tag:blogger.com,1999:blog-42059430243948334412024-03-12T21:34:03.424-04:00Claims MattersCommentary on business, leadership and management topics and best practices.claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.comBlogger44125tag:blogger.com,1999:blog-4205943024394833441.post-81801880867080010222021-03-29T13:47:00.026-04:002022-02-07T12:26:09.342-05:00Expectations, Unfulfilled<div class="separator" style="clear: both; text-align: left;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXtJVaFpR4mlaoj5LUy0My1u_wEzSGsYR1Pvt8QPNSmfbdp1XpMQWd-eeIdQVMBVMEw4ogOub7aBad6vkuXaDhPHwrOuFqwkRTXlpWZaZIUxzH7eenmzRQ6k-R4NQI1d7MczkTvilj3eA/s1280/pexels-andrea-piacquadio-3755755.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="853" data-original-width="1280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXtJVaFpR4mlaoj5LUy0My1u_wEzSGsYR1Pvt8QPNSmfbdp1XpMQWd-eeIdQVMBVMEw4ogOub7aBad6vkuXaDhPHwrOuFqwkRTXlpWZaZIUxzH7eenmzRQ6k-R4NQI1d7MczkTvilj3eA/s320/pexels-andrea-piacquadio-3755755.jpg" width="320" /></a></div><i><div style="text-align: left;"><i><span style="font-size: x-small;"> Photo by Andrea Piacquadio from Pexels</span></i></div></i><p>Years ago, my friend Mary made a career move from the IT department of a large corporation to the IT department of a county school system. She quickly realized her new employer was not current on IT best practices and procedures and that IT cost, performance, and quality targets were routinely missed. She raised her concerns and prepared an improvement action plan, but no one within IT was interested. They knew they had problems, but they’d had them for years and since they weren’t being held accountable by the superintendent of schools, or by their stakeholders, they felt no pressure to change anything.</p><p>Many of us have been in situations like that. We recognized a need for change, and argued for change, only to learn that our version of change just wasn’t going to happen. Too difficult, or disruptive, or expensive, or the time wasn’t right, or the business case was weak, or decision-makers just didn’t believe it was necessary. </p><p>Mary was disappointed, so she considered her options: </p><p></p><ul style="text-align: left;"><li>Complain about her new employer’s blind spot (whiner)</li><li>Keep arguing for change (crusader)</li><li>Accept the situation (sellout)</li><li>Go work somewhere else (quitter)</li></ul><p></p><p>None of those options were appealing, yet according to Eckhart Tolle, there are only three “sane” choices in such a situation:</p><p></p><blockquote>“Leave the situation, change the situation or accept it. All else is madness.“</blockquote><p></p><p>Mary eventually moved on, but when she read a news report years later about a critical independent performance audit done on her former employer at the request of the school board, she was curious enough to get a copy. Many of the conclusions and recommendations for the IT department tracked the action plan she had prepared years prior, right down to details on strategy, organization design, staffing, service level agreements, and operational performance measures. </p><p>Since humans delight in being right (it’s like a drug that feeds our ego and fortifies our sense of self-worth) I wondered how Mary reacted to the audit findings. Did she feel vindicated?</p><p></p><blockquote>“A little bit, particularly when I talked about it with some of my former colleagues, but that feeling was fleeting. I didn’t need affirmation—I knew what I had recommended was appropriate. I was still disappointed that I couldn’t get anyone to pay attention and do something. The fact that it took an outside audit to shine a spotlight on operational failures that were known and had been happening for years reminded me of why I had been so frustrated while working in that organization. What I felt most was relief that I had moved on.”</blockquote><p></p><p>Mary obviously expected the people she worked with to care about performance, listen to her recommendations, and be interested in taking improvement actions. When those expectations went unfulfilled, even the affirmation in the audit finding wasn’t enough to overcome her frustration and disappointment. </p><p>We all have expectations of the people we interact with in the working world. Were hers reasonable? Should she have approached the situation differently? What advice would you offer to help her get over her frustration and disappointment and avoid unfulfilled expectations in the future?</p><div><br /></div>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com1tag:blogger.com,1999:blog-4205943024394833441.post-39666913176579345192018-11-13T09:43:00.000-05:002018-11-21T11:18:28.030-05:00When Solutions Become Distractions<div class="separator" style="clear: both; text-align: center;">
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Every once in a while, I have one of those annoying dreams in which either I am lost or I have lost something (coat, phone, keys, wallet, luggage, passport, password, tickets, directions, dog, etc.) and no matter what I do in the dream the situation keeps getting worse. The dreams are unsettling enough, but according to <a href="http://dreamstop.com/lose-losing-dream-symbol/" target="_blank">DreamStop</a> they also might signify I have lost out on one or more real opportunities during my waking life. Ouch! Then a few nights ago I dreamt I was in a hotel room trying to pack my bags to come home but I couldn’t fit everything into my luggage because I kept finding things in the room that I had lost in prior dreams. I need to visit that hotel.<o:p></o:p></div>
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Back in 1919, when Walter Chrysler left General Motors, he was involved in a bitter disagreement with GM founder Billy Durant over Durant’s operating priorities, his management style, and what Chrysler viewed as his refusal to recognize untapped opportunities to control costs and improve efficiency. Chrysler was later quoted as saying:<o:p></o:p></div>
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<i>“The reason so many people never get anywhere in life is because when opportunity knocks, they are out in the backyard looking for four-leaf clovers.”</i></blockquote>
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I thought of Chrysler’s four-leaf clovers recently after speaking with an insurance executive friend about his claims operation. He told me he was under pressure to demonstrate improvement in his results, and he had concluded that some sort of clever, disruptive solution might be just what he needed to relieve the pressure and demonstrate his commitment to innovation. He didn’t have anything particular in mind, although he had read about <a href="https://www.investopedia.com/terms/i/insurtech.asp" target="_blank">insurtech</a>, and <a href="https://www.naic.org/cipr_topics/topic_artificial_intelligence.htm" target="_blank">artificial intelligence</a>, and <a href="https://www.gartner.com/it-glossary/digitalization/" target="_blank">digitalization</a> and they all sounded promising to him. What did I think?<o:p></o:p></div>
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Not all of us perceive opportunities in the same way, of course, and I'm grateful for that since much of my work the past few years has involved helping claims executives recognize problems and identify opportunities. Sometimes it's useful for an executive to kick things around with someone who might bring a different perspective. Not always, though, and I knew after this conversation, that my friend was ready to move into solution-mode without first analyzing the problems he needed to solve. That's not usually a formula for success.<o:p></o:p></div>
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So I suggested that he back up and focus on identifying the operating problems (and root causes) that were dragging down his results before he began to evaluate solutions. What kind of improvement in his results was necessary? Did he have a problem with claim cycle time, closing ratio, customer responsiveness, decision making, productivity, expense control, loss cost management, staff turnover, workloads, quality, or something else? What had to change? What was his timeline? How would he measure success? He became so quiet I thought we had been disconnected, but it turned out he was just disappointed with my advice. He wanted to deploy “cutting-edge” solutions, not slog through an endless, boring analysis of problems, root causes, and the cost/benefit of potential fixes. He wanted the instant gratification that comes from an immediate solution, and why not? Who doesn’t want to be known as a “solution-oriented” leader?<o:p></o:p></div>
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Well, solutions are wonderful, but only when they directly target the problem or opportunity at hand. If they don’t, even though they might seem interesting or promising, they are distractions. Like Chrysler’s four-leaf clovers, they can cause us to miss out on opportunities, and that’s not a good thing in the work world, as writer <a href="https://en.wikipedia.org/wiki/Adam_Hochschild" target="_blank">Adam Hochschild</a> so eloquently reminds us:<o:p></o:p></div>
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<i>“Work is hard. Distractions are plentiful. And time is short.”</i></blockquote>
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I don’t know what my friend ended up doing to improve his results, but I do understand how he got distracted. The siren call of a well-marketed solution can be captivating, and when we are under pressure and something resembling a solution knocks, we tend to open the door wide, even when we can’t afford the distraction. In business, falling in love too early with a solution can be a real problem. In everyday life, not so much. <o:p></o:p></div>
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I’ve been struggling for years to convince myself that I need to buy a vintage Jeep Cherokee, even though I realize the vehicle represents neither an opportunity nor a solution for me. I don’t need another vehicle, I don’t have space for one, and I’d rather spend the money on something else. Yet I persist because the search has become a harmless yet entertaining distraction which, unlike my hard-working friend, I now have the time and freedom to enjoy! <o:p></o:p></div>
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<i>Dean K. Harring is a retired insurance executive who now enjoys his time as an advisor, board member, educator, and watercolor painter. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/" target="_blank">LinkedIn</a> <i>or </i><a href="http://www.harringwatercolors.com/" target="_blank">Harring Watercolors</a><o:p></o:p></div>
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claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com1tag:blogger.com,1999:blog-4205943024394833441.post-59662582766548170912017-05-25T13:33:00.001-04:002022-02-24T11:25:50.262-05:00Integrity<i>If you have integrity, nothing else matters. If you don't have integrity, nothing else matters.” --Alan Simpson</i>
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I was at the airport in Denver, wrestling with a crossword puzzle (10 down, 9 letters, begins with I and ends with Y, clue: morally upright) while waiting to board a Southwest Airlines flight, when I heard the person sitting directly behind me stage-whisper this advice to his companion:<br />
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It doesn’t matter whether you actually have a disability—they can’t ask you for proof—just go up and request a pre-boarding document like I did. They have to give you one. Why should you wait to board with the C-group? We can sit together in better seats if we pre-board.</blockquote>
Intrigued, I turned around to look at the co-conspirators. The speaker was a tall, tanned older guy who looked like he had just come off the golf course. His companion was shorter but could have been a member of the other guy’s foursome. Their objective? Gaming the Southwest boarding process so they could get on board before passengers who had checked in early or paid extra for early boarding privileges. The shorter guy initially demurred, but when his companion gestured toward the ever-swelling group of pre-boarders assembling near the jetway, he acted. He was back in a minute with a pre-boarding document. Grinning and fist-bumping, he and his pal enthusiastically joined the pre-boarding scrum.<br />
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A few minutes later, my boarding group was announced and we pushed onto the plane. The co-conspirators were parked side by side in the second row, the middle seat between them piled with their personal items to discourage anyone from claiming it. They looked very pleased with themselves.<br />
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While gaming the boarding process at the airport probably doesn’t register very high on the moral lapse scale, it is another example of how societal norms about acceptable human behavior are shifting. Remember being taught that behaving with integrity was critical to success in life? Our parents, our teachers, our clergy, our extended family, even our friends encouraged us to be honest, to make ethical choices, and to do the right thing. Maybe that’s what society expected of us, but it’s a new world out there, a world that rewards and celebrates achievement, but no longer obsesses about the behavior that enabled the achievement. It’s all about the outcome, not the process that produced the outcome. Imagine yourself back in school, taking a math test, writing down answers and not having to show your work calculations—it’s like that! Society admires people who win, and if those winners are clever or devious enough to win by taking advantage of shortcuts, cheats or hacks to beat the system, we often admire them even more.<br />
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While the “morally indifferent” behavior exhibited by the pre-boarders was disappointing, low-integrity people who operate without any moral compass at all tend to act out much more egregiously, and in the work world that can be very challenging. I am thinking of folks I worked with over the years who, by many measures, enjoyed tremendous success even though they routinely played it fast and loose when it came to honesty, integrity, and doing the right thing. They had no rules, no limits, no honor, no shame, yet they were often celebrated as winners. They lied, and cheated, and misrepresented, and intentionally undermined their colleagues. Yet they were showered with praise, promotions, and rewards-- behavior reinforcement which helped to make them even bolder and more committed to their strategy. Sure, a couple got called out or got careless and eventually crashed and burned, but I still remember the other ones—the ones who got away, who behaved callously, immorally, and unethically yet still ended up “winning.”<br />
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It’s difficult not to wonder how that happens. Why do employers tolerate low-integrity employees who behave badly? It might be a lack of attentiveness, or a leadership/management failure, or even a deliberate decision—intentionally excusing bad behavior because of “good” results. But experts such as <a href="https://worldpositive.com/your-companys-culture-is-who-you-hire-fire-and-promote-c69f84902983">Dr. Cameron Sepah</a> and <a href="http://www.rightattitudes.com/2008/02/06/jack-welch-four-types-of-managers/">Jack Welch</a> argue that companies should not tolerate “high-performing” employees who behave badly. Imagine a two-by-two with Performance as the Y-axis and Behavior as the X-axis. Sepah recommends companies deal with employees in each quadrant as follows:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdLYVdp1O4g36WHN5MugbLuz_-EUToIL3bYbYJoMKhLc12QsKyMhAG3JSQ7NnyOKGVNXwdun2r1OWbWNKZMupTw1dl6WK4UxVMPmsAv02P_2EaB_VLQ1ILdnMTtSzewUEvZJyGDrRZow0/s1600/Performance+Behavior.JPG" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="499" data-original-width="580" height="275" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdLYVdp1O4g36WHN5MugbLuz_-EUToIL3bYbYJoMKhLc12QsKyMhAG3JSQ7NnyOKGVNXwdun2r1OWbWNKZMupTw1dl6WK4UxVMPmsAv02P_2EaB_VLQ1ILdnMTtSzewUEvZJyGDrRZow0/s320/Performance+Behavior.JPG" width="320" /></a></div>
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His message is clear and it tracks with Welch’s—employees who behave badly must be rehabilitated or removed, not tolerated. But what, exactly, is bad behavior, and how capable and willing are executives to identify it and intervene? It’s often easier and more convenient to take a <a href="http://www.dictionary.com/browse/consequentialist">consequentialist</a> view of behavior, where the consequences of a person’s conduct are the basis for any judgment about the conduct, which means behavior is only bad if the result is bad (i.e., the end justifies the means). Yet Peter Drucker tells us that if bad behavior results from the absence of character and integrity, that’s a weakness that cannot be cured:<br />
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By themselves, character and integrity do not accomplish anything. But their absence faults everything else. Here, therefore, is the one area where weakness is a disqualification by itself rather than a limitation on performance capacity and strength. </blockquote>
For more on this topic, you might enjoy reading Amy Rees Anderson’s Forbes article <a href="https://www.forbes.com/sites/amyanderson/2012/11/28/success-will-come-and-go-but-integrity-is-forever/#17b9909f470f">Success Will Come and Go, But Integrity is Forever</a>, but let’s close with Warren Buffet’s tongue-in-cheek description of the importance of integrity in the workplace:<br />
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Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy . And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.</blockquote>
So don’t hire low integrity employees, but if you must, make sure they are also dumb and lazy!<br />
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<i>Dean K. Harring is a retired executive who now enjoys his time as an advisor, board member, educator, and watercolor painter. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/">LinkedIn</a> <i>or </i><a href="http://www.harringwatercolors.com/">Harring Watercolors</a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-50439514390939610492017-03-10T16:07:00.000-05:002017-03-10T16:07:22.172-05:00Don't Make Me Hollah...<div class="separator" style="clear: both; text-align: center;">
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He was a droopy-eyed old timer, heavy around the middle, and when he strained in his folding chair to make change or rearrange his buckets you could see he had something wrong with one of his legs. But that didn’t prevent him from making serious eye contact with potential customers while bellowing like a beer vendor at Fenway Park.<br />
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“Don’t make me hollah, they’re only a dollah!” he would boom as I and hundreds of other commuters trudged past him to board our trains home. He was selling flower bouquets for a buck, and they were just the right size to carry on the train. Since he set up his cart at the main walkway to the platforms every weekday afternoon, anyone boarding a train had to walk right past him.<br />
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In the 1980s I walked by that guy most weekdays for almost five years, and I bought plenty of flowers from him, but I was young and preoccupied with my own issues so I never gave much thought to him or his business—and then I moved away. But recently, while planning a lesson on competition and competitive strategy, I started thinking about him and his business once again.<br />
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If you have studied economics at all, you probably know about <a href="http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532">Michael Porter</a> and the work he has done on industry competition, particularly his “five forces” of competition model. You can watch him talk about that model <a href="https://youtu.be/mYF2_FBCvXw">here</a>, but basically, Porter's five forces include competition from established and known rivals, new or emerging rivals, the threat of substitute products or services, as well as threats tied to the bargaining power of suppliers and customers. The weaker the forces, the more attractive the industry in terms of profitability.<br />
