There are as many different leadership styles as there are leaders. This article will make no attempt to provide a comprehensive overview of leadership. Instead, I will share some of the leadership principles that have guided me throughout my career, which includes 15 years as the CEO of a mid-size regional life insurance company. My thoughts about leadership are deeply rooted in my experiences preceding, during and subsequent to my time as CEO.
Not all actuaries will be CEOs, but many will have CEO-type leadership responsibilities as they lead groups and teams within their organizations. Throughout my career, I have been passionate about and have found great satisfaction in building people and organizations, and helping them to succeed.
Role of the CEO
What does a CEO or a leader do? Not long after I became CEO, we held an executive leadership team retreat. One of our senior board members kicked off the event. He shared four important CEO responsibilities that have guided me for much of my career:
- Set the strategy. As the leader, you have the duty to clearly set the strategy, including a compelling vision for the future. I quickly learned that I did not and was not expected to have all the answers. My role was to have a disciplined process to get the right people in the room, identify the critical issues to be resolved, set a vision for the future and create a strategy to move from the current to future state.
- Staff the strategy. An organization is only as good as its people. Once the strategy is set, you need to assemble the team with the commitment, passion and skills to see the strategy is implemented successfully.
- Execute the strategy. With the strategy set and the team engaged, clear implementation plans need to be designed and meticulously implemented. There must be clear and frequent accountability. This is both tedious and critical. A less-than-perfect strategy brilliantly implemented will succeed most of the time. A brilliant strategy poorly implemented will fail most of the time.
- Report results. Finally, the leader has the duty to report the company’s results to the board of directors and the shareholders. The leader is responsible and accountable to deliver on the agreed-upon objectives.
Even though this is described as a four-step process, there are always iterations within the steps and between the steps as a leader works to build a successful organization.
Great leaders instill a cause or purpose in the organization that is about much more than making money. A noble non-monetary cause inspires and motivates all of the company’s stakeholders—employees, producers, policyholders and shareholders. Sure, they understand that the company’s economic engine needs to be viable, deliver value to the customer and provide a return to the shareholder, yet employees and producers must be passionate about a cause that goes well beyond the economic engine.
When I was CEO at the life insurance company, we were passionate about really helping people financially realize their hopes and dreams, and being there when they needed us most. We wanted to be the financial engine that allowed their dreams to be met. We wanted to support them in their hardest moments. We wanted to bring dignity and financial self-reliance just when it otherwise might be taken away. That is what got us excited about coming to work every day.
A leader has the responsibility to clearly communicate the organization’s cause or mission, the vision for the future, and the organization’s core values or principles. A leader fully engages the organization in these guiding principles.
Within the first three months of new employees starting work at our company, I would meet in a group session with them to personally teach them about our corporate mission, vision, values and strategy. I wanted them to clearly understand our guiding principles. I then would charge these new employees with the responsibility to see that we stayed the course and remained true to those guiding principles. They were to report and help correct any deviation from the course.
The People and the Culture
After clearly communicating the corporate cause, a leader creates a culture that fully engages everyone’s thoughts, ideas and energy for the good of the cause.
We aimed to create an environment where people could openly and freely express their opinions and ideas, with a high likelihood that any excellent ideas aligned with the cause would rise to the top and be implemented. About once a month, I tried to have lunch with a cross-section of company employees. My goal was to meet in such a setting with every employee once a year. One of my favorite questions was, “What is the first change you would make if you were CEO?” The employees had insightful ideas, and a lot of great initiatives were generated in those lunches. We worked hard to see that the best ideas were implemented rapidly, allowing the employees to realize their ideas and engagement made a difference. As we implemented employee ideas aligned with the cause—and empowered them to implement additional ideas—we energized the company’s transformation at all levels.
Great leaders grow both great organizations and great people. Not only did we want the company to grow, it was critical that the employees also grow. It was crucial that our team members had opportunities to learn new skills, learn how to better solve problems and advance in the company. By growing the company, we created more employee opportunities.
Great leaders develop cultures that are open and honest. We used a 360-degree performance appraisal to help in this process. Both the board and all of my direct reports evaluated my performance. In order to remain objective, I would always complete my evaluations of my direct reports prior to reviewing their evaluations of me. Some of the best feedback I received was from my direct reports. My goal was to create an environment where I was approachable and people could be brutally honest with me. I believed that such an open and honest culture allowed the company to rise to its full potential.
Part of this open and honest culture included creating an environment where people could have different opinions and comfortably challenge any aspect of the organization in the spirit of making the company better. I knew I did not have all the answers and valued the opinions and insights of others, including those who disagreed with me. I welcomed vigorous debate—as long as it was focused on making the company better and not some personal egotistical need to win a point or achieve a personal agenda. Properly done, team members could have these debates and retain or, at times, increase the respect they had for each other, all while building and strengthening the company.
Not only did we have the traditional mission, vision and values statements, but we also created a people statement that specifically defined the type of person we wanted to have working for the company and what we expected of him or her. The people statement was a powerful recruiting tool. It increased the attraction for those who fit well with our company and allowed those who didn’t fit to remove themselves from consideration.
The Alignment and Accountability
It is critical that an organization be aligned with its cause and committed to delivering sustainable results. All parts of the organization need to be aligned and held accountable. In our case, our primary cause was much more than making money, yet we needed to provide the shareholders a fair return for the risks associated with ownership.
A leader is not only focused on results, but also on how results are achieved. In our values statement, we said, “How we achieve results is as important as the results themselves.” We worked to make certain we always acted with the highest level of integrity. In fact, we often said that how we achieved results is more important than the results—and the results are really important.
We used companywide performance scorecards to align the company’s cause and shareholder expectations. For every employee in the company, we worked to identify the two or three things he or she did that were most important in helping the company achieve its strategic vision for the future. We then established a set of performance metrics around those activities. Each month, employees could see the company’s results and how they personally contributed to the success of the company. Each employee knew what was expected of him or her. One of our executives often said, “Disappointment is the sum of unmet expectations.” By making certain expectations were clearly understood, we reduced the risk of disappointment.
It is important to celebrate successes. Great leaders make it enjoyable and rewarding as the people and organization grow. Take time to celebrate major milestones—such celebrations will energize the team and reinvigorate them in their journey to the next milestone.
In those moments when we had the company firing on all cylinders, we had:
- Employees who were passionate about the company, loved their jobs and understood what was expected of them. They were growing, progressing and helping the company meet its objectives.
- Policyholders and distributors who received exceptional products and services, and had the peace of mind that their contractual obligations would be met.
Rarely did we achieve perfection in all the areas discussed in this article. In reality, most of the time you are succeeding in some areas and working hard to make corrections in others. Great leaders have a relentless drive for change and improvement, while religiously preserving the organization’s core values.
Built to Last and Good to Great are two leadership books that have been immensely helpful to me over my career. These books study organizations that have achieved extraordinary results over an extended period of time. They identify common qualities and attributes across these many successful companies that have allowed them to prosper. Many of their findings were consistent with my real-life experiences. I have applied many of the business principles identified in these books throughout my career.
There is no perfect leadership handbook. Reading and learning from others’ successes and failures can accelerate the leadership learning process, yet there is nothing that teaches and accelerates the process like personal experience.