Leading a professional service organization
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Leading A Professional Leading A Professional Service OrganizationService Organization
Strategic Leadership Imperatives
in the Insurance Industry..Richard O. Ikiebe.
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IntroductionIntroduction
Leadership has been around for thousands of years
Yet we still are unable to contain it in a single definition we can all agree on
Leadership is a complex concept which is continuously evolving
The concept of leadership has many applications and implications
The result usually depends on the culture and context in which it is being applied
In recent years, much has been written on Leadership
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Evolution of Leadership Evolution of Leadership StylesStyles
Leadership thought has evolved over time from many identifiable styles
Style on its own has applications to different contexts:◦in business, medical, non-profit or charity,◦ education, religious or spiritual groups
and ◦even at the family level
It is not surprising that most people define leadership, from their perspective◦ the version that makes the most sense to them
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Leadership Theories and Leadership Theories and StylesStylesA review of leadership literature reveals
an evolving string of theories, from:◦“Great Man” and “Trait” theories to◦“Situational” and “Transformational”
leadership. Early thought focused upon the
characteristics and behaviors of successful leaders
Later thinking begin to consider the role of followers and the contexts of leadership.
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Leadership Stock in Short Leadership Stock in Short SupplySupplyLeadership has generated so much interest for
one reason: it is in critical short supplyMcKinsey & Co. in 2000, surveyed about 7,000
executives. Only 7% could strongly agree that: “Our Company has enough talented managers to pursue all or most of its promising opportunities”
Tom Peters said: “We’re going to see leadership emerge as the most important element of business- the attribute that is highest in demand and shortest in supply”
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Warren Bennis’s Four Critical Warren Bennis’s Four Critical Aspects of LeadershipAspects of LeadershipAdaptive capacity: A sense of resilience,
hardiness, and creativity. The means by which you seize opportunities
Engage followers: the capacity to engage followers in shared meaning – to align the (work force) around a common, meaningful goal
Moral compass: Leaders will have to rely on a moral compass in order to lead effectively – a set of principles, a belief system, a set of convictions
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Warren BennisWarren Bennis
Self-mastery: Leader must spend quality time in a continual process of finding out about who they really are
They must learn their own voice, how they affect other people, & learning about emotional intelligence
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Superman–Leader Syndrome
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Problem with the Super Problem with the Super LeaderLeader
In addition to the “soft” skills, the leader is also expected to:◦ display excellent information processing ,walk
the talk, ◦ project management, customer service
delivery skills, ◦ build partnerships, proven business political
acumen, ◦ show incredible drive and enthusiasm, ◦ have a can do attitude, demonstrates
innovation, ◦ creativity and thinks “outside the box”.
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The Superman LeaderThe Superman Leader◦ They must be entrepreneurs who identify
opportunities◦ they like to be challenged and ◦ they’re prepared to take risks◦ they are people of high moral values –
honesty, integrity, empathy, trust, ethics and valuing diversity.
◦ The leader is expected to show a true concern for people that is drawn from a deep level of self-awareness and personal reflection
It is difficult to find this multi-talented individual with a wider range of attributes
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Re-Thinking LeadershipRe-Thinking LeadershipMost leadership thoughts take bearing
mostly from one individual’s success story a rather than from a more holistic perspective
A school of thought gaining increasing recognition is that of “dispersed” leadership
It views leadership as a process that is diffuse throughout an organisation rather than lying solely with the formally designated ‘leader’
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The Insurance Sector.
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Complicated SectorComplicated SectorFormer CEO of Groupama, Pierre
Lefevre once said, “People do not understand the insurance product”
He also said: “Many companies do not value experience and knowledge”
Regulators are confessing: ‘We have found that insurance is a hell of a lot more complicated than banking’
(Leading EU regulator, 2004)It is always more complicated than we
thought!’ (Andrew Moss, CFO, Aviva)
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More Complex Than Outsiders More Complex Than Outsiders BelieveBelieve‘Insurance should be simple – you pay
a premium to cover a risk or you put aside some money for the future. From the point of view of the consumer, nothing could be easier. This apparent simplicity, however, masks a highly complex industry, driven by a wide range of different issues.’
(KPMG 2007)
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Key Leadership/Management Key Leadership/Management ChallengesChallengesThe Very Insurance Business is
Different. “A long term risk business” Quick quantum loss possible overnight
after long gestation Law of large numbers good on paper,
and if you can bring in the premiums. You can’t know which policy will bring
down the house roof Changing World The world is riskier, people are more
risk averse Economy uncertain, & IT is complex,
poor and shifting regulatory quick sand
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The Leadership ChallengeThe Leadership ChallengeLack of Understanding.Offers intangible and suspicious
business proposition.The average customer an unwilling
purchaser Complex pricing and claim issues The Sins of the Haunting Past. Insurance is scam. Fraud stories
abundant Ethical (Integrity & trust) are a
collective industry problem.Too hot for any one leader to deal with.
Yet it affects each leader differently and separately
The Unsteady Cycle. Up today, down tomorrow. False highs. Real lows! Forced to count the chicks too early
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The Leadership ChallengeThe Leadership ChallengeMarketing – Limited product lines, mostly generic. Hard
to differentiate yourselfMarket power in the hands of branded
intermediaries. Agents. Banks. Affinity groups.
When it’s good they get the credit. When it’s bad, you carry the short end of the stick
Regulation and Government How do you deal with an activist regulator?
Comparing chickens with duck – banks and insurance companies
Poor understanding of the real world of underwriting risks not text book knowledge
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The Leadership ChallengeThe Leadership ChallengeVanishing Intellectual Capital. Poor strategists. Deadwoods manning
posts. Known bad eggs still in business. Will you hire a competent bad egg? Management fraud. No investment in continuous training. Failure to retain experience staff.