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As I remember it, the flower seller at North Station had no rivals on-site other than a more traditional flower shop inside the B&M terminal which offered a larger assortment of flower arrangements at much higher prices. I have no idea how he secured what seemed to be the exclusive right to sell flowers near the walkway to the train platforms, or why other competitors didn’t try to enter that space. Maybe he had competitors originally but drove them out of the market with low prices and superior location. Or maybe he had a special flower vendor’s license that was no longer available to potential competitors. I don’t know where he got his flowers, but I remember the wholesale flower exchange was not far away from the train station.<br />
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His sales transactions were quick, his product inexpensive. Impulse purchases were accommodated effortlessly--a commuter running for a train who decided to buy flowers from him could do so almost without breaking stride since he had just one price and he only accepted cash. Factor in the convenience and social usefulness of being able to purchase flowers at the last minute, particularly on birthdays, anniversaries and holidays, and it’s not hard to understand why buyers didn’t try to negotiate purchase prices with him.<br />
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I don’t have all the details, of course, but at least in my memory that flower vendor seemed to be operating in an ideal market featuring weak forces of competition, steady product supply, reliable and predictable product demand, low price sensitivity and the opportunity to make a profit. In other words, he was one lucky flower vendor! He had no real competition, so he didn’t need to worry about sources of competitive advantage, but I am sure he had a value proposition in his head built around what benefit he provided, to whom, and how he provided it better than anyone else. Using <a href="http://www.geoffreyamoore.com/bio-geoffrey-moore/">Geoffrey Moore’s</a> template (from <a href="https://www.amazon.com/gp/product/0062292986">Crossing the Chasm</a>) to outline his value proposition, I imagine it might have been something like this:<br />
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B&M Railroad commuters at North Station, Boston</td></tr>
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who want to bring flowers home as a surprise, or gift, or symbol of love and affection</div>
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we are the only flower stand directly on the walkway to the trains</td></tr>
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and we offer a wide selection of fresh flower arrangements—quick, one low cost, no waiting.</td></tr>
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The good news is that after reminiscing for a while I was able to include the flower vendor scenario as a case study in the lesson I was developing. The bad news is that my efforts to get additional details about him came up empty. I’d still like to know which of Porter’s five forces of competition eventually impacted his business, when, and how, and what he did to manage them.<br />
<br />
I plan to keep digging, but if you (or someone you know) commuted by train from Boston’s North Station in the late 1980s, please send me an email (<a href="https://www.blogger.com/null">dean.harring@gmail.com</a>) describing whatever you remember about that flower seller, his competitors, and the North Station marketplace in which he operated. It would be great to know the rest of his story.<br />
<br />
<br />
<i>Dean K. Harring is a retired executive who now enjoys his time as an advisor, board member, educator, and watercolor painter. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/">LinkedIn</a> <i>or </i><a href="http://www.harringwatercolors.com/">Harring Watercolors</a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com1tag:blogger.com,1999:blog-4205943024394833441.post-27749859807383748082017-01-27T07:53:00.000-05:002017-01-29T19:03:58.680-05:00Why Work Doesn't Work<blockquote class="tr_bq">
“The price of anything is the amount of life you pay for it.” –Henry David Thoreau</blockquote>
I spent most of my working life inside insurance companies, and as my job responsibilities increased, my workspaces improved dramatically. I started my career at a desk in a noisy bullpen with about fifty other people, and I ended it forty years later in a hushed and private executive office suite, but one thing was constant: I always had difficulty getting my work done while at work.<br />
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Noisy people, piped in music, ringing phones, scheduled meetings, ad hoc meetings, offsite meetings, committee meetings, meeting invitations, scheduled and unscheduled visitors, emails, text messages, and seemingly endless requests from colleagues for input, collaboration or assistance interfered with my ability to focus and concentrate. So I came in early, and stayed late, I worked at home at night, or on the weekends, and on flights, in the quiet car on the train, and in hotel rooms, just so I could function without those interruptions and distractions. Many of my colleagues did the same thing. We were convinced that there weren’t enough hours in the work day to get our important work done, so we willingly exchanged “life” time for more “work” time.<br />
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Once I retired I realized that most of the work accomplished in those extra hours might have been urgent, but it wasn’t really that important. In retrospect, we probably would have been better off tackling the underlying problem, i.e., redesigning our workplace and reframing our work styles to make it possible for folks to actually get their work done while at work.<br />
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This all came back to me again recently when I listened to an HBR IdeaCast in which <a href="https://basecamp.com/about">Basecamp</a> CEO <a href="https://www.ted.com/speakers/jason_fried">Jason Fried</a> was interviewed by HBR’s <a href="https://twitter.com/skgreen">Sarah Green-Carmichael</a>. The topic: <b>Restoring Sanity to the Office</b>. You can read the full interview transcript and/or listen to the interview <a href="https://hbr.org/ideacast/2016/12/restoring-sanity-to-the-office.html">here</a>. Some highlights of Fried’s observations:<br />
<ul>
<li>You know, people go to work. And when you actually ask them when they get the work done it’s not typically during the day. It’s early in the morning, late at night, on the weekends, on a plane, on a train, somewhere else. And that’s always bugged me. It just doesn’t seem right.</li>
<li>It seems like something that, for whatever reason, people put up with. But they really shouldn’t.</li>
<li>It’s very hard to do really good work when you’re constantly being interrupted every 15 minutes, every 5 minutes, every 20 minutes, every 30 minutes.</li>
<li>Certainly there are some meetings that need to happen. But my point is that I want to push back on the fact that the meeting is the first resort. I think it should be the last resort.</li>
<li>The idea that we should just layer in more time because we’re inefficient with it and we waste it– I think, basically, if you really break down your day there is more opportunity to waste time than to use time in many companies.</li>
</ul>
Fried delivered a TED talk in 2010 (<a href="https://www.ted.com/talks/jason_fried_why_work_doesn_t_happen_at_work">Why Work Doesn’t Happen at Work</a>) in which he identified the cause of the “work not happening at work” problem as M&Ms (Managers and Meetings.) Both interrupt work, and work interrupted can be every bit as damaging as sleep interrupted!<br />
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I work from home now and I control my own time and project schedule, so almost all my interruptions are voluntary and any distractions and time-wasting are of my own making. I work in a comfortable, quiet room, at my own pace, and I take breaks whenever I want to walk, or play with the neighborhood dogs, or fill the birdfeeders, or work on a watercolor portrait. I don’t have a manager interrupting me, and I only go to meetings I find interesting. I still keep a calendar, of course, but I have a different tool installed on my desktop that helps me think about how I am spending my time. It is called the countdown clock, and I installed it right after I heard <a href="https://en.wikipedia.org/wiki/Kevin_Kelly_(editor)">Kevin Kelly</a> (founding executive editor of Wired magazine) describe it during a <a href="https://itunes.apple.com/us/podcast/the-tim-ferriss-show/id863897795?mt=2">Tim Ferriss podcast</a> a while back. Based upon my birthdate, actuarial tables and a few other factors, the clock estimates how much time I likely have left on this earth.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGZFPN-UfR0WzEx1QAnzOHgNJff8V_2BqefE3d_Oj_UrPeTB6ZNjngp9HGknxCphWR4KHSB89pCfKmRFd_eoj9l0abcvcBFW9LSlBdO8veP7kNJSx1OZU4rkzYYKarpoEBgW-gTXiXAy4/s1600/countdown.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGZFPN-UfR0WzEx1QAnzOHgNJff8V_2BqefE3d_Oj_UrPeTB6ZNjngp9HGknxCphWR4KHSB89pCfKmRFd_eoj9l0abcvcBFW9LSlBdO8veP7kNJSx1OZU4rkzYYKarpoEBgW-gTXiXAy4/s1600/countdown.JPG" /></a></div>
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You don’t have to be retired to use the countdown clock—it is nothing but a gentle, sobering reminder that time flies, no matter how you spend it. Kelly said it helps him think about what’s important each day. It helps me do the same thing, but it also helps me remember that exchanging “life” time for “work” time during my career probably wasn’t quite as important and necessary as I believed it was at the time.<br />
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Intrigued? You can read more about the countdown clock at Kevin Kelly’s <a href="http://kk.org/ct2/my-life-countdown-1/">blog</a> and hear him talking about it in a short 2007 NPR interview <a href="http://www.npr.org/templates/story/story.php?storyId=14798269">here</a>.<br />
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<i>Dean K. Harring, CPCU, is a retired executive who now enjoys his time as an advisor, board member, educator, and watercolor painter. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com3tag:blogger.com,1999:blog-4205943024394833441.post-12830120355783977272016-11-10T12:54:00.001-05:002016-11-10T13:10:19.291-05:00Authenticity<div class="MsoNormal">
“I was a rock star in the 80s,” my seatmate told me on a short flight to Baltimore years ago. He looked the part--tall, English accent, 80’s shag haircut. <o:p></o:p></div>
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He wasn’t bragging--I had asked him how things were going and he told me he played lead guitar for <a href="https://en.wikipedia.org/wiki/The_Outfield">The Outfield</a>. “We were big for a while in the 80s.” <o:p></o:p></div>
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During the 80s I had three little kids and I wasn’t actively tracking emerging rock music, so I confessed that I didn’t know The Outfield, which surprised him. I asked about their biggest hit, and he said it was a song he wrote called “<a href="https://youtu.be/4N1iwQxiHrs">Your Love</a>” which nearly reached the top of the charts in 1986. You probably know the song as it has been covered hundreds of times since then and it still gets radio play on classic rock stations, but I didn’t know it by name. So he immediately did what any self-respecting rock star would do—he started singing the song for me. I recognized it (as did most of the people sitting around us) and to this day everytime I hear that song I remember my brief encounter with authentic 80s rock star <a href="https://en.wikipedia.org/wiki/John_Spinks_(musician)">John Spinks</a>.<o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdSv6LfvpWkS76-vYIE8HM8GopvD7v6n3JxcAmZrEde1MpRzFHCy-O-fFXlXCtmB1S-XleFHtql76RHfKBJksaQj1eDayg-v2ftTvC45oQ2cJzfzj4_dJuOWqVjNDXRKhxXcXykRVYDTE/s1600/The+Outfield.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="211" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdSv6LfvpWkS76-vYIE8HM8GopvD7v6n3JxcAmZrEde1MpRzFHCy-O-fFXlXCtmB1S-XleFHtql76RHfKBJksaQj1eDayg-v2ftTvC45oQ2cJzfzj4_dJuOWqVjNDXRKhxXcXykRVYDTE/s320/The+Outfield.jpg" width="320" /></a></div>
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<i>The Outfield (John Spinks, Alan Jackman, Tony Lewis)<o:p></o:p></i></div>
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I was thinking of that incident again recently while watching election coverage and ruminating about personal authenticity, which experts define as: </div>
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<blockquote class="tr_bq">
…being true and honest with oneself and others, having a credibility in one’s words and behavior, and an absence of pretense.</blockquote>
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On one level, Spinks’ serenade on the plane was intended to help me recognize his hit song. On another level, it was offered to provide support for his rock star story. He was “<a href="http://idioms.thefreedictionary.com/walk+the+walk">walking the walk</a>”, i.e., establishing credibility by demonstrating his ability to do something he claimed he could do or had done. Walking the walk used to be an essential part of developing character and reputation, of becoming authentic. <o:p></o:p></div>
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When I was growing up, if someone in my social circles claimed they could do something, it was a given that they would have to prove they could actually do it, not just talk about it. It really didn’t matter what it was--dribbling left-handed, juggling, doing a cartwheel, throwing a curve ball, naming the presidents—nobody got the benefit of the doubt. So the accountability model was very clear: if you said you could, and it turned out you couldn’t, you were going to experience social and reputational penalties.<o:p></o:p></div>
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When I entered the corporate workplace, however, I learned that in my industry being willing and able to walk the walk wasn’t quite as culturally significant as it had been in my earlier life. Folks who couldn’t walk very well, but who were accomplished at talking about the mechanics of walking, or at recounting the history of walking, or at criticizing how other people were walking, were recognized and rewarded as if they were the best walkers ever. That puzzled me, but I figured either the non-walkers had never experienced the accountability model I had grown up with, or they had forgotten about it as they aged. So many folks who were comfortable just talking the walk and being inauthentic--misrepresenting their skill levels and exaggerating their accomplishments—yet they weren’t being called on it. <o:p></o:p></div>
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How does a workplace thrive without authenticity, without accountability, and without an operating culture that values folks who walk the walk more than those who talk the walk? Why do people remain in such a workplace? Well, it’s socially awkward and politically incorrect in most corporate work situations simply to call out exaggerators and demand they demonstrate the proficiency they are claiming, particularly if the exaggerator happens to be a powerful senior leader. And leadership failure contributes significantly to the problem since <a href="http://www.cpbj.com/article/20150824/insights/150829899/organizational-culture-the-tone-is-set-at-the-top">tone is set at the top</a> and leaders set the standard for what is tolerated in the work environment. Steve Gruenert and Todd Whitaker of Indiana State University describe it this way: <o:p></o:p></div>
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The culture of any organization is shaped by the worst behavior the leader is willing to tolerate.<br />
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Which means if a leader is unwilling or unable to demand authenticity, to insist that the accountability model be an integral part of the workplace culture, it probably won’t be. How do you deal with a culture like that? Depending on how pervasive, inequitable and offensive the behavior is, and how important it is to you, you generally have three choices: tolerate it, change it, or leave it behind. <o:p></o:p></div>
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Whether it was Aesop or Lou Holtz who told us “After all is said and done, more is said than done,” embellishment is human nature and we all know it is often much easier to talk about doing something than it is to do it. Call me sentimental, but I remember life being simpler and fairer when authenticity and character were important and accountability meant doing what you said you would (or could) do. But let’s leave the final word on authenticity to Muhammad Ali, who while he didn’t hesitate to talk about what he could do (“I’m not the greatest, I’m the double greatest”) or how he felt about it (“It's hard to be humble when you're as great as I am") certainly did see a big difference between talking and doing:<o:p></o:p></div>
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Braggin' is when a person says something and can’t do it. I do what I say.<o:p></o:p></div>
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<i>Dean K. Harring, CPCU, is a retired executive who now enjoys his time as an advisor, board member, educator, and watercolor painter. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a><o:p></o:p></div>
claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com1tag:blogger.com,1999:blog-4205943024394833441.post-15296129425088682682016-08-09T08:23:00.000-04:002016-08-09T08:23:38.800-04:00Speaking Up--ReduxA few months ago, in an article called <a href="http://claimsmatters.blogspot.com/2016/05/speaking-up.html"><i>Speaking Up</i></a>, I wondered why some people decide to speak up when they encounter another person they feel is behaving inappropriately or offensively, while others don’t. The article prompted some interesting reactions from readers whose comments, not surprisingly, fit roughly into the broad human behavioral response categories I had described in the article: <i>passive, passive-aggressive, aggressive and assertive.</i>
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<i><br /></i>
Respondents in the <b>passive</b> category suggested the best course of action when confronted with offensive or inappropriate behavior is to let it slide--ignore it, walk away, don’t waste time dealing with it. They expressed concerns about assuming responsibility for policing the behavior of other people, for creating situations that could turn unpleasant or dangerous, and whether they had any legitimate right to judge whether another person’s behavior was offensive.<br />
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The <b>passive-aggressive</b> respondents were troubled by inappropriate or offensive behavior but believed it could be uncomfortable or dangerous to directly confront or challenge an offender. They were more comfortable complaining about the offensive behavior to others (or to a public authority) and hoping someone would do something about it. One expressed concern that confronting an offender might be interpreted as offensive behavior by others.<br />
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The folks in the <b>aggressive</b> category said they would not hesitate to confront a person, accuse them of behaving poorly, and demand an end to their offensive behavior, even if that behavior had been directed at someone else. These folks didn’t seem concerned that the confrontation might become unpleasant, or escalate into violence—some seemed eager to welcome that possibility. One invoked the film <a href="https://youtu.be/uxZ0UZf0mkk">American Sniper</a>, described the three types of people in the world (sheep, sheepdogs, and wolves) and said he was proud to be a sheepdog.<i></i>
