develop and refine value-added data metrics about consumer behavior, health needs and other risk factors. With large-scale cognitive computing, artificial intelligence can be used to convey insights into new ways to solve issues and accomplish objectives we’ve failed to achieve. There will be many potential avenues for monetization to those who know the most about consumer lifestyle.

Thought leadership is the visionary authority that delivers pertinent answers to the biggest questions and concerns on the minds of insurance practitioners and consumers. ITL’s 360-plus diverse thought leaders serve to build the framework for our profession’s future. ITL, in turn, serves our thought leaders and subscribers by providing an accessible, independent, intellectual digital publishing platform that serves as a launch pad for new ideas and concepts. In 2015, ITL will be achieving new milestones through expanded topics, unique online training opportunities, conversation, business conclaves and conferences.

I have the privilege of serving as ITL’s chief imagination officer. Think outside the box. Imagine what things could change or be revolutionized in 2015 and beyond. Be a part of the future and join our journey. Be part of the conversation. I want to hear your thoughts.

“Think left and think right and think low and think high. Oh, the thinks you can think up if only you try!” — Dr. Seuss