Growth Pressures – to be like others Intimidating pressures make leaders
think they are smarter than they really are and they do insane things
Underwriters take risks beyond acceptable limits
Staff write risks with bad finger prints all over it
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Dickinson A. WalkerDickinson A. Walker
In August 2008, Walker observed that: The industry is taking on more uncertainty
◦ the world is riskier◦ more concentration of value◦ more complexity◦ compensation culture
Most failures involve management failure ◦ poor strategy ◦ lack of integrity◦ short-termism
The industry is taking on more uncertainty◦ the world is riskier◦ more concentration of value◦ more complexity◦ compensation culture
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Central issues Central issues The central issues in insurance
today are: leadership, strategy and knowledge◦Consumers of insurance products,
regulators, the media and even insurance professionals suffer from knowledge gap
The gap in leadership knowledge is more profound because with the right leadership, the other two will seize to exist
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THE SITUATIONAL THE SITUATIONAL LEADERLEADER
Effective Strategies for Leading
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Dispersed LeadershipDispersed LeadershipIn today's complex insurance sector
leadership must be dispersed at all levels of the organization
Engage in shared leadership beyond empowerment and delegation
Share knowledge. Renew and regenerate values and beliefs
Release individual potentials for the benefit of all
Motivate and give strategic directionLeadership is a lifelong development
processLeaders must hold itself accountable
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The Situational SchoolThe Situational School
Earlier theories on leadership give little guidance as to what constitutes effective leadership in different situations.
Researchers have found that no one leadership style is right for every manager under all circumstances
New thinking indicate that style is contingent upon such factors as:◦the situation, the people, the task,
the organization, and other variables.
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The Hersey-Blanchard Model The Hersey-Blanchard Model
Blanchard and Hersey insist that the developmental levels of subordinates play the greatest role in determining which leadership styles are most appropriate
A leader must provide direction, or social or emotional support in a given the situation, and depending on the "level of maturity" of the follower
This way the entire system is supported vertically as well as horizontally
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The Situational LeaderThe Situational Leader
“Situational Leadership is not something you do to People
But something you do with people…applying different strokes for
different folks”
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Four-Style LeadershipFour-Style LeadershipFor Blanchard one of the key variables,
in determining the appropriate leadership style, is the readiness of the subordinate(s)
This model proposes four leadership styles: Directing, Coaching, Supporting &Delegating
One leader can apply all these to different individuals at the same time“When the best Leader’s work is done, the people will say: we did it ourselves.”
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DirectingDirecting
The Leader provides specific direction and closely monitors task accomplishment
This style is best matched with a low follower readiness level
“Everyone Is A Potential High Performer
Some People Just Need A Little Help Along The Way”
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CoachingCoaching
The leader continues to direct and closely monitor task accomplishment
He explains decisions, solicits suggestions, and supports progress
He encourages two-way communication and helps build confidence. He motivates.
He retains responsibility for, and controls decision making.
Coaching style is best matched with a moderate follower readiness level.
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SupportingSupportingThe leader facilitates and supports
subordinate’s efforts toward task accomplishment
He shares responsibility for decision-making with them. The relationship is not directive or coaching
Participating style is best matched with a moderate follower readiness level
“Everyone has peak performance potential –You just need to know where they are
coming from and meet them there”
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DelegatingDelegating
The leader turns over responsibility for decision-making and problem-solving to follower
Both are competent and motivated to take responsibility.
Appropriate for leaders whose followers are matured and ready to accomplish a particular task.
The leader determines the appropriate leadership style to use in a given situation.
He must first determine the competency level of the followers in relation to the specific task.
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Competency FrameworkCompetency Framework
Organisations now go to great effort and expense to develop their own leadership framework
There is no more a “one size that fits all”
The leadership competency framework is an integral element of the leadership development process
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Competency FrameworkCompetency FrameworkIt is hands-on company-wide leadership
programme – used to define content and mechanism of delivery
It helps mentors and individuals measure and explore level of development
It forms the basis of the 360-degree feedback process◦ to monitor their progress, ◦ identify personal learning and development
needs, and◦ underlies assessment and appraisals.
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The Nokia ApproachThe Nokia ApproachFluid organizational architecture Leadership operated as a team; open and
approachable.They set an example of teamwork
throughout the organization. Value-based leadership rather than control
through rigorous processes was the modelProject teams form and dissolve easily.
Provided people opportunity to work and build intra-firm networks
The firm promoted values of customer satisfaction & respect for the individual
Achievement, and continuous learning were acted upon consistently.”
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US Marine CorpsUS Marine Corps
US Marine makes leadership development at all levels a priority.
Personal leadership by all Marines is an ethic that is constantly on the agenda.
It is reflected:◦in continual training, ◦in the culture of daily life, ◦celebrating what the Corps values most: honour,
initiative, and accomplishment by the team.
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The Approach of The Approach of AstraZenecaAstraZeneca
The AstraZeneca leadership provide a link between its business priorities and values: ◦respect for the individual and for diversity
◦openness, honest, trust and support for each other
◦integrity and high ethical standards; and
◦leadership by example at all levels
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The Approach of AZThe Approach of AZAZ has seven key capabilities:
◦Provides clarity about strategic direction
◦Develops people ◦Demonstrates personal conviction ◦Builds self-awareness ◦Builds relationships ◦Ensures commitment ◦Focuses on delivery
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The Approach of ShellThe Approach of ShellShell’s Leadership Framework has nine
key elements: ◦ Build Shared Vision ◦ Motivate, Coach & Develop next level
leaders ◦ Champion Customer Focus ◦ Maximise Business Opportunities ◦ Demonstrate Professional Mastery ◦ Display Personal Effectiveness ◦ Demonstrate Courage ◦ Values Differences ◦ Deliver Results