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The most comprehensive comments came from folks who said that while they believed it was important to be <b>a</b><b>ssertive </b>when confronted by offensive or inappropriate behavior, they thought it was equally important to pick their shots and respect the rights of others while standing up for their own rights. Several of these folks said that focusing intensely and objectively on exactly what was happening, and why, helped them moderate their emotions, determine whether to make an issue of something and appropriately manage their behavioral response. One woman reported on a recent experience in which she used the <a href="http://mams.rmit.edu.au/owx2c90pize9.pdf">formula for assertive communication</a> to ask a line cutter to go to the back of the line and much to her surprise he did.<br />
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While most of us use all of these response styles at one time or another, is there a best approach? The answer depends entirely on the situation and the person. When we encounter something we don’t like, we have a limited choice of responses (accept it, change it, get away from it) and we choose one based upon our interpretation of the situation. Two people caught in the same unpleasant situation may interpret it differently since they each filter the experience through their own mesh of moral values, ethical beliefs, behavioral tolerances, and social/cultural expectations. They then create a story about what happened and why, and that story triggers their emotional reaction (<i>joy, trust, fear, surprise, sadness, anticipation, anger, or disgust</i>) which in turn triggers their behavioral response.<br />
<br />
Same stimulus, different interpretations, emotional reactions, and behavioral responses. Yet the flow from interpretation to emotion to behavior is neither automatic nor inexorable since humans have the ability to choose how to respond to a stimulus. Psychiatrist <a href="https://en.wikipedia.org/wiki/Viktor_Frankl">Viktor Frankl</a> described it this way:<br />
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<blockquote class="tr_bq">
Between stimulus and response there is a space. In that space is our power to choose our response.</blockquote>
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So if there’s a best practice for determining how to respond to offensive or inappropriate behavior, it probably involves making the best use of that “space” between stimulus and response. That’s where we have the power to make a simple, personal choice to ignore behavior, or to fume about it, or to get in someone’s face about it, or to calmly and respectfully assert our rights—all based upon our interpretation of the situation, the degree to which it bothers us, and what makes us feel good about ourselves. It’s a uniquely personal, mindful process.<br />
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For a colorful, entertaining and salty point of view on how one man makes use of that space, check out Niall Doherty’s first-party <a href="http://www.ndoherty.com/unoffendable/">rant</a> about his quest to become more stoic and immune to insults. Also, you might enjoy <a href="http://zenhabits.net/offend/"><i>Three Little Tricks to Deal with People Who Offend You</i></a> by Leo Babauta and <a href="https://www.psychologytoday.com/blog/wander-woman/201308/how-deal-annoying-people"><i>How to Deal with Annoying People</i></a> by Marcia Reynolds.<br />
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<i>Dean K. Harring, CPCU, is a retired executive who now enjoys his time as an advisor, board member, educator and watercolor artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com2tag:blogger.com,1999:blog-4205943024394833441.post-18318115489138004092016-06-16T09:47:00.003-04:002016-06-16T09:54:14.417-04:00You Need to See It Before You Can Paint It<i>“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” –Alvin Toffler, futurist and philosopher</i>
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<i><br /></i> Years ago, when I first started painting with watercolors, I attended a series of workshops run by award-winning Annapolis impressionist painter <a href="http://leeboynton.com/about">Lee Boynton</a>. Lee preferred to paint outside, from nature rather than from photographs, and before we started painting he would always ask the group to study the scene we were going to paint and tell him the color of the sky, or the trees, or the water. These were trick questions, designed to expose the cognitive bias known as the <a href="https://en.wikipedia.org/wiki/Curse_of_knowledge">curse of knowledge</a>, which Chip and Dan Heath, in <a href="http://heathbrothers.com/made-to-stick-introduction/"><i>Made to Stick</i></a>, described this way:<br />
<blockquote>
Once we know something, we find it hard to imagine what it was like not to
know it.</blockquote>
Students who hadn’t been exposed to Lee’s questions “knew” that the trees were green, and that the sky was blue, so that’s how they would answer, much to Lee’s delight. He would theatrically pull a few leaves off a nearby tree, poke a hole in the center of each, and ask us to take another look at the trees and the sky through the hole in the leaf and tell him what colors we could see. Invariably, this simple viewing device suspended the curse of knowledge by force-shifting our perception of the trees and sky and dramatically altering the colors we were able to see. Through the leaf, trees weren’t just green—they were blue, and yellow, and violet and green—and the sky now had elements of pink, gray, yellow, violet, orange and blue.<br />
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“Now you are seeing the light. Don’t ever start painting until you can see the light,” Lee would say, pleased that he had helped at least a few people to question what they knew and experience what it feels like to “unlearn” and “relearn” something through objective observation.<br />
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Good advice for visual artists, perhaps, but what does it have to do with anything else? The curse of knowledge bias isn’t selective—it also interferes with teaching, and communicating, and problem-solving, and learning, and planning, and selling, and negotiating, and personal relationships. If you have ever had trouble teaching someone something because they just can’t seem to grasp it, or struggled to learn something because it conflicted with something you already knew, or misread someone’s intentions, blame it on the curse of knowledge. Ditto if you had a communication fizzle because it didn’t convincingly connect all the dots for the reader, or if you failed to anticipate or solve a problem because you let what you “knew” get in the way of what you saw (or should have seen.)<br />
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Not only do we tend to favor the familiar and known (blue sky) over the unfamiliar and unknown (pink, gray, yellow, violet, orange and blue sky), the <a href="https://en.wikipedia.org/wiki/Mere-exposure_effect">familiarity principle</a> means we also feel more secure when we stay with what we know. As we get older and more experienced, we deliberately try to stay within our comfort zone by sticking with what we know and avoiding situations in which we might have to learn or do something new. That can be dangerous in any environment in which things are changing rapidly. Margie Warrell describes it this way in her Forbes article <a href="http://www.forbes.com/sites/margiewarrell/2014/02/03/learn-unlearn-and-relearn/#3d339be851c8">Learn, Unlearn and Relearn: How to Stay Current and Get Ahead</a>:<br />
<blockquote>
To succeed today you must be in a constant state of adaptation – continually
unlearning old ‘rules’ and relearning new ones. That requires continually
questioning assumptions about how things work, challenging old paradigms, and
‘relearning’ what is now relevant in your job, your industry, your career and
your life.</blockquote>
If, as Warrell suggests, learning agility is not only the name of the game but also the key to unlocking your change proficiency, what can you do to enhance your learning agility?<br />
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Start by reading Adam Mitchinson’s and Robert Morris’ <em>Center for Creative Leadership </em><a href="http://insights.ccl.org/wp-content/uploads/2015/04/LearningAgility.pdf">white paper</a> which describes learning agility as the willingness and ability to learn by continually discarding skills, perspectives, and ideas that are no longer relevant, while learning new ones that are relevant. Next, climb out of your comfort zone and take an objective look at your situation. You are seeking objectivity, so you’ll need to shift your perspective (as Lee had us do with the leaves) in order to neutralize the curse of knowledge. You won’t be looking for light, of course, you’ll be looking for an unfiltered view of reality--what is actually happening, what’s important, where the opportunities are. Only then will you be able to determine exactly what you need to learn, unlearn and relearn in order to adapt and flourish.<br />
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Sadly, Lee Boynton passed away in April of this year, but I’ll always remember his appreciation of color and light, his painting skills, his leaf trick, and one piece of thoughtful advice which, much like “look before you leap”, is probably of value in almost any situation: "Dean, you need to see it before you can paint it."<br />
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Indeed.<br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMFpHAC3s33bP_yi7P3nM2U-WyLf6lj374QrW-123WG-TIF9jl4Xb5xqMLX_HWpYn6U7l1mPOKO0Z0S-x11Q7GxAcBOXxjVYqPFpyxXGTxYDFBt1r7X0OF7g2NHWa9sna86EP8aR4Q4pc/s1600/Coco+Portrait+June+2016+small.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMFpHAC3s33bP_yi7P3nM2U-WyLf6lj374QrW-123WG-TIF9jl4Xb5xqMLX_HWpYn6U7l1mPOKO0Z0S-x11Q7GxAcBOXxjVYqPFpyxXGTxYDFBt1r7X0OF7g2NHWa9sna86EP8aR4Q4pc/s320/Coco+Portrait+June+2016+small.jpg" width="289" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Coco</td></tr>
</tbody></table>
<br />
<br />
<i></i>
<br />
<i>Dean K. Harring, CPCU, is a retired insurance executive who now enjoys his time as an advisor, board member, educator, and watercolor artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-17320334344678137192016-05-12T14:37:00.000-04:002016-05-12T14:37:13.433-04:00Speaking Up<blockquote>
<blockquote class="tr_bq">
<i>“Don't expect to make a difference unless you speak up for yourself.” --
Laurie Halse Anderson</i></blockquote>
</blockquote>
You know that prickly feeling you get when something happens and you feel you should protest, object, demand satisfaction or whatever--but you don’t?<br />
<br />
Maybe some dolt cuts in front of you in line at the coffee shop, or the loudmouth sitting in front of you in the theater won’t stop talking during the show. Your colleague takes credit for work you’ve done, or your boss, distracted by her phone, is only pretending to listen to you. Trivial slights, you have bigger things to worry about, right? Sure, but sometimes when we let things like this slide, regret comes calling. We end up fuming privately, complaining to others, replaying the event in our head and imagining how differently things might have gone if we had just spoken up.<br />
<br />
So why is it that some people speak up when they feel someone else’s behavior is offensive while others don’t? Certainly personality type has some influence (test yours <a href="https://www.psychologies.co.uk/test-do-you-stand-yourself">here</a>), but we all have the ability to choose to respond to any situation by behaving in one of <a href="https://www.uky.edu/hr/sites/www.uky.edu.hr/files/wellness/images/Conf14_FourCommStyles.pdf">four ways</a>:<br />
<ul>
<li><b>Passively</b> <i>(letting it slide)</i></li>
<li><b>Passive-aggressively</b> <i>(muttering to ourselves or others)</i></li>
<li><b>Aggressively</b> <i>(criticizing, blaming or attacking)</i></li>
<li><b>Assertively</b> <i>(standing up for our rights appropriately and respectfully.) </i></li>
</ul>
What’s more, most of us use <u>all</u> of these styles at one time or another.<br />
<br />
How do we decide which style to use? It all begins with a stimulus, of course, something happens that bothers us. We analyze the stimulus, interpreting it to come up with our own version of what happened and why. Unfortunately, many of us aren’t very good at perceiving an event objectively because of <a href="https://opentextbc.ca/socialpsychology/chapter/biases-in-attribution/">attribution bias</a>, which means we tend to attribute the behavior of other people to something personal about them rather than to something about their situation. In <a href="http://www.amazon.com/Crucial-Conversations-Talking-Stakes-Second/dp/0071771328/ref=sr_1_1?ie=UTF8&qid=1462807180&sr=8-1&keywords=crucial+conversations">Crucial Conversations</a>, Kerry Patterson described it this way:<br />
<blockquote>
<blockquote class="tr_bq">
<i>Just after we observe what others do and just before we feel some emotion
about it, we tell ourselves a story. We add meaning to the action we observed.
We make a guess at the motive driving the behavior. Why were they doing that? We
also add judgment—is that good or bad? And then, based on these thoughts or
stories, our body responds with an emotion.</i></blockquote>
</blockquote>
The emotion we feel generates our behavioral response. Let’s say you are cut off by another driver. You slam on your brakes and avoid a collision, but your coffee spills all over the passenger seat. If your interpretation of the event is that the other driver behaved recklessly and inconsiderately, you might feel angry and go into attack mode—blowing your horn, yelling, or gesturing at the other driver. If, however, your interpretation is that the other driver was driving fast because of an emergency situation, you might be annoyed or concerned, but not react at all. If that sounds wildly unrealistic, realize that attribution bias is <a href="http://www.liquisearch.com/fundamental_attribution_error/cultural_differences_in_the_error">more common</a> in <a href="https://www.verywell.com/what-are-individualistic-cultures-2795273">individualistic cultures</a>, so if you are reading this in the US there’s a good chance your default behavior involves blaming the person, not the situation.<br />
<br />
Psychologist <a href="https://dragonscanbebeaten.files.wordpress.com/2010/06/robert-plutchiks-psychoevolutionary-theory-of-basic-emotions-poster.pdf">Robert Plutchik</a> identified eight basic emotions: joy, trust, fear, surprise, sadness, anticipation, anger, and disgust. He also identified an escalating range of emotions within each, so anger includes annoyance, hostility, rage and fury. Different people experiencing the same situation may come up with a totally different interpretation because their <a href="http://www.ackley.com/lsf/f37.html">value and belief systems</a> and attribution biases are different, which shapes their interpretation of the situation, their emotional reaction, and their behavioral response. That’s why many of us might simply be annoyed by being cut off in traffic, while others may feel rage and fury, prompting them to respond with threats and violence. (See road rage data for <a href="http://www.safemotorist.com/articles/road_rage.aspx">US</a> and <a href="http://brandongaille.com/21-startling-road-rage-facts-and-statistics/">UK</a>)<br />
<br />
In primitive times, our basic stress response (fight or flight) helped us deal with life-threatening situations, and it still does, but “fight or flight” isn’t really appropriate for most of the personal offenses we need to manage today. Psychologist Randy Paterson, author of <a href="http://www.randypaterson.com/Books/assertive/assertive-workbook.html">The Assertiveness Workbook</a>, says that while people may shy away from conflict and criticism, assertiveness is a proven way to deal with offensive behavior. Assertiveness, according to the Concise Oxford Dictionary means:<br />
<blockquote>
<blockquote class="tr_bq">
<i>Forthright, positive, insistence on the recognition of one's
rights.</i></blockquote>
</blockquote>
Assertive people believe they are in charge of their own behavior, and that they alone will decide what they will do or not do in response to a situation that bothers them. They examine the offending situation carefully, testing their interpretation because they understand what they “think” is going on might not be what’s really going on. They assess the significance of the situation (is it worth pursuing?), they consider their goals in asserting their rights (what do they want to happen?), and they <a href="http://lifehacker.com/5989295/how-to-choose-your-battles-and-fight-for-what-actually-matters">choose their battles</a> realistically before moving forward.<br />
<br />
According to the <a href="http://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/assertive/art-20044644?pg=2">Mayo Clinic</a>, behaving assertively can help you:<br />
<ul>
<li>Gain self-confidence and self-esteem</li>
<li>Understand and recognize your feelings</li>
<li>Earn respect from others</li>
<li>Improve communication</li>
</ul>
It takes courage to assert yourself, but there’s a very simple but effective <a href="http://mams.rmit.edu.au/owx2c90pize9.pdf">formula for assertive communication</a> that frames up around these talking points:<br />
<ul>
<li><b>When you</b> <i>(describe the other person’s action or the event of concern in a purely factual way)</i></li>
<li><b>I feel/I felt</b> <i>(describe your own feelings in response to the above action or event – for example, sad, angry, hurt, frustrated)</i></li>
<li><b>Because</b> <i>(describe your interpretation of the event and the reason why you feel the way you do)</i></li>
<li><b>What I would like</b> in the future is or what I would prefer is <i>(offer a future alternative that better meets your needs whilst not infringing on the needs/rights of the other person).</i></li>
</ul>
So to a line cutter you might say something like:<br />
<blockquote>
<blockquote class="tr_bq">
<i>Excuse me, I noticed you just cut in front of me in line. That troubles me
because it’s not fair to me or any of the people behind me for you to try to cut
in front of us. The line forms at the rear, so please go to the back of the
line.</i></blockquote>
</blockquote>
How will the line cutter respond? <a href="http://www.spring.org.uk/2008/09/do-you-challenge-queue-jumpers-and-line.php">Research</a> tells us most line cutters who are challenged will back off, some will deny cutting the line, a few will ignore you, and the rest will respond aggressively and tell you to mind your own business (or worse). The line cutter’s response and your emotional reaction to the story you tell yourself about the response will influence what you do next. Whatever you do, remain calm, confident, and in control—no screaming or yelling—ever mindful of Mark Twain’s advice:<br />
<blockquote>
<blockquote class="tr_bq">
<i>Never argue with a fool, onlookers may not be able to tell the
difference.</i></blockquote>
</blockquote>
Finally, since you can’t control the behavior of other people, focus on controlling your own behavior. Whether or not you achieve your goal by being assertive, the very act of standing up for yourself will boost your confidence and self-respect and help you become a more effective communicator.<br />
<br />
By the way, if you are ever confronted with a “chat and cut” situation, this <a href="https://youtu.be/nXz-fOtKBU8">Larry David</a> clip could be helpful, but try not to behave like <a href="https://youtu.be/smE1kjEsdZk">this guy</a>. And since queue jumping is a global phenomenon, you might enjoy reading about the <a href="http://www.bbc.com/news/magazine-23087024">queue reality in the UK</a>, queuing in <a href="http://www.post-gazette.com/opinion/Op-Ed/2013/06/23/The-art-of-queuing-in-Europe/stories/201306230187">Europe</a>, and effective <a href="http://www.vagabondjourney.com/how-to-prevent-people-from-cutting-in-line-in-front-of-you">line cutting defenses in China</a>.<br />
<br />
<br />
