Leading a professional service organization


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Strategic Leadership Imperatives

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Leading a professional service organization

  1. 1. Leading A Professional Service Organization Strategic Leadership Imperatives in the Insurance Industry. .Richard O. Ikiebe.
  2. 2. Introduction 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
  3. 3. Evolution of Leadership Styles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
  4. 4. Leadership Theories and StylesA 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.
  5. 5. Leadership Stock in Short SupplyLeadership has generated so much interest for one reason: it is in critical short supplyMcKinsey & 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”
  6. 6. Warren Bennis’s Four CriticalAspects of LeadershipAdaptive 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
  7. 7. Warren 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
  8. 8. Superman–Leader Syndrome
  9. 9. Problem with the Super LeaderInaddition 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”.
  10. 10. The 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Itis difficult to find this multi-talented individual with a wider range of attributes
  11. 11. Re-Thinking LeadershipMost 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’
  12. 12. The Insurance Sector.
  13. 13. Complicated SectorFormer 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)
  14. 14. More Complex Than Outsiders Believe‘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)
  15. 15. Key Leadership/ManagementChallengesThe 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 roofChanging WorldThe world is riskier, people are more risk averseEconomy uncertain, & IT is complex, poor and shifting regulatory quick sand
  16. 16. The Leadership ChallengeLack of Understanding.Offers intangible and suspicious business proposition.The average customer an unwilling purchaserComplex pricing and claim issuesThe 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 separatelyThe Unsteady Cycle. Up today, down tomorrow. False highs. Real lows! Forced to count the chicks too early
  17. 17. The Leadership ChallengeMarketing –Limited product lines, mostly generic. Hard to differentiate yourselfMarket 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 stickRegulation 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
  18. 18. The 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
  19. 19. Dickinson A. WalkerIn August 2008, Walker observed that: The industry is taking on more uncertainty ◦ the world is riskier ◦ more concentration of value ◦ more complexity ◦ compensation cultureMost failures involve management failure ◦ poor strategy ◦ lack of integrity ◦ short-termismThe industry is taking on more uncertainty ◦ the world is riskier ◦ more concentration of value ◦ more complexity ◦ compensation culture
  20. 20. 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
  21. 21. Effective Strategies for LeadingTHE SITUATIONAL LEADER
  22. 22. Dispersed Leadership In todays 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 direction Leadership is a lifelong development process Leaders must hold itself accountable
  23. 23. The 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.
  24. 24. 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
  25. 25. The Situational Leader “Situational Leadership is not something you do to People But something you do with people…applying different strokes for different folks”
  26. 26. Four-Style LeadershipFor 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.”
  27. 27. Directing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 PerformerSome People Just Need A Little Help Along The Way”
  28. 28. Coaching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.
  29. 29. SupportingThe 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”
  30. 30. Delegating 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.
  31. 31. Competency 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
  32. 32. Competency FrameworkIt 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.
  33. 33. The Nokia Approach Fluid 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 model Project 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.”
  34. 34. US 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.
  35. 35. The Approach of AstraZeneca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
  36. 36. The Approach of AZAZ has seven key capabilities: ◦ Provides clarity about strategic direction ◦ Develops people ◦ Demonstrates personal conviction ◦ Builds self-awareness ◦ Builds relationships ◦ Ensures commitment ◦ Focuses on delivery
  37. 37. The Approach of ShellShell’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