Strategic Leadership Imperatives

1. Leading A Professional Service
Organization
Strategic Leadership Imperatives
in the Insurance Industry.
.Richard O. Ikiebe.

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. 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. 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. 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. Warren Bennis’s Four Critical
Aspects 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. 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. Superman–Leader Syndrome

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. 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. 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. The Insurance Sector.

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. 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. Key Leadership/Management
Challenges
The 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

16. The Leadership Challenge
Lack 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

17. The Leadership Challenge
Marketing –
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 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

18. The Leadership Challenge
Vanishing 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. Dickinson 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

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. Effective Strategies for
Leading
THE SITUATIONAL
LEADER

22. Dispersed Leadership
In 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 direction
Leadership is a lifelong development process
Leaders must hold itself accountable

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. 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. 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. 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. 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 Performer
Some People Just Need A Little Help Along The
Way”

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. 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. 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. 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. 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. 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. 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. 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. 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. 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