<i>Dean K. Harring, CPCU, is a retired insurance executive who now enjoys his time as an advisor, board member, educator and watercolor artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-452113660049181782016-04-25T08:51:00.000-04:002016-04-25T08:51:23.778-04:00Leaders and Servants<span style="font-family: Arial, Helvetica, sans-serif;"><i>“The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant.” ― Max De Pree</i> </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><i><br /></i></span>
<span style="font-family: Arial, Helvetica, sans-serif;">I bumped into an unhappy former colleague at an industry meeting a while back. He told me that the insurance world had changed, and that now claims executives were expected to practice something called “servant leadership.” He rolled his eyes as he emphasized “servant.” He seemed genuinely concerned but I suspected he, like most people, probably wasn’t entirely clear on what the term “servant leadership” meant. So I asked him to tell me more.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">His CEO, fretting over lackluster results, decided it was time to transform the company’s operating culture and improve results by reducing the employee turnover rate and increasing customer satisfaction and persistency. He had hired a consulting firm to engineer a leadership team makeover, to move the group away from a “transactional” leadership mindset and into a “servant” leadership mindset. The firm was scheduled to be on site the following month.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">“What exactly are you concerned about?” I asked.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">“I don’t want to be a servant. I am a senior executive, a leader. My job involves establishing strategy, securing resources, attracting and developing good people, setting performance objectives, measuring performance, and delivering results.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">Of course, he had done some research and discovered Robert K. Greenleaf, who launched the modern servant leadership movement in 1970 when he published <a href="http://www.benning.army.mil/infantry/199th/ocs/content/pdf/The%20Servant%20as%20Leader.pdf"><i>The Servant as Leader</i></a>. He showed me Greenleaf’s paper on his phone, but at 27 pages long it was too onerous to be immediately useful. He read somewhere else that servant leaders believe in the concept of an inverted pyramid organization in which top management “reports” upward to lower levels of management and ultimately to front line employees.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">“Imagine that—30 years in this business and now I am supposed to report to my employees? That’s ridiculous.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">He had another commitment, so we agreed to get together later that day to talk further. </span><span style="font-family: Arial, Helvetica, sans-serif;">Curious, I pulled up the </span><a href="https://www.greenleaf.org/what-is-servant-leadership/" style="font-family: Arial, Helvetica, sans-serif;">Greenleaf Center for Servant Leadership</a><span style="font-family: Arial, Helvetica, sans-serif;"> site:</span><br />
<blockquote>
<span style="font-family: Arial, Helvetica, sans-serif;">A servant-leader focuses primarily on the growth and well-being of people and
the communities to which they belong. While traditional leadership generally
involves the accumulation and exercise of power by one at the “top of the
pyramid,” servant leadership is different. The servant-leader shares power, puts
the needs of others first and helps people develop and perform as highly as
possible.</span></blockquote>
<span style="font-family: Arial, Helvetica, sans-serif;">Larry Spears, CEO of the Greenleaf Center for Servant Leadership, identified <a href="http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1420&context=cahrswp">ten servant leader characteristics</a>:</span><br />
<ul>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Listening</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Empathy</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Healing</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Awareness</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Persuasion</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Conceptualization</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Foresight</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Stewardship</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Commitment to personal growth</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Building Community</span></li>
</ul>
<span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://toservefirst.com/about-kent-m-keith.html">Dr. Kent Keith</a>, the former CEO of the Greenleaf Center, offered a <a href="http://toservefirst.com/definition-of-servant-leadership.html">definition</a> of servant leadership that includes this explanation:</span><br />
<blockquote>
<span style="font-family: Arial, Helvetica, sans-serif;">Greenleaf said that "the servant-leader is servant first." By that he meant
that that the desire to serve, the "servant's heart," is a fundamental
characteristic of a servant-leader. It is not about being servile, it is about
wanting to help others. It is about identifying and meeting the needs of
colleagues, customers, and communities.</span></blockquote>
<span style="font-family: Arial, Helvetica, sans-serif;">Nothing particularly nettlesome so far, but what about the inverted pyramid?</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://www.kenblanchard.com/About-Us/Our-Team/Meet-Ken">Ken Blanchard</a>, in <a href="https://www.svdpusa.org/Portals/1/Servant-Leadership%20Revisited.pdf">Servant Leadership Revisited</a>, argued the pyramid should be right side up for matters such as vision, mission, values and goals, but inverted when it comes to implementation or execution. His inverted pyramid has customers at the top and customer contact people right below them. The customer contact people are responsible for meeting customer needs, and the managers and executives below them on the inverted pyramid are responsible for helping the customer contact people succeed in doing that.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">When I got back together with my former colleague later that day, I asked him to think about the ways in which he was responsible to his employees. In other words, what did he provide that they expected and needed from him? His list included strategic clarity, adequate tools and resources, fair and measurable performance objectives, timely and accurate communication, feedback opportunities, inspiration, trust, integrity, honesty, accountability, coaching and career development. We talked about the pyramid, and how responsibilities and expectations flow both ways, so he made a similar list of the things he expected and needed from his employees.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">Finally, we looked at the <a href="http://www.oxforddictionaries.com/us/definition/american_english/servant">Oxford Dictionary</a> definitions of servant:</span><br />
<ul>
<li><span style="font-family: Arial, Helvetica, sans-serif;">A person who performs duties for others, especially a person employed in a house on domestic duties or as a personal attendant.</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">A person employed in the service of a government. </span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">A devoted and helpful follower or supporter</span></li>
</ul>
<span style="font-family: Arial, Helvetica, sans-serif;">The first definition bothered him, the second didn’t apply, but he liked the third and agreed he definitely had a responsibility to be a devoted and helpful supporter of his employees.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">I told him I thought he would probably have an easy time of it with the consultants because it appeared he was already thinking like a servant leader—even though he had never thought of himself in those terms.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">“We’ll see,” he said. “Unfortunate choice of terms, though. Why couldn’t they have called it something less provocative?”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">“Ask the consultants,” I suggested.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;"><i></i> </span><br />
<br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;"><i>Dean K. Harring, CPCU, is a retired insurance executive who now enjoys his time as an advisor, board member, educator and watercolor artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a></span>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-47804337547710526072016-01-22T08:26:00.000-05:002016-03-06T15:36:13.741-05:00Slackers and Social Loafers: "Playing" the Team PlayersAmerica loves teams and team players, even outside of sports. What’s not to
love? Team players are selfless—they set aside their personal goals and focus
their talents on coordinating efforts with their fellow team members to achieve
a common goal. Teams personify cooperation and collaboration and synergistic
effort. And, of course, we’ve all been <a href="http://claimsmatters.blogspot.com/2015/10/two-heads-are-better-than-oneright.html">taught</a>
that teams inevitably generate better outcomes than individuals do.<br />
.<br />
So it’s good to be on a team, and teams do good work, which means teams and
teamwork are iconic realities of life in America--socially, educationally, and
professionally. It really doesn’t matter whether you are a toddler, a college
student, a retail clerk, or a corporate executive—today you regularly find
yourself slotted onto teams (or onto committees or into small groups) where you
are expected to behave like a good team player.
<br />
<br />
How does a good team player behave? According to leadership coach Joel
Garfinkle: “You just need to be an active participant and do more than your job
title states. Put the team’s objectives above yours and take the initiative to
get things done without waiting to be asked.” He <a href="http://careeradvancementblog.com/positive-relationships-team-members">identifies</a>
five characteristics that make a team player great:
<br />
<ol>
<li>Always reliable
</li>
<li>Communicates with confidence
</li>
<li>Does more than asked
</li>
<li>Adapts quickly and easily
</li>
<li>Displays genuine commitment</li>
</ol>
Seems obvious, but think of your most recent team experiences—were your team
members behaving that way? Were you? Not likely, and <a href="http://hackman.socialpsychology.org/">J. Richard Hackman</a>, a former
Professor of Social and Organizational Psychology at Harvard University and a
leading expert on teams, knows why. When interviewed by <a href="http://banyan.global/dt_team/diane-coutu/">Diane Coutou</a> for a 2009
Harvard Business Review article (<a href="https://hbr.org/2009/05/why-teams-dont-work"><i>Why Teams Don’t
Work</i></a>) he said:
<br />
<blockquote>
Research consistently shows that teams underperform, despite all the extra
resources they have. That’s because problems with coordination and motivation
typically chip away at the benefits of collaboration. </blockquote>
Problems with coordination and motivation interfering with team collaboration
and performance—doesn’t that sound like a rather modest challenge that could be
resolved with more effective team management? Sure, to a certain extent. Teams
are often too large, they are thoughtlessly staffed (proximity and position
rather than proven talents and ability to produce results) and they are
routinely launched with murky objectives, vague group member accountabilities,
and no formal support network for team process management. In other words most
teams don’t meet the five basic conditions that Hackman, in his book <a href="http://www.amazon.com/Leading-Teams-Setting-Stage-Performances/dp/1578513332">Leading
Teams</a>, said that teams require to perform effectively:
<br />
<ol>
<li><u>Teams must be real.</u> People have to know who is on the team and who is
not. It’s the leader’s job to make that clear.
</li>
<li><u>Teams need a compelling direction</u>. Members need to know, and agree
on, what they’re supposed to be doing together. Unless a leader articulates a
clear direction, there is a real risk that different members will pursue
different agendas.
</li>
<li><u>Teams need enabling structures</u>. Teams that have poorly designed
tasks, the wrong number or mix of members, or fuzzy and unenforced norms of
conduct invariably get into trouble.
</li>
<li><u>Teams need a supportive organization</u>. The organizational
context—including the reward system, the human resource system, and the
information system—must facilitate teamwork.
</li>
<li><u>Teams need expert coaching</u>. Most executive coaches focus on
individual performance, which does not significantly improve teamwork. Teams
need coaching as a group in team processes—especially at the beginning,
midpoint, and end of a team project.</li>
</ol>
But there’s another challenge, and it is presented by the people who don’t
want to be team players. People who, when added to a team, immediately focus
their attention and effort not on being a good team player but instead on
dodging work, avoiding exposure and manipulating the conscientious team players
into doing more than their share of the work. This is known as <a href="http://www.businessdictionary.com/definition/social-loafing.html">social
loafing</a> (or slacking) and it describes the tendency of some members of a
work group to exert less effort than they would when working alone.<i> </i>Kent
Faught, Associate Professor of Management at the Frank D. Hickingbotham School
of Business, argues in his <a href="http://www.atu.edu/jbao/Social_Loafer_Bait.pdf">paper</a> about student
work groups in the Journal of Business Administration Online that social loafers
can’t be successful, however, unless the other team members permit the loafing
<u>and </u>complete the project successfully: <i></i>
<br />
<blockquote>
…the social loafer must find at least one group member that CAN and WILL
achieve the group's goals and ALLOW themselves to be social loafed on. "Social
Loafer Bait" is the term used here to describe the profile of the ideal target
for social loafers.</blockquote>
This problem isn’t new. <a href="https://en.wikipedia.org/wiki/Ringelmann_effect">Max Ringelmann</a>, a
French agricultural engineer, conducted one of the earliest social loafing
experiments in 1913, asking participants to pull on a “tug of war” rope both
individually and in groups. When people were part of a group, they exerted much
less effort pulling the rope than they did when pulling alone. According to <a href="http://www.joshuakennon.com/mental-model-social-loafing/">Joshua
Kennon</a>, Ringelmann’s social loafing results were replicated over the years
in many other experiments (involving typing, shouting, clapping, pumping water,
etc.) leading psychologists to believe that humans tend toward social loafing in
virtually all group activities. Kennon shared two other conclusions:
<br />
<ul>
<li>The more people you put into a group, the less individual effort each person
will contribute
</li>
<li>When confronted with proof that they are contributing less, the individuals
in the group deny it because they believe they are contributing just as much as
they would have if they were working alone</li>
</ul>
I recently asked a group of friends and colleagues who have been involved in
group work at school or in their jobs to respond to a brief, unscientific survey
on how they deal with social loafing. Their response pattern is shown in
parentheses, and although respondents varied in age from 20 to 50+, answer
patterns didn’t seem to vary by age group:
<br />
<br />
<b><i>You are working on an important, time-sensitive project with a group of
people. One of the group members is slacking off, not contributing to project
work. What do you do about it? (choose one)</i></b>
<br />
<ul>
<li><i>Ask/Tell the slacker to commit to the project and start contributing
(40%)</i>
</li>
<li><i>Report the slacker to the project sponsor (3%)</i>
</li>
<li><i>Complain about the slacker to other team members (10%)</i>
</li>
<li><i>Work harder to pick up the slack and ensure the project is successful
(30%)</i>
</li>
<li><i>Follow the slacker’s lead and reduce your commitment and effort (0%)</i>
</li>
<li><i>Other (17%--most respondents who chose this reported they would employ
more than one of the listed strategies)</i></li>
</ul>
<i></i>
<b><i>How effective is the response you identified above?</i></b>
<br />
<ul>
<li><i>Solves the problem (27%)</i>
</li>
<li><i>Partially solves the problem (53%)</i>
</li>
<li><i>Fails to solve the problem (17%)</i>
</li>
<li><i>Causes other problems (3%)</i></li>
</ul>
Respondents who took some action (<i>talking to the slacker, or reporting the
slacker to the project sponsor</i>) were much more likely to report that their
actions solved all or part of the problem. Complaining to other team members
failed to solve the problem—no surprise there. And even though 30% of
respondents elected to address the slacking problem by working harder to pick up
the slack (earning themselves a “social loafer bait” ID badge) the effect of
doing so was mixed, spread fairly evenly among solving, partially solving,
failing to solve and causing other problems.
<br />
What’s not clear is why we are so willing to tolerate social loafing on group
projects and why we are so reluctant to call slackers out and hold them
accountable. According to Kerry Patterson, co-author of the book <a href="http://www.goodreads.com/book/show/15014.Crucial_Conversations">Crucial
Conversations: Tools for Talking When Stakes Are High</a>:
<br />
<blockquote>
93% of employees report they have co-workers who don't pull their weight, but
only one in 10 confronts lackluster colleagues.</blockquote>
I suppose the reality is that unless work groups are tightly managed, they
offer excellent cover for slackers--relative anonymity, little or no pressure
from team members, great individual performance camouflage--with only a slight
threat of exposure or penalty for not being a good team player. So the solution
to the social loafer problem probably involves not only changes in how groups
are formed, resourced and supported, but also changes in the group work dynamic
to eliminate the cover and camouflage and to illuminate how each individual
contributes to the group work effort (this is sometimes accomplished in
university student work groups by using a formal <a href="http://blog.blackboard.com/the-case-for-group-work/">peer review
process</a> to help group members hold each other accountable.)
<br />
<br />
As you might expect, Google is serious about team work (all Google employees
work on at least one team) and they want their teams to be successful. Their
recent <a href="https://rework.withgoogle.com/blog/five-keys-to-a-successful-google-team/">study</a>
of team effectiveness at Google determined that five team dynamics
(Psychological Safety, Dependability, Structure and Clarity, Meaning of Work,
and Impact of Work) are more important to successful teams than the talents of
the individuals on the teams. To help their teams manage these dynamics, Google
developed a tool called the <a href="http://www.businessinsider.com/googlers-told-to-share-risks-at-meetings-2015-11">gTeams
exercise</a>, described by <a href="https://www.linkedin.com/in/julia-rozovsky-642a683">Julia Rozovsky</a> of
Google People Operations as:
<br />
<blockquote>
…a 10-minute pulse-check on the five dynamics, a report that summarizes how
the team is doing, a live in-person conversation to discuss the results, and
tailored developmental resources to help teams improve. </blockquote>
According to Rozovsky, Google teams reported that having a framework around
team effectiveness and a forcing function (the gTeams exercise) to talk about
these dynamics was the most impactful part of the experience. That’s not
surprising, since any “forcing function” that puts a public spotlight on
ineffective or unacceptable behavior makes it easier to identify and eliminate
that behavior.
<br />
<br />
Given the concentration of talent at Google, I imagine the social loafers
there probably boast a more refined slacker “craftiness” pedigree than most of
us normally encounter. Still, I am betting the Google slackers aren’t very
pleased with the light and heat generated by the gTeams exercise spotlight.
