This newsletter article discusses how leadership inaction has become a problem in many organizations. It provides examples of leadership inaction such as unaddressed personnel problems, ignored product lines, and antiquated systems. The article argues that leadership effectiveness has deteriorated, costing the industry profits every day. It calls for leaders to identify areas of inaction within their organizations in order to take action that enables growth and profitability.

1. Second Quarter 2007 Volume 34, Number 2

2. The Nolan Newsletter
People, Process, Technology
Table of Contents
Making Sense of Shifting Priorities..............................................2
Lgt C m r A t n R tikn
i s a e , co – e n i
h, a i h g
Business Requirements.....................................................................3
K y t G o t i Tdy SfMa e..........
eso rw h n oa’ ot r t.........6
s k ..........
..........
Imitation is the Sincerest Form of Flattery, Even in
B n i – uD e IL a tS ces..........9
akn B t ost edo ucs ...........
g ?..........
..........
2007 Efciency Ratio Performance Benchmarking Study......11
Retiring Losses................................................................................12
Client Spotlight: Managing Cost of Care Improves
Insured Result and Business Protability..................................14
Spring Cleaning...It Helps to Prepare!....................................16
How Many Piano Tuners Are There in Chicago?...................17
A Call to Action................................................................................20
D nt ogth “ep ”n ep , rcs ad
o’F ret Pol i Pol Poes n
e e e ,
Technology.............................................................................22
Quality Healthcare: What Is It and How Do We Know?..........24
Information Technology: Enabler or Obstacle?........................27
Nolan Events.....................................................................................28
Vol. 34 No. 2 Second Quarter 2007

3. Steve M. Callahan, CLU, ChFC, FLMI/M
Senior Consultant
steve_callahan@renolan.com
Recently, while browsing through some old executive
training materials from a Fortune 100 company, I came
across courses that had been used to train management on
techniques of effective leadership. As I reflected on the
applicability of the various techniques, my eyes wandered
casually over to the packaging or, more specifically, its name:
Leadership in Action. What a great phrase to express actionable
lessons for succeeding as a leader.
Being a little bored at the time (it was the weekend) and faced
with an overactive imagination fresh from some implementation
challenges, I mentally morphed the well-designed name into a
representation of what, at least to me, seemed to be a growing issue
i t a’ogn aosIw s s p t nio—sy tatt e
n o y rai t n.t a a i l r si
d s zi m e a t n a if ,a s k
out one space, and there you go: Leadership Inaction.
After the chuckle brought on by the wordplay, the reality of how
more organizations have found a way to neutralize the effectiveness
of their leaders sunk in. Whether in the arena of corporate ethics,
strategy setting, or even at the operational level of individual and
t m m ngm n nm ru ea p so “ ae h i co”
ea aae et u e s xm l f l dr i n t n
, o e e sp ai
came to mind, many of them attributable not to mistakes of action
but failures to act, such as:
• Unaddressed and long-standing personnel problems that
suck the motivation out of other employees
• Dormant or dying product lines ignored despite their drain
on resources
• Arduous project approval processes that act as constraining
lters instead of enablers
• Rapidly growing staff functions that count, price, design,
consult,  or audit business lines that are unable to cut
le,
operational expenses enough to cover the more expensive
staff roles
• De-layered organizations with an overabundance of
management meetings, leaving front-line staff effectively
on their own
20

4. • Antiquated transactional systems left in place while the
appeal of custom-developed web portal, e-commerce, and
self-service solutions are pursued
These are only a few examples that came to mind as I contemplated
the debilitating conditions that many businesses inadvertently
internalize today. How many do you recognize?
One of the many challenges we face as leaders is to identify this
cultural leadership inaction that contaminates our effectiveness, and
then to take action to eradicate all traces of it. Consider supply and
demand curves from economics, where equilibrium is achieved by
sliding along the curves until they cross, until a significant economic
event causes an entire curve to shift position. Similarly, leadership
has reached a sub-optimal point in its effectiveness, requiring a shift
to the next level in order to enable continued growth and profitability.
Make no mistake: the deterioration in leadership effectiveness is
costing our industry every day.
T dy l dr a m r i om d cm e n m t a d ad
oa’ e e r oe n r e, o pt t o vt , n
s a s e f e, i e
technologically supported than any preceding generation, making
this needed transition neither an issue of ability nor incentive. What is
needed are wake-up calls, yanking the covers off these organizational
encumbrances, putting them under the blinding light of day so that
action can take the place of inaction and strategic intent replace
habit.
Finding these covers can be as simple as taking a fresh, unbiased
look at exactly where your profits are coming from, what the
underlying value propositions are, and how opportunity costs are
being allocated. Once the encumbrances are identified, the process of
cr co ir avl es—ee fn R sasr , o wlhv
or t n se t e ay vn u. ets e yu i ae
ei li y ud l
the minds and hearts of your front-line staff supporting the removal
of these burdens, enabling your company to re-engage in focused and
profitable endeavors.
Wi t t m n,n wta a i i ndo T e e m ri
t h i i ad i n fr n o t“ h R - e n
h an d h fm g E gg
Need for Speed” i usdn u fsqa enw lt o 20, t
d cs iorit ur r e s tr f 07l
s e r- t ee e
m c s wta utf mS aepa :B trhe huso so
e l e i qo r hkser “ eet e ort on
o h eo e t r o
t n m ntt le
h a i eo a .
a u o t”
21