<br />
<span style="font-size: x-small;"><br /></span>
<br />
<span style="font-size: x-small;"><i>Dean K. Harring, CPCU, is a retired insurance executive
who now enjoys his time as an advisor, board member, educator and watercolor
artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring
Watercolors</b></a></span>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-4681628743499222022015-10-09T09:04:00.001-04:002021-03-09T09:15:54.201-05:00Two Heads Are Better Than One...Right?<span face="Arial, Helvetica, sans-serif">Everybody knows that two heads are better than one. We’ve known it since
kindergarten, where we were taught that cooperation, collaboration, and teamwork
are not just socially desirable behaviors—they also help produce better
decisions. And while we all know that two or more people working together are
more likely to solve a problem or identify an opportunity better than one person
doing it alone, it turns out that’s only true sometimes.
</span><br /><br />
<div class="MsoNormal">
<span face="Arial, Helvetica, sans-serif" style="line-height: 107%;">Ideally, a group’s
collective intelligence, its ability to aggregate and interpret information, has
the potential to be greater than the sum of the intelligence of the individual
group members. In the 4th Century
B.C. Aristotle, in Book III of his political philosophy treatise <a href="http://classics.mit.edu/Aristotle/politics.3.three.html">Politics,</a> described
it this way:<span style="font-size: 12pt;"><o:p></o:p></span></span></div>
<blockquote>
<span face="Arial, Helvetica, sans-serif">…when there are many who contribute to the process of deliberation, each can
bring his share of goodness and moral prudence…some appreciate one part, some
another, and all together appreciate all. </span></blockquote>
<span face="Arial, Helvetica, sans-serif">But that’s not necessarily how it works in all groups, as anyone who has ever
served on a committee and witnessed <a href="https://en.wikipedia.org/wiki/Groupthink">groupthink</a> in action can
probably testify.
</span><br />
<span face="Arial, Helvetica, sans-serif"><br /></span>
<span face="Arial, Helvetica, sans-serif">Groups are as prone to irrational biases as individuals are, and the idea
that a group can somehow correct for or cure the individual biases is false,
according to <a href="http://hls.harvard.edu/faculty/directory/10871/Sunstein">Cass
Sunstein</a>, Harvard Law School professor and author (with <a href="http://www.chicagobooth.edu/faculty/directory/h/reid-hastie">Reid
Hastie</a>) of <a href="http://www.amazon.com/Wiser-Getting-Beyond-Groupthink-Smarter/dp/1422122999">Wiser:
Getting Beyond Groupthink to Make Groups Smarter</a>. Interviewed by Sarah Green
on the HBR Ideacast in December 2014, Sunstein said individual biases can lead
to mistakes, but that “…groups are often just as bad as individuals and
sometimes they are even worse.” Biases can get amplified in groups. According to
Sunstein, as group members talk with each other “they make themselves more
confident and clear-headed in the biases with which they started.” The result?
Groups can quickly get to a place where they have more confidence and conviction about a position than the individuals within the group do. They often lock in on that position and resist contrary information or viewpoints.
</span><br />
<span face="Arial, Helvetica, sans-serif"><br /></span>
<span face="Arial, Helvetica, sans-serif">Researcher Julie A. Minson, co-author (with Jennifer S. Mueller) of <a href="http://pss.sagepub.com/content/23/3/219.abstract">The Cost of
Collaboration: Why Joint Decision Making Exacerbates Rejection of Outside
Information</a> agrees, suggesting that people who make decisions by working
with others are more confident in those decisions, and that the process of
making a judgment collaboratively rather than individually contributes to
“myopic underweighting of external viewpoints.” And even though collaboration
can be an expensive, time-consuming process, it is routinely over-utilized in
business decision making simply because many managers believe that if two heads
are better than one, ten heads must be even better. Minson disagrees:
</span><br />
<blockquote>
<span face="Arial, Helvetica, sans-serif">Mathematically, you get the biggest bang from the buck going from one
decision-maker to two. For each additional person, that benefit drops off in a
downward sloping curve.</span></blockquote>
<span face="Arial, Helvetica, sans-serif">Of course group decision making isn’t simply a business challenge--our
political and judicial systems rely and depend upon groups of people such as
elected officials and jurors to deliberate and collaborate and make important
decisions. Jack Soll and Richard Larrick, in their Scientific American article
<a href="http://www.scientificamerican.com/article/you-know-more-than-you-think/">You
Know More than You Think</a> observed that while crowds are not always wise,
they are more likely to be wise when two principles are followed:<b></b>
</span><br />
<blockquote>
<span face="Arial, Helvetica, sans-serif">The first principle is that groups should be composed of people with
knowledge relevant to a topic. The second principle is that the group needs to
hold diverse perspectives and bring different knowledge to bear on a
topic. </span></blockquote>
<span face="Arial, Helvetica, sans-serif">Cass Sunstein takes it further, saying for a group to operate effectively as
a decision-making body (a jury, for instance) it must consist of:
</span><br />
<ul>
<li><span face="Arial, Helvetica, sans-serif">A diverse pool of people</span></li>
<li><span face="Arial, Helvetica, sans-serif">Who have different life experiences</span></li>
<li><span face="Arial, Helvetica, sans-serif">Who are willing to listen to the evidence</span></li>
<li><span face="Arial, Helvetica, sans-serif">Who are willing to listen to each other</span></li>
<li><span face="Arial, Helvetica, sans-serif">Who act independently </span></li>
<li><span face="Arial, Helvetica, sans-serif">Who refuse to be silenced</span></li>
</ul>
<span face="Arial, Helvetica, sans-serif">Does that sound like a typical decision-making group to you? When I heard
that description, I immediately thought of Juror 8 (Henry Fonda) in <a href="https://en.wikipedia.org/wiki/12_Angry_Men_(1957_film)" target="_blank">12 Angry Men</a>--a principled and courageous character who singlehandedly guided his fractious jury
to a just verdict. It is much harder for me to imagine our elected officials, or
jury pool members, or even the unfortunate folks dragooned into serving on a
committee or task force at work, as sharing those same characteristics.
</span><br />
<span face="Arial, Helvetica, sans-serif"><br /></span>
<span face="Arial, Helvetica, sans-serif">The good news is that two heads are definitely better than one when those
heads are equally capable and they communicate freely, at least according to </span>Dr. Bahador Bahrami <span face="Arial, Helvetica, sans-serif">of the Institute of Cognitive Neuroscience at University
College London, author of <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3371582/" target="_blank">Optically Interacting Minds</a>. He observed:
</span><br />
<blockquote>
<span face="Arial, Helvetica, sans-serif">To come to an optimal joint decision, individuals must share information with
each other and, importantly, weigh that information by its reliability
</span></blockquote>
<span face="Arial, Helvetica, sans-serif">Think of your last group decision-making experience. Did the group consist of capable, knowledgeable, eager listeners with diverse viewpoints and life experiences, and a shared commitment to evidence-based decision making and open communication? Probably not, but sub-optimal group behavior and decisions can occur even in the best of groups. In their Harvard Business Review article <a href="https://hbr.org/2014/12/making-dumb-groups-smarter">Making Dumb Groups
Smarter</a>, Sunstein and Hastie suggest that botched informational signals and
reputational pressures are to blame:</span><br />
<blockquote>
<span face="Arial, Helvetica, sans-serif">Groups err for two main reasons. The first involves <i>informational
signals.</i> Naturally enough, people learn from one another; the problem is
that groups often go wrong when some members receive incorrect signals from
other members. The second involves <i>reputational pressures, </i>which lead
people to silence themselves or change their views in order to avoid some
penalty—often, merely the disapproval of others. But if those others have
special authority or wield power, their disapproval can produce serious personal
consequences.</span></blockquote>
<span face="Arial, Helvetica, sans-serif">On the topic of “special authority” interfering with optimal decision making,
I recently heard a clever term used to describe a form of influence that is often at work in a decision-making group. The HiPPO (“Highest Paid Person’s
Opinion”) effect refers to the unfortunate tendency for lower-paid employees to defer to higher-paid employees in group decision-making situations. Not too
surprising, then, that the first item on Sunstein and Hastie’s list of things to
do to </span>make groups wiser<span face="Arial, Helvetica, sans-serif"> is “Silence the Leader.”
</span><br />
<span face="Arial, Helvetica, sans-serif"><br /></span>
<span face="Arial, Helvetica, sans-serif">So exactly how do botched informational signals and reputational pressures lead groups into making poor decisions? Sunstein and Hastie again:
</span><br />
<ul>
<li><span face="Arial, Helvetica, sans-serif">Groups do not merely fail to correct the errors of their members;
they <i>amplify</i> them.</span></li>
<li><span face="Arial, Helvetica, sans-serif">They fall victim to <i>cascade effects,</i> as group members follow the
statements and actions of those who spoke or acted first.</span></li>
<li><span face="Arial, Helvetica, sans-serif">They become <i>polarized,</i> taking up positions more extreme than those
they held before deliberations.</span></li>
<li><span face="Arial, Helvetica, sans-serif">They focus on <i>what everybody knows already</i>—and thus don’t take into
account critical information that only one or a few people have.</span></li>
</ul>
<span face="Arial, Helvetica, sans-serif">Next time you are on the verge of convening a roomful of people to make a
decision, stop and think about what it takes to position any group to make effective decisions. You might be better off taking Julie Minson’s advice, electing to choose just one other person to partner with you to make the decision instead. Seldom Seen Smith, the river guide character in <a href="http://www.amazon.com/The-Monkey-Wrench-Gang-P-S/dp/0061129763">The Monkey
Wrench Game</a> by Edward Abbey, was obviously a skeptic when it came to group
decision making, but he may have been on to something when he declared:
</span><br />
<blockquote>
<span face="Arial, Helvetica, sans-serif">One man alone can be pretty dumb sometimes, but for real bona fide stupidity,
there ain't nothin' can beat teamwork. </span></blockquote>
<span face="Arial, Helvetica, sans-serif"><br /></span>
<span face="Arial, Helvetica, sans-serif"><i>Dean K. Harring, CPCU, CIC is a retired insurance executive who now enjoys
his time as an advisor, board member, educator and watercolor artist. He can be
reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a></span>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com1tag:blogger.com,1999:blog-4205943024394833441.post-40056336639071379872015-08-03T16:09:00.000-04:002015-08-03T16:09:51.099-04:00What Got You Here Won't Get You There <br />
That’s the catchy title of a 2007 book by <a href="https://en.wikipedia.org/wiki/Marshall_Goldsmith">Dr. Marshall
Goldsmith</a>, an award winning author, business thought leader, professor and
executive coach who heads the <a href="http://www.marshallgoldsmithgroup.com/">Marshall Goldsmith Group</a> of
consultants <i>(mission: to help successful leaders get even better)</i> and
maintains the free <a href="http://www.marshallgoldsmithlibrary.com/">Marshall
Goldsmith Library</a>. He has written and/or edited <a href="http://www.marshallgoldsmithlibrary.com/html/marshall/books.html">35
books</a>, mostly about leadership, learning, change and personal improvement. I
found a copy of this <a href="http://www.amazon.com/gp/product/1401301304?ie=UTF8&tag=marshgoldslib-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=1401301304">book</a>
at a library sale recently, and I recommend it, but that’s just background.
<br />
<br />
Some weeks earlier, I had agreed to help kick off a senior management meeting
at a company run by some former colleagues of mine who had escaped from an
insurance company claims environment nearly 20 years earlier to start up their own
specialty claims business. Over the years their business flourished, expanding
in scope and size to the point where the founders knew it was time to pull
together their management team and discuss what needed to be done to move the
company to the next level. They wanted me to help set the proper tone for their
meeting by talking about change challenges and reviewing some of the things
successful companies do, and don’t do.
<br />
<br />
Since I was heading off on vacation, I thought I would spend some of my
leisure time preparing by re-reading my favorite articles about successful
companies, and by reviewing some of the many notebooks I had filled over the
years with on-topic material. I also brought along Goldsmith’s book, and read it
through one rainy day. If you haven’t read it, I think I can give a quick
overview without spoiling it for you. The theme is that most of us have bad
habits, and even if those bad habits somehow helped to get us to a certain
level, they might just prevent us from moving to or being successful at the next
level. When I read through the habits (like delusional thinking, denial,
overconfidence, failing to listen, dismissing feedback, failing to plan, blaming
failures on external, uncontrollable factors, and allowing distractions to
interfere with achieving objectives) I started feeling a bit uneasy, even
embarrassed, because at one time or another in my career I knew I was probably
guilty of all of them.
<br />
<br />
But then it hit me—Goldsmith was writing about personal, individual habits,
but companies are collections of people so they have their own habits and ways
of doing things (their culture.) Entrepreneurs imprint their own habits on their
company, so they directly influence their company’s success through their
imagination and insights, their willingness to take chances, their resiliency,
their commitment, and the unique set of skills, behaviors and attitudes they
bring to the effort. Through scrambling, innovating, scraping by, doing without,
overextending and even overpromising, the successful ones keep their businesses
going, and growing. Of course it’s not a linear path to success--they lurch,
they make mistakes, then they recover and learn from them. But one fine day they
realize they are actually making it, competing successfully in whatever business
niche they selected. At that point one of two things can happen:
<br />
<ul>
<li>They celebrate, relax, and begin to suffer from the “complacent lethargy”
that Jim Collins and Jerry I. Porras <a href="http://www.amazon.com/Built-Last-Successful-Visionary-Essentials/dp/0060516402">(Built
to Last)</a> called the <a href="http://www.jimcollins.com/lib/builtToLast/ch11_p238.html">“We’ve Arrived
Syndrome”</a></li>
<li>They start to dream about expanding their business, diversifying into other
products and services, entering new markets, making acquisitions...you know,
taking their business to the next level. </li>
</ul>
Maybe both things happen. But if they get past the dreaming and start in on
the planning, they often realize that the skills and behaviors they used to get
their business going and help it survive may not be the ones they need to make
it thrive at the next level. So what’s a company to do at that point? Of course
that’s what my former colleagues wanted to get into at their meeting.
<br />
<br />
So at the management meeting I ended up sharing with the group some of the
most impactful (to me) things I have learned about successful companies, such as
their tendency to operate with three perspectives simultaneously: <i>strategic,
governance and control, and execution</i>. Sounds reasonable, but juggling those
three can be complicated and counterintuitive at a smaller company, where
managers often prefer to stay within their comfort zone and focus on execution.
But even with flawless execution, a company still needs both a winning strategy
<u>and</u> a capable governance/risk management protocol in place to ensure long
term success.
<br />
<br />
Successful companies tend to share certain characteristics:
<br />
<ul>
<li>They have strategic clarity</li>
<li>They have objectives and performance metrics that encourage behavior that
supports their strategy</li>
<li>Their rewards are aligned with achievement of those objectives and
performance metrics</li>
<li>They provide regular, constructive feedback to individuals regarding
performance against objectives and metrics</li>
</ul>
Successful companies share certain capabilities:
<br />
<ul>
<li>Talent (knowledge, skill and will)</li>
<li>Speed (capacity for rapid, meaningful change)</li>
<li>Learning (across silos and boundaries)</li>
<li>Shared mindset (on the same page)</li>
<li>Accountability (willingness to accept responsibility for behaviors and
results)</li>
<li>Collaboration (leveraging relationships, sharing work and
responsibility)</li>
</ul>
I had the management team do a quick capability self-assessment from two
perspectives, rating themselves as a management team, and then rating their
company as a whole on a scale of 1 to 10 in each of those six capability areas
(1 means no capability and 10 means industry leading capability)<b> </b>and
flip-charted the results. That’s an easy and quick exercise that often produces
interesting insights into potential conflicts and barriers to success.
<br />
<br />
We also unpacked the three performance categories often associated with
talent in a knowledge-intensive business: KNOWLEDGE, SKILL and WILL.
<br />
<ul>
<li>In the claims service business, <b>KNOWLEDGE</b> involves understanding the
law, regulations, contracts and policy forms, as well as understanding what
customers want and knowing how to deliver it within necessary margins of
compliance, speed, service and accuracy.</li>
</ul>
<ul>
<li><b>SKILL</b> usually refers to doing, not knowing. Employing best practices,
interpreting complicated coverage situations, correctly calculating a business
income loss or reinsurance penalty, investigating, evaluating, negotiating,
resolution, recovery, communicating with stakeholders, etc.</li>
</ul>
<ul>
<li><b>WILL</b> refers to the commitment, desire, discipline, or motivation to
do something and do it well.</li>
</ul>
Finally, I urged them to accomplish four things in their meeting:
<br />
<ul>
<li>Create strategic clarity. Agree on what business they are in, and what
business they want to be in, and articulate what they need to know and be able
to do in order to be successful. </li>
<li>Complete a stakeholder needs analysis and develop a shared view of who their
stakeholders are <i>(potentially anyone with a vested interest in how well they
operate their business)</i> and what those stakeholders need in order to be
successful and content. </li>
<li>Take another look at the capability self-assessment summary (the flipchart)
and do an honest and critical assessment of their capabilities, particularly
their talent. Do they really have the talent and the ability to meet stakeholder
needs better, faster and cheaper than their competitors? If not, where are the
capability gaps and how will they close them? </li>
<li>Carefully consider the WILL component of talent within the framework of
change and business evolution. Determine what steps to take to influence
attitudes and motivation and move their management team, and their company, from
compliance to commitment.</li>
</ul>
I enjoyed seeing my colleagues again, and meeting their management team, and
I heard later that their meeting went well. A few days after that meeting I came
across this quote I used in an earlier <a href="http://claimsmatters.blogspot.com/2014/04/competence-blend-of-knowledge-skill-and.html">article</a>, attributed
to German writer and politician Johann Wolfgang von Goethe (and also, variously,
to Leonardo Da Vinci and Bruce Lee):
<br />
<blockquote>
Knowing is not enough; we must apply. Being willing is not enough; we must
do. </blockquote>
In the talent context, it sounds like whoever said this believed in
execution. Knowledge and will alone were not enough—he considered skill, the
ability to do the necessary things well, to be the critical component of talent.
I see it a bit differently, believing that success in almost any human
undertaking requires all three elements of talent (knowledge, skill and will.)
To me, skill is derivative, developed through the combination of knowledge
(understanding what needs to be done, when and how) and will (practicing and
perfecting) but I suppose that’s one of the reasons why people find the talent
topic so fascinating.
<br />
<br />
For a thoughtful look at talent management in the 21<sup>st</sup> century,
check out this Harvard Business Review <a href="https://hbr.org/2008/03/talent-management-for-the-twenty-first-century">article</a>
from professor <a href="https://mgmt.wharton.upenn.edu/profile/1307/">Peter
Capelli</a>. And for an interesting overview of how taking a strategic approach
to talent management can help power innovation, growth and market advantage,
take a look at this <a href="http://www.pwc.com/en_US/us/people-management/publications/assets/talent-to-win.pdf">Talent
To Win</a> whitepaper from PwC.
<br />
<br />
<br />
<i>Dean K. Harring, CPCU, CIC is a retired insurance executive who now enjoys
his time as an advisor, board member, educator and watercolor artist. He can be
reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a>claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-18796149454659770792015-06-19T07:44:00.000-04:002015-06-19T07:44:30.681-04:00Just the Facts<i></i> <br />
<i>“Prejudice is a great time saver. You can form opinions without having to get the facts.” --E. B. White</i> <br />
<i><br /></i>
Years ago I worked with an insurance company CEO who took immense pleasure in putting people on the spot in meetings. First he would ask someone to explain why something was happening, and when they began to answer he would cut them off with this comment: <br />
<blockquote>
“That’s not an explanation, that’s an excuse.”</blockquote>
If they tried to argue that point, he’d cut them off again with the same comment. It was an awkward and uncomfortable dynamic, but the first time I witnessed it I couldn’t help but reflect upon the distinction between an explanation and an excuse. Both involve an attempt to describe why something happened, of course, but an excuse has a motive an explanation doesn’t have—self-protection. One definition of <a href="https://en.wiktionary.org/wiki/excuse">excuse</a>: <br />
<blockquote>
An explanation designed to avoid or alleviate guilt or negative judgment</blockquote>
According to Jenise Harmon at <a href="http://blogs.psychcentral.com/your-life/2013/08/excuse-or-explanation-is-there-a-difference/">PsychCentral</a>, excuses are defensive attempts to deny responsibility, and they often emerge when someone feels threatened. Next time you are trying to figure out why something happened, and you realize you have been methodically discounting and discarding any explanation that might implicate or reflect poorly on you, hit PAUSE. You’ve probably been looking for an excuse, particularly if you don’t believe (or don’t want to believe) you are responsible for whatever happened. The urge to protect yourself when threatened is normal—and most of us learn how to make excuses and shift blame when we are children. As we get older, the reasoning error known as <a href="https://en.wikipedia.org/wiki/Confirmation_bias">confirmation bias</a> enables us to focus on information that confirms our beliefs while we ignore contradictory information. Psychology expert <a href="http://psychology.about.com/od/cognitivepsychology/fl/What-Is-a-Confirmation-Bias.htm">Kendra Cherry</a> describes it this way: <br />
<blockquote>
While we like to imagine that our beliefs are rational, logical, and objective, the fact is that our ideas are often based on paying attention to the information that upholds our ideas and ignoring the information that challenges our existing beliefs.</blockquote>
Confirmation bias interferes not only with how we gather information, but also with how we interpret it, which helps explain the <a href="http://psycnet.apa.org/psycinfo/1981-05421-001">attitude polarization</a> that often happens when people with dissimilar values and beliefs look at the same information and interpret it very differently. <a href="http://www.cision.com/us/2013/10/cognitive-bias-what-customers-hear/">Experts</a> say the responsible root causes include wishful thinking, ego, memory limitations and our inability to process information effectively. And of course the persistent and undeniable need we humans have to <a href="https://www.psychologytoday.com/blog/shift-mind/201103/why-is-it-so-important-be-right">be right</a>: <br />
<blockquote>
Another explanation for confirmation bias is that people tend to weigh up the costs of being wrong, rather than investigate in a neutral, scientific way.</blockquote>
In college I studied the natural sciences, so I learned to approach problems using the <a href="http://dictionary.reference.com/browse/scientific+method">scientific method</a> , an evidence-based technique to explain how and why things happen. The scientific method has three steps: <br />
<ul>
<li>Observe and collect data </li>
<li>Analyze and develop a hypothesis </li>
<li>Test and challenge the hypothesis </li>
</ul>
There’s no room for confirmation bias in science. Scientists are trained to be objective and skeptical, to research a situation, propose an explanation, then test and refine it through experimentation. They follow an iterative, fact-driven process in which the objective is to come up with a solid hypothesis and then challenge it. If peer review and other attempts to disprove it fail, then a well-researched, rigorously tested hypothesis might eventually become a theory—a broadly accepted truth, reliable enough to make predictions that can be validated by experimentation. <br />
<br />
Unfortunately, you don’t commonly see anything as rigorous and disciplined as the scientific method being used to address challenges in business. In some dark corners of the property casualty insurance business, for instance, it is entirely acceptable for an executive with a hunch (or a bias, a fear, or even a guilty conscience) to disguise a conjecture or an excuse as a theory. A theory developed with no objective research, no validation, and a healthy dose of confirmation bias. Even worse, such theories are often carelessly advanced. After all, since it’s only a theory, where’s the harm if it is flawed or incorrect? If you manage an insurance claims operation, you know what I am talking about, since you’ve probably squandered innumerable hours debunking theories about claims and the claims handling process that were promulgated by well-meaning (and some not-so-well-meaning) folks. <br />
<br />
Let’s bring this pervasive problem to life by imagining we are observing an insurance company executive management board meeting. The numbers aren’t looking good, so the CEO turns to the Chief Underwriting Officer (CUO) and asks why the loss ratio is trending higher than planned. “I have a theory,” says the CUO, and he spins an elaborate tale in which the claims department, by setting case-level loss reserves that were too high, was encouraging adjusters to make loss payments that were also too high, artificially inflating the loss ratio. The meeting room goes silent. The CUO holds his breath, mentally bracing himself to try again, when suddenly the CFO mutters “We should look into that.” The CEO nods and instructs the group to go off-line and figure out why case level loss reserves are being overstated. As observers we are surprised, and the Chief Claims Officer is speechless, but the CUO is beaming like a movie character on death row who has just been informed that the governor has granted a last minute stay of execution. <br />
<br />
Perhaps you’ve witnessed a scenario like this, or been caught up in the disruptive all-hands fire drill it generated. Now imagine a month has passed, the executive management board is meeting once again, and the cross-functional team charged with determining why case level loss reserves were being overstated reports its findings: <br />
<ul>
<li>No evidence of case level reserve overstatement</li>
<li>No evidence of inappropriate loss payment inflation</li>
<li>Some evidence that rates being charged were being discounted to levels significantly lower than planned</li>
<li>Solid evidence that risk selection guidelines were not being followed consistently by underwriters </li>
</ul>
Finally, facts! Business discussions are usually more useful and fructuous when framed with facts and evidence instead of hunches and suspicions, so this imaginary follow-up executive management board meeting might actually accomplish something. Perhaps the CUO will agree with the findings and accept accountability and responsibility for the inflated loss ratio, which would probably end the discussion. Or he might stay the course, disputing the findings and offering another explanation. No matter which way it goes, however, hopefully this time around the CEO will be a more demanding and discerning discussion leader. While rejecting half-baked theories with the admonition “That’s not an explanation, that’s an excuse” might be insensitive and provocative, at least it’s a nod in the direction of the scientific method. <br />
<br />
To see more about the laws of social behavior, check out Richard Connif’s amusing <a href="http://www.smithsonianmag.com/arts-culture/in-the-name-of-the-law-165852105/?no-ist">article</a> in the Smithsonian Magazine, and for a deeper look at the cognitive biases that interfere with rational decision making, check out this <a href="http://io9.com/5974468/the-most-common-cognitive-biases-that-prevent-you-from-being-rational">article</a> by George Dvorsky. To understand how and why AIG has embraced evidence-based decision making, take a look at this <a href="https://hbr.org/2014/10/how-aig-moved-toward-evidence-based-decision-making/">HBR article</a>. Finally, for readers who are Dragnet fans, Jack Webb as Joe Friday never actually said “Just the facts, Ma’am” on the show, but Dan Aykroyd said it while playing Joe Friday’s nephew in the 1987 movie <a href="https://www.youtube.com/watch?v=R374Ib2LqQY">Dragnet</a>. <br />
<br />
<i>Dean K. Harring, CPCU, CIC is a retired insurance executive who now enjoys his time as an advisor, board member, educator and animal portrait artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a><i>.</i><br />
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claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-90278160847495266812015-05-14T11:43:00.000-04:002015-05-14T11:45:19.815-04:00Clarity Affords FocusI was young, new to the insurance industry and eager to advance my career when I first heard that the best way to get ahead in the business was to change employers every 5 years (<a href="http://www.roberthalf.com/finance/blog/job-hopping-career-strategy-or-red-flag">3 years now.)</a> Serial job-hopping might not have been an attractive or comfortable strategy for the timid or insecure, I was told, but for those willing to uproot and repeatedly challenge and prove themselves it promised a fast-track shot at superior compensation, more diverse and interesting job experiences and exceptional career growth. I went all in, and over the next 40 years I worked with eight different employers and more than a dozen different CEOs, all in the insurance claims business, and served as the Chief Claims Officer at 5 different companies. Some of my moves were regrettable, and I suffered through my share of intense, character-building experiences, but along the way I learned three things that helped make my overall career experience fascinating and gratifying: <br />
<ul>
<li>How to think and plan strategically </li>
<li>How to identify and manage stakeholder relationships </li>
<li>How to design and implement performance measures to support achievement of organizational objectives </li>
</ul>
I also learned one other thing. In the property casualty insurance business, there is no generally accepted performance profile of claims management excellence, no standardized claims performance scorecard. As I changed jobs I was amazed at how variable (not to mention capricious, ill-considered, unfair or non-existent) the claims performance assessment process was from company to company. Even within a single company it was common for executives inside and outside of claims to evaluate performance of their claims operation differently, often by looking at “key performance indicators” of dubious reliability and value. And in the infrequent situation where everyone agreed on a slate of claims performance categories, they often ranked or weighted them differently. Or they ignored them and focused on some new indicator. <br />
<br />
To have any chance at success, a Chief Claims Officer needs to clearly establish, with his/her CEO, exactly how the claims operation can contribute to achievement of the company’s strategic objectives, and how performance will be evaluated. Knowing and communicating those expectations is absolutely essential, since a claims leader who wants employees to perform at their best must do <a href="http://claimsmatters.blogspot.com/2015/04/a-man-dog-and-performance-expectations.html">four things</a>: <br />
<ul>
<li>Communicate performance expectations and confirm understanding </li>
<li>Use measures of performance and success that are well-designed, explicit and understood </li>
<li>Provide the resources and support they need to succeed </li>
<li>Give appropriate guidance and feedback so they can produce the best results </li>
</ul>
Three of those four things demand clarity on key performance indicators, which is why an agreed set of performance indicators is the cornerstone of any claims strategy. I found that evaluation conversations with CEOs could be circular and unrewarding, so I developed a balanced set of claims performance categories and used them to frame those discussions and illustrate options. I also carried that framework with me to each new company, where I reviewed it with the CEO and adapted it as needed to fit the circumstances and strategy of the new company. <br />
Recently I invited a small group (50) of insurance Chief Claims Officers, CEOs and COOs to provide me with some feedback on claims performance categories by asking them to do the following: <br />
<br />
<em>Please rank the following claims performance categories in terms of their importance to you when evaluating the effectiveness of your claims operation. </em> <br />
<ul>
<li><em>Claim loss cost management (average paid, leakage ratio, etc.)</em></li>
<li><em>Claims expense management (allocated and unallocated)</em></li>
<li><em>Claims productivity and throughput (closing ratio, cycle time, reopening ratio, aged pending)</em></li>
<li><em>Customer satisfaction (premium paying customer)</em></li>
<li><em>Agent/Broker satisfaction</em></li>
<li><em>Internal stakeholder satisfaction (business units, underwriters, actuaries, etc.)</em></li>
<li><em>Loss reserve adequacy, accuracy and timeliness</em></li>
<li><em>Regulatory compliance (avoidance of fines, penalties, negative publicity and other unwelcome surprises)</em></li>
<li><em>Employee engagement/satisfaction</em></li>
<li><em>Claims fraud detection and mitigation</em></li>
</ul>
The weighted average results showed strong ranking alignment between the two groups:<br />
<br />
<table border="1" cellpadding="0" cellspacing="0"> <tbody>
<tr> <td width="249"><b>Performance Category</b></td> <td width="110"><b>Combined Group Rank</b></td> <td width="96"><b>CEO/COO Rank</b></td> <td width="103"><b>Chief Claims Officer Rank</b></td></tr>
<tr> <td valign="top" width="249">Loss Cost Management</td> <td width="110"><div align="center">
1</div>
</td> <td width="96"><div align="center">
2</div>
</td> <td width="103"><div align="center">
1</div>
</td></tr>
<tr> <td valign="top" width="249">Expense Management</td> <td width="110"><div align="center">
5</div>
</td> <td width="96"><div align="center">
6</div>
</td> <td width="103"><div align="center">
4</div>
</td></tr>
<tr> <td valign="top" width="249">Productivity</td> <td width="110"><div align="center">
4</div>
</td> <td width="96"><div align="center">
4</div>
</td> <td width="103"><div align="center">
5</div>
</td></tr>
<tr> <td valign="top" width="249">Customer Satisfaction</td> <td width="110"><div align="center">
3</div>
</td> <td width="96"><div align="center">
3</div>
</td> <td width="103"><div align="center">
3</div>
</td></tr>
<tr> <td valign="top" width="249">Agent/Broker Satisfaction</td> <td width="110"><div align="center">
8</div>
</td> <td width="96"><div align="center">
7</div>
</td> <td width="103"><div align="center">
8</div>
</td></tr>
<tr> <td valign="top" width="249">Internal Stakeholder Satisfaction</td> <td width="110"><div align="center">
10</div>
</td> <td width="96"><div align="center">
10</div>
</td> <td width="103"><div align="center">
10</div>
</td></tr>
<tr> <td valign="top" width="249">Loss Reserve Adequacy, Accuracy and Timeliness</td> <td width="110"><div align="center">
2</div>
</td> <td width="96"><div align="center">
1</div>
</td> <td width="103"><div align="center">
2</div>
</td></tr>
<tr> <td valign="top" width="249">Regulatory Compliance</td> <td width="110"><div align="center">
7</div>
</td> <td width="96"><div align="center">
5</div>
</td> <td width="103"><div align="center">
7</div>
</td></tr>
<tr> <td valign="top" width="249">Employee Engagement</td> <td width="110"><div align="center">
6</div>
</td> <td width="96"><div align="center">
8</div>
</td> <td width="103"><div align="center">
6</div>
</td></tr>
<tr> <td valign="top" width="249">Claims Fraud Detection and Mitigation</td> <td width="110"><div align="center">
9</div>
</td> <td width="96"><div align="center">
9</div>
</td> <td width="103"><div align="center">
9</div>
</td></tr>
</tbody></table>
<br />
But the individual responses told a different story. Loss reserve adequacy was ranked as most important by the CEO/COO group as a whole, for example, yet 30% of the respondents didn’t even rank that category in the top three. Employee engagement was ranked 8th<sup> </sup>by the group, yet 20% of the respondents ranked it in the top 2. The Chief Claims Officer group ranked loss cost management as most important, yet 30% of them didn’t believe it belonged in the top 3. One Chief Claims Officer said the most important performance category was employee engagement, as did one CEO/COO—let’s hope they work together! The individual rankings were all over the place, even for the internal stakeholder satisfaction category, which both groups ranked as least important, although 15% of the Chief Claims Officers had it in the top 5 (no one in the CEO/COO group did.)<br />
<br />
What’s the takeaway? <a href="http://en.wikipedia.org/wiki/Thomas_J._Leonard">Thomas J. Leonard</a> probably put it best: <em>“Clarity affords focus.”</em> If you are a Chief Claims Officer, have a conversation with your CEO/COO and make certain you are aligned on what success looks like and how it is measured in your claims operation. Use the performance category framework in the survey for your discussion, or develop your own, but don’t fall into the trap of assuming that all performance categories are equally important. They may all be important, but they are not equally important, so your job is to identify and deliver on those that matter the most to your organization. Get clarity, and then focus. After all, if your company’s strategy relies upon the claims customer experience as a competitive differentiator, your claims strategy should be designed and your resources deployed to deliver that first and foremost. <br />
<br />
The claims performance category survey will be open through the middle of June, 2015. If you would like to participate in the survey, you can do so <a href="https://www.surveymonkey.com/s/SLNC796">here</a>. <br />
<br />
<i>Dean K. Harring, CPCU, CIC is a retired insurance executive who now enjoys his time as an advisor, board member, educator and animal portrait artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a><i>.</i> <br />
<br />claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-63255335782793231982015-04-27T08:50:00.001-04:002015-04-27T08:50:54.662-04:00A Man, a Dog, and Performance Expectations<div class="MsoNormal">
<i><b>"The factory of the future will have two employees--a man
and a dog. The man's job will be to feed the dog. The dog's job will be to
prevent the man from touching any of the automated equipment."
--Warren Bennis</b></i><o:p></o:p></div>
<div class="MsoNormal">
<i><br /></i></div>
<div class="MsoNormal">
What a lucky man and lucky dog, stepping into shiny
new factory-of-the-future jobs bristling with role clarity and explicit
performance expectations. Imagine how happy and fortunate these two employees
felt on their first day of work!<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Fast forward 12 months to performance appraisal time.
While both man and dog are confident they performed well, a new reality emerges
during performance discussions. Their boss agrees that the man did a good job
feeding the dog, but marks him down for not providing the dog with sufficient
water and not washing and walking him enough. Then the boss tells the dog that
he did a good job keeping the man away from the equipment, but marks him down
for not collaborating effectively with the man on watering and walking and
washing tasks. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Of course the man and the dog are disappointed, and
confused. They thought they understood their roles and the performance
expectations associated with those roles, only to find out they were actually
being evaluated against a different, broader set of expectations. How
could that have happened?<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Unfortunately, it happens all the time. Organizations
still using an old-school annual appraisal process probably see it more often
than those that use an interactive performance management approach (see a
thoughtful review of the difference between those two approaches <b><a href="http://www.peoplestreme.com/what-is-performance-management.shtml"><span style="font-weight: normal;">here</span></a></b>) but it can happen anytime
there’s a performance expectation communication failure. And such failure has
consequences. Susan M. Heathfield describes it this way in <b><span style="font-weight: normal;"><a href="http://humanresources.about.com/od/teamworksuccess/qt/clear_expectations.htm">What's the Big Deal About Clear Performance
Expectations?</a></span></b></div>
<blockquote class="tr_bq">
A lack of clear performance expectations is cited by
readers as a key contributing factor to their happiness or unhappiness at work.
In fact, in a poll about what makes a bad boss bad, the majority of
respondents said that their manager did not provide clear direction. This
factor affected their sense of participation in a venture larger than
themselves and their feelings of engagement, motivation, and teamwork.</blockquote>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
Alyssa Danigelis in <a href="http://www.inc.com/guides/2010/08/how-to-communicate-employee-expectations-effectively.html">How
to Communicate Employee Expectations Effectively</a> likens it to the
reality show <a href="http://en.wikipedia.org/wiki/Survivor_%28U.S._TV_series%29">Survivor</a>:</div>
<div class="MsoNormal">
<o:p></o:p></div>
<blockquote class="tr_bq">
Employee expectations gone awry can practically
be spotted from a helicopter miles away. The tension becomes so thick it
changes the air. Anxiety spreads. Alliances form. A mutiny brews. At the
failing end of the communication spectrum, the workplace resembles a <i>Survivor</i> tribal
council.</blockquote>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
If you have ever worked in organization operating at the
“failing end of the communication spectrum” then Alyssa’s reference to the
Survivor reality show may stir up painful memories. After all, if in your
workplace the Survivor slogan <i>(Outwit, Outplay, Outlast)</i> accurately
characterizes the prevailing operating shared mindset and the gambits you and
your colleagues use to interact with one another, it’s probably time to move
on. But if you’re stuck in such an environment, and nothing seems to be going
well, this classic article by Jean-François Manzoni and Jean-Louis
Barsoux in the Harvard Business Review might be of interest to you: <a href="https://hbr.org/1998/03/the-set-up-to-fail-syndrome">The Set-Up-To-Fail
Syndrome</a>.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
Of course there are many things a company can do to
strengthen their performance management process, such as aligning individual
performance objectives to their strategy and business plans, clearly
communicating performance objectives and associated accountabilities and
expectations, insisting on regular performance evaluation and feedback
sessions, and holding managers accountable for making it all work. But that may
not be enough according to Sylvia Vorhauser-Smith, who in a 2013 Forbes <a href="http://www.forbes.com/sites/sylviavorhausersmith/2012/12/16/the-new-face-of-performance-management-trading-annual-reviews-for-agile-management/">article</a> wondered
“Is there any organizational practice more broken than performance management?”
Her take: </div>
<div class="MsoNormal">
</div>
<ul>
<li>Everyone
hates it – employees and managers alike</li>
<li>Nobody
does it well – it’s a skill that seemingly fails to be acquired despite
exhaustive training efforts, and</li>
<li>It
fails the test of construct validity – it doesn’t do what it was designed
to do, i.e. increase performance</li>
</ul>
<br />
<div class="MsoNormal">
Her solution? Shift the performance focus from process
to outcomes, burn the forms, replace them with dashboards and performance heat
maps, and embrace an agile work environment in which: </div>
<div class="MsoNormal">
<br /></div>
<ul style="margin-top: 0in;" type="disc">
<li>You
will set dynamic goals and adjust them in response to change</li>
<li>Your
manager will provide just-in-time coaching wherever you are</li>
<li>Skills
and knowledge you need will be recommended and streamed to you</li>
<li>Your
performance journal will continuously capture and cluster feedback, ideas
and suggestions from your peers and customers</li>
<li>Your
formal annual performance review will be permanently deleted from your
calendar</li>
<li>You
will finally be in a position to manage your own career<b> </b></li>
</ul>
I imagine the man and the dog would be thrilled to see
Vorhauser-Smith’s approach implemented at the factory-of-the-future,
particularly that part about eliminating formal annual performance reviews. But
even if that doesn’t happen, they might want to improve their chances of
success by asking the boss to adopt a more enlightened performance expectation
communication and feedback approach. And if the boss demurs? Maybe they
could get Jack Welch, whose feelings about performance appraisal ambushes are <a href="https://blog.kissmetrics.com/winning-and-profitability/">well known</a>,
to have a chat with the boss. Considering past quotes from Welch, it
might go something like this:<br /><div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i><u><b>Jack:</b></u> </i>“When you become a leader success is
all about growing others.” <o:p></o:p></div>
<div class="MsoNormal">
<i><u><b>The Boss</b></u>: </i>“OK…”<o:p></o:p></div>
<div class="MsoNormal">
<i><u><b>Jack</b>:</u> </i>“You have no right to be a leader if
someone who works for you doesn’t know where they stand.”<o:p></o:p></div>
<div class="MsoNormal">
<i><u><b>The Boss</b></u>: </i>“Ouch. Sounds like you are questioning my suitability for this role.”<o:p></o:p></div>
<div class="MsoNormal">
<i><u><b>Jack</b></u>: </i>“Control your destiny or someone else will.”<o:p></o:p></div>
<div class="MsoNormal">
<i><u><b>The Boss</b></u>: </i>“Got it.”<o:p></o:p></div>
<div class="MsoNormal">
<i><br /></i></div>
<div class="MsoNormal">
Jack’s too busy to have that conversation with the Boss, of
course, but the model is so simple and obvious that even the Boss’s Boss could
probably deliver the message:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
If you want your employees to perform at their best,
you need to do four things:<o:p></o:p></div>
<div class="MsoNormal">
</div>
<ul>
<li>Communicate what you want them to do and
confirm their understanding</li>
<li>Use measures of performance and success that
are well-designed, explicit and understood</li>
<li>Give them the resources and support they need
to succeed</li>
<li>Provide them with appropriate guidance and
feedback so they can produce the best results</li>
</ul>
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The good news is that this model works well for humans and dogs. If
factory-of-the-future expands and eventually hires a cat, however, they’ll
probably need to modify this approach since cats are generally not too
interested in guidance or feedback.<o:p></o:p></div>
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<i> Dean K. Harring, CPCU, CIC is a retired insurance
executive who now spends his time as an advisor, board member, educator and
animal portrait artist. He can be reached at dean.harring@gmail.com or
through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a><i>.</i></div>
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claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-86198256163549486802015-03-18T09:54:00.000-04:002015-03-18T09:54:41.591-04:00Magical Thinking <br />
Remember that TV <a href="http://www.ispot.tv/ad/75o1/budweiser-basement">commercial</a> where a wide-eyed guy's favorite football team scores every time he goes into his basement to get more beer, so he concludes he has "cracked the code," leaves his friends and goes down into the scary basement one more time "for the win"? That spot depicted a form of magical thinking, which according to psychologists Leonard Zusne and Warren Jones in <a href="http://www.amazon.com/Anomalistic-Psychology-Study-Magical-Thinking/dp/0805805087">Anomalistic Psychology: A Study of Magical Thinking</a> involves believing "that one's thoughts, words, or actions can achieve specific physical effects in a manner not governed by the principles of ordinary transmission of energy or information." <br />
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Magical thinking is a normal dimension of thinking in young children, of course. Toddlers routinely make illogical and unsound decisions--they just don't have enough information about the world yet to form more reasonable conclusions (more on that topic <a href="http://www.scholastic.com/teachers/article/ages-stages-how-children-use-magical-thinking">here</a>.) At around age seven or eight most children begin to think logically and are better able to grasp cause and effect relationships, so they move away from magical thinking. <br />
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Yet magical thinking lives on in many adults--sports fans, athletes, coaches, gamblers, sailors, politicians and even business executives. Think of all the people you know who regularly engage in <a href="http://www.scientificamerican.com/article/why-rituals-work/">superstitious rituals</a>-- following lucky routines, wearing lucky items of clothing, carefully avoiding any behavior or circumstance that might curse or jinx an undertaking or outcome. While such rituals might be irrational, they are not generally harmful and some experts even consider them to be <a href="http://www.nytimes.com/2012/04/08/opinion/sunday/in-defense-of-superstition.html?_r=0">potentially beneficial</a>. Perhaps that's why the tagline for the beer commercial described earlier offered viewers this subtle reassurance: <br />
<blockquote>
“It's Only Weird if it Doesn't Work”</blockquote>
O course there is a darker side of <a href="http://medical-dictionary.thefreedictionary.com/magical+thinking">magical thinking</a> that can be problematic, particularly in business. It has roots in <a href="http://www.sowhatireallymeant.com/articles/personality-traits/narcissism/">narcissism</a> and can involve delusional thinking fueled by an unrealistic or underdeveloped understanding of causes and effects. Unfortunately, since <a href="http://onlinelibrary.wiley.com/doi/10.1111/peps.12072/epdf">experts</a> believe we're <a href="http://www.businessinsider.com/signs-youre-a-narcissist-2014-4">"more likely to find a narcissist in the C-Suite than on the street"</a> it follows that we're also more likely to find magical thinking in the C-Suite. <br />
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Here's the problem: a business leader with even mild <a href="http://www.bpdcentral.com/narcissistic-disorder/hallmarks-of-npd/">narcissistic </a>tendencies can be a <a href="https://hbr.org/2014/01/why-we-love-narcissists">compelling and disruptive leadership force</a> even when he or she hasn't the slightest knowledge or understanding of the dynamics, the causes and effects, that shape a particular situation. Such leaders come across as supremely certain, energetic, decisive, strategic, visionary--even charming and charismatic in the short term. But they have a big blind spot: when they are in unfamiliar territory, they are incapable of recognizing and acknowledging their own ignorance or lack of understanding. They are <a href="http://claimsmatters.blogspot.com/2014/11/confident-idiots.html">confident</a>, but not competent. Sadly, when they don't have the requisite information (or understanding, or knowledge) to make logical and sound decisions, they fall back into magical thinking--just like toddlers do. So their decisions are informed and driven by biases, superstitions, fantasies and faulty logic rather than by facts and evidence-based thinking. <br />
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I worked with a CEO years ago who was, among other things, a rip-roaring magical thinker. One of his more peculiar blind spots involved strategy. He categorically refused to even discuss the topic (he called it the S-word) and he would behave even more scornfully and abusively than he normally did if someone dared to bring it up. He made his magic belief mindset clear--if people just did their jobs, the company would flourish, so it was foolish to waste time thinking or talking or worrying about something as unimportant as the S-word. <br />
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I was reminded of that CEO (let's call him S-word CEO) the other day while listening to an <a href="https://hbr.org/2014/10/does-your-sales-team-know-your-strategy/">HBR Ideacast</a> featuring Harvard Business School professor <a href="http://www.hbs.edu/faculty/Pages/profile.aspx?facId=126057">Frank Cespedes</a>, author of <a href="https://hbr.org/2014/10/putting-sales-at-the-center-of-strategy/ar/1?referral=00134">Putting Sales at the Center of Strategy</a>. He was describing how companies often have a vision, or a mission, but they don't have a coherent strategy--because they have failed to make "explicit choices" about markets, customers, value propositions and competitive differentiators. Why is that important? Professor Cespedes: <br />
<blockquote>
"...it’s obviously difficult, if not impossible, for people to execute a strategy that doesn’t exist or that they don’t understand."</blockquote>
Cespedes went on to say that once a coherent strategy has been developed, it's vital for company leadership to ensure that the tasks and behaviors (plans and activities) performed by different company segments (Cespedes talked about Sales, but I took his comments to apply equally to all segments of a company) are focused on delivering value and helping to implement the strategy effectively. In other words, strategy should define the critical tasks and behaviors, not vice versa. Nothing very magical about that. <br />
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Well, that S-word CEO struggled with his biases and his fuzzy logic. He made more than his share of dubious decisions, and he caused some degree of harm and collateral damage in the process, but he was tenacious and persistent and he completed a multi-year run as CEO. As he walked out the door on his last day, I'm sure he was pleased with himself, and proud of how well he had steered the company during his tenure. What about his struggles, his setbacks, his ill-advised decisions, and the collateral damage he had caused? Not his problem. He accepted no accountability for anything that didn't work out well, since in his mind <a href="http://thenarcissisticlife.com/the-narcissist-blames-you/">someone else was always to blame</a>. <br />
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I've worked with many magical thinkers, but S-word CEO probably provided as vivid a demonstration as any I've ever seen of the power, and the wonder, of magical thinking in business. Maybe the beer commercial was spot on--maybe magical thinking <u>is</u> only weird if it doesn't work--and while it may not have worked for others within S-word CEO's sphere of influence, it sure worked for him! <br />
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<i>Dean K. Harring, CPCU, CIC is a retired insurance executive who now spends his time as an advisor, board member, educator and watercolor artist. He can be reached at dean.harring@gmail.com or through </i><a href="http://www.linkedin.com/in/deanharring/"><b>LinkedIn</b></a> <i>or</i> <a href="https://twitter.com/DeanHarring"><b>Twitter</b></a><i> or </i><a href="http://www.harringwatercolors.com/"><b>Harring Watercolors</b></a><i>.</i></div>
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claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-2511669258368385112015-02-18T08:32:00.002-05:002015-02-18T08:32:32.985-05:00The Trivialization of LinkedIn <br />
LinkedIn seemed like a good idea when it was introduced in 2003, at about the same time Friendster and MySpace were emerging as pioneering social networking sites. LinkedIn's promise was simple: <br />
<blockquote>
LinkedIn makes your professional network faster and more powerful. </blockquote>
Designed to serve as a networking resource for business people who wanted to connect with other professionals, it is still described today as Facebook for business professionals, even though Facebook didn't launch to the public until several years later in 2006. I was an early LinkedIn adopter (2005) and a regular user, delighted to put aside my Rolodex and replace it with a real time, automated network management tool. As a believer in the power of networking, I kept my profile up to date, joined interest groups, methodically established new connections and reconnected with former colleagues, classmates and business partners. Over the years my LinkedIn network expanded steadily, and it has proven to be a useful and helpful resource for me. I have also enjoyed tapping into my network to help folks find or fill jobs, to get information, and to introduce people who have similar business interests. <br />
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LinkedIn now has over 300 million users around the world and it has developed a certain gravitas, characterized in <a href="http://archive.fortune.com/2010/03/24/technology/linkedin_social_networking.fortune/index.htm">Fortune</a> by <a href="https://www.linkedin.com/in/jessihempel">Jessi Hempel</a> this way: . <br />
<blockquote>
Facebook is for fun. Tweets have a short shelf life. If you're serious about managing your career, the only social site that really matters is LinkedIn. In today's job market an invitation to "join my professional network" has become more obligatory -- and more useful -- than swapping business cards and churning out résumés.<b></b></blockquote>
LinkedIn founder Reid Hoffman <a href="http://blog.linkedin.com/2013/05/05/linkedin-turns-10/">blogged</a> about the company's mission on its 10th anniversary in 2013: <br />
<blockquote>
Ten years ago, I co-founded LinkedIn in my living room with the mission of connecting the world’s professionals to make them more productive and successful. Inspired by the invaluable role relationships played in our own careers, we launched LinkedIn with the tagline “Relationships matter.”</blockquote>
Google the question "What is LinkedIn?" and you'll get 928 million results, but right at the top is this <a href="https://www.linkedin.com/static?key=what_is_linkedin">one</a>:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs8XgMkdlVsUC1PO77NO9fA6TtlvKpD4TRsyclHYS6g7Dw_K-og5SKu7WiCjdEctc1AypQ_M3gpGQ8isQ2JJssI_C_TQMiVdkl5fquyaP6wJtIUaGAoHQgXyE5hlByzOwFekFmNC7K6vE/s1600/image002.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs8XgMkdlVsUC1PO77NO9fA6TtlvKpD4TRsyclHYS6g7Dw_K-og5SKu7WiCjdEctc1AypQ_M3gpGQ8isQ2JJssI_C_TQMiVdkl5fquyaP6wJtIUaGAoHQgXyE5hlByzOwFekFmNC7K6vE/s1600/image002.jpg" height="235" width="400" /></a></div>
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Unfortunately, I suspect it's the "Learn and share" capability on the right, which invited users to share news, inspirations and insight, that inadvertently instigated the trivialization of LinkedIn by enabling users who didn't appreciate the differences between Facebook and Twitter and LinkedIn to flood LinkedIn with annoying and inappropriate updates.<br />
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What is an annoying and inappropriate update? In the LinkedIn <a href="https://www.linkedin.com/legal/user-agreement">user agreement</a>, users promise to use LinkedIn in a "professional manner" and agree not to act dishonestly, or unprofessionally, or to post "inappropriate, inaccurate, or objectionable content." The terms aren't defined in the agreement so the definitions seem to be a matter of personal taste. While I happen to feel that math problems (99% of people fail to solve this...), holiday greetings, family vacation photos, silly slogans, word puzzles, recipes and goofy pictures all qualify as unprofessional and inappropriate, others obviously don't think so. For example, consider the individuals who posted the "insights" shown below and the hundreds of LinkedIn members who liked and commented favorably about them.<br />
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<a href="http://lh6.ggpht.com/-Z9SuFeoajJE/VOPB48vH3zI/AAAAAAAAW54/uQlLLG7s3ac/s1600-h/clip_image004%25255B3%25255D.jpg"><img alt="clip_image004" border="0" src="http://lh5.ggpht.com/-RA4ItxWeu3I/VOPB5bUog8I/AAAAAAAAW6A/0cfDr42e_dg/clip_image004_thumb.jpg?imgmax=800" height="216" style="background-image: none; border-bottom: 0px; border-left: 0px; border-right: 0px; border-top: 0px; display: inline; margin: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" title="clip_image004" width="216" /></a> <a href="http://lh5.ggpht.com/-qQj5Ex9XCkg/VOPB5xLGkTI/AAAAAAAAW6E/wlQ33uq9CkI/s1600-h/clip_image006%25255B3%25255D.jpg"><img alt="clip_image006" border="0" src="http://lh6.ggpht.com/-Bwi22kVR988/VOPB6BK-API/AAAAAAAAW6Q/fuBht6iAwoE/clip_image006_thumb.jpg?imgmax=800" height="224" style="background-image: none; border-bottom: 0px; border-left: 0px; border-right: 0px; border-top: 0px; display: inline; padding-left: 0px; padding-right: 0px; padding-top: 0px;" title="clip_image006" width="224" /></a></div>
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Of course LinkedIn contributes to the triviality by flogging inane and poorly written <a href="https://help.linkedin.com/app/answers/detail/a_id/1600/related/1">Pulse</a> articles, incessantly soliciting skill endorsements, and doing insensitive things like blasting out an announcement encouraging users to congratulate so-and-so on their new position each time a new position is added to his/her profile, even if that new "position" happens to read something like this<i>: Laid off and in transition--looking for new opportunities</i>. That's sad, but what's even sadder is how often so-and-so's connections dutifully pile on, offering their hearty congratulations on the new position. See Donna Sapolin's entertaining description of her experience with this LinkedIn feature <a href="http://www.nextavenue.org/blog/how-linkedin-thwarting-your-job-search">here</a>, and Stacy Zapar's energetic take on how users are ruining the LinkedIn news feed <a href="http://www.stacyzapar.com/2013/12/5-Ways-People-Are-Ruining-LinkedIn-News-Feed.html">here</a>. <br />
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What can you do to shield yourself from the trivialization of LinkedIn? Well, you could close your account, of course, or access it less frequently, or perhaps just ignore anything you find annoying. Right now I still believe LinkedIn's positives outweigh its negatives, so I do whatever I can to minimize my exposure to the negatives. Every time I see a post that strikes me as inappropriate or unprofessional, for example, I use LinkedIn's <a href="https://help.linkedin.com/app/answers/detail/a_id/13325/~/show-or-hide-updates-from-your-connections">hide</a> capability to block all further posts from that user, and that has helped to decrease the number of what I consider to be inappropriate and unprofessional posts on my home page. Getting rid of the annoying Pulse feature was trickier, since LinkedIn does not provide users with the option to remove the Pulse banner from their home page even though it appears many LinkedIn users would <a href="http://community.linkedin.com/questions/190911/how-to-turn-off-pulse.html">appreciate</a> having that option. The good news is that it is easy to use extensions like <a href="http://webapps.stackexchange.com/questions/57040/how-can-i-remove-the-pulse-news-feature-from-my-linkedin-homepage">AdBlock</a> or <a href="http://wildwomanfundraising.com/if-this-is-linkedin-get-me-outta-here/">Stylish</a> to quickly remove Pulse from your homepage. <br />
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For a folksy yet comprehensive view into the history of LinkedIn, take a look <a href="http://www.slideshare.net/linkedin/a-brief-history-of-linked-in">here</a>. If you are trying to grow your network on LinkedIn,by all means glance at my <a href="http://www.linkedin.com/in/deanharring/en">profile</a> and consider <a href="mailto:dean.harring@gmail.com">pinging</a> me if you would like to connect. I am happy to collaborate and help you network, and I promise you won't get a response anything like <a href="http://www.cnn.com/2014/02/27/tech/web/linked-in-cleveland-job-bank/">this</a>! <br />
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<i style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10pt;">Dean K. Harring, CPCU, CIC is a retired insurance executive who now spends his time as an advisor, educator and watercolor artist. He can be reached at dean.harring@gmail.com or through<span class="apple-converted-space"> </span></span></i><a href="http://www.linkedin.com/in/deanharring/" style="background-color: white; color: #6699cc; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px; text-decoration: none;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10pt; font-weight: normal;">LinkedIn</span></a><span class="apple-converted-space" style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10pt;"> </span></span><i style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10pt;">or</span></i><span class="apple-converted-space" style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10pt;"> </span></span><span style="background-color: white; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px; text-decoration: none;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10pt;"><a href="https://twitter.com/DeanHarring" style="background-color: white; color: #6699cc; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 14.8500003814697px; font-weight: normal; line-height: 20.7900009155273px; text-decoration: none;">Twitter</a><span style="color: #333333;"><i> or </i><span style="font-weight: normal;"><a href="http://www.harringwatercolors.com/">Harring Watercolors</a><i>.</i></span></span></span></span></div>
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<br />claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-41409483095615761542015-01-06T09:44:00.000-05:002015-01-06T09:44:04.408-05:00Vacation Risk Management<div class="Publishwithline">
<br />I grew up in Massachusetts, but I haven't been to Cape Cod
for ages, so I thought it might be fun to rent a vacation home on the Cape for
a week or two this summer. Using <a href="http://www.vrbo.com/">Vacation Rental by Owner (VRBO)</a>, I found a place that seemed to fit
the bill. I reached out to the owner
(let's call him Duke) to reserve the property, and Duke advised me all I needed
to do was sign and return his rental contract along with a 50% deposit and he
would mark it as rented. Simple enough, until I saw his rental contract.</div>
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Full disclosure here--I am one of those people who reads most
contracts before I sign them. I have a healthy respect for contracts, developed
initially during my claims training at Liberty Mutual and steadily strengthened throughout the forty years I spent in the insurance business.<span style="mso-spacerun: yes;"> </span>Maybe my life would be simpler if I could
just learn to smile and sign on the dotted line once I've been presented with a
"standard" contract, but I am not comfortable doing that. <span style="mso-spacerun: yes;"> </span>So I read most contracts.</div>
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Duke's Vacation Lease Agreement did look pretty standard, at
first, until I got to section 11, which opened with this declaration:</div>
<blockquote class="tr_bq" style="margin-left: .5in;">
<i style="mso-bidi-font-style: normal;">Tenant
waives any right to allege deficiency in the premises or to otherwise claim
that Owner or Owner's Representative has misrepresented the property.</i></blockquote>
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Since I wouldn't be seeing the property in person until July
when I arrived for vacation, it seemed a bit unreasonable for Duke to be asking
me to waive my rights to allege deficiency and/or misrepresentation now, but I
kept reading until I hit the showstopper two sentences later:</div>
<blockquote class="tr_bq" style="margin-left: .5in;">
<i style="mso-bidi-font-style: normal;">Tenant
will indemnify Owner's Representatives and the Owner for any injuries, accident(al)
or otherwise, that may be incurred or suffered upon the premises by tenant and guests
or anyone associated with tenant for any cause whatsoever during the term of
this contract <b style="mso-bidi-font-weight: normal;">even if caused by gross
negligence on the part of the owner.</b></i></blockquote>
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The <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">emphasis</i></b> in the last line above is
mine. Requiring a tenant to agree to reimburse the owner for any loss
associated with any injuries that might occur on the premises, even if those
injuries were caused by the owner's gross negligence, seemed to border on the outrageous.<span style="mso-spacerun: yes;"> </span><span style="background: white; color: black; mso-bidi-font-family: Arial;">Imagine Duke had been warned that his electrical
system was so old and poorly maintained that it represented an imminent fire
hazard, or that his house was at serious risk of collapse because of severe structural
termite damage, yet he failed to do the necessary repairs and continued to rent
it. Then imagine the house collapsed and/or burned and injured the tenants and
others in the house, who had no knowledge of the potential danger.<span style="mso-spacerun: yes;"> </span>According to Duke's Vacation Lease Agreement,
the tenant would be required to reimburse him for any sums Duke was required to
pay to the injured people.<span style="mso-spacerun: yes;"> </span>Somehow that
didn't seem fair, to say nothing of the probability that it's</span> against public policy, and might be
void and unenforceable, even in Massachusetts. Remember, gross negligence is distinctive,
since it embodies a materially greater lack of care than ordinary negligence.<span style="mso-spacerun: yes;"> </span>The <a href="http://dictionary.law.com/Default.aspx?selected=838">law.com</a> definition: </div>
<blockquote class="tr_bq" style="margin-left: .5in;">
...<span style="background: white; color: black; mso-bidi-font-family: Arial;">carelessness which is in reckless disregard
for the safety or lives of others, and is so great it appears to be a conscious
violation of other people's rights to safety.</span></blockquote>
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<span style="background: white; color: black; mso-bidi-font-family: Arial;">So I wrote back to Duke and told him I wouldn't be able to
sign the Vacation Lease Agreement unless he was willing to tone down the
indemnification language. Duke responded immediately, saying he needed to keep
the language intact in order to:<o:p></o:p></span></div>
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<span style="background: white; color: black; mso-bidi-font-family: Arial;"><br /></span></div>
<blockquote class="tr_bq" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;">...add some shared responsibility onto otherwise
unconcerned and unattached weekly renters who we are entrusting with our very
expensive property.<span style="mso-spacerun: yes;"> </span></span></blockquote>
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<span style="background: white; color: black; mso-bidi-font-family: Arial;">Shared
responsibility? He also told me his rental contract was "very standard,
very boilerplate" and that no one had ever raised the issue I was raising
in the seven years he had been renting the property. That intrigued me, so I took
a look at the standard, boilerplate rental contracts available for owners who
list their properties on VRBO to use, but I couldn't find an indemnification
clause as broad and deep as Duke's.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;">Thinking<span style="mso-spacerun: yes;"> </span>that perhaps Duke wasn't familiar with the
concepts of indemnification, gross negligence and public policy, I wrote back
to him and outlined my concerns more fully.<span style="mso-spacerun: yes;">
</span>He responded that the risk/reward ratio in life isn't always equal, explaining:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<blockquote class="tr_bq" style="background: white; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="color: black; mso-bidi-font-family: "Segoe UI"; mso-fareast-font-family: "Times New Roman";">As it pertains to our house, 99% of our guests think that the
reward of spending time with family and friends in a great house, outweigh the
lack of recourse they may give up in a rental agreement that they sign.</span></blockquote>
<div class="MsoNormal" style="background: white; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="color: black; font-family: "Segoe UI","sans-serif"; font-size: 7.5pt; mso-fareast-font-family: "Times New Roman";"> </span><span style="background: white; color: black; mso-bidi-font-family: Arial;"> <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;">Why didn't 100%
of his guests think that way, I wondered, particularly since they couldn't
become guests unless they signed his contract?<span style="mso-spacerun: yes;">
</span>What about the other 1%? Did they disagree with the balance of risk and
reward but still sign the Vacation Lease Agreement? <span style="mso-spacerun: yes;"> </span>We'll never know, since I decided to end my
correspondence with Duke and make different vacation plans.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;">I did briefly wonder
whether Duke's tenants had actually read his Vacation Lease Agreement and fully
grasped the nature of the liability exposure they were assuming. Probably not. </span><a href="http://consumerist.com/2009/03/07/consumers-dont-read-contracts-even-ones-that-scream-danger-do-not-sign/"><span style="background: white; mso-bidi-font-family: Arial;">Most people</span></a><span style="background: white; color: black; mso-bidi-font-family: Arial;"> don't read
contracts, and of course the penalty for not reading and comprehending
potentially adverse contract clauses is zilch, unless and until something bad
happens and triggers those clauses. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;">Does it make sense to do a risk evaluation on something as mundane as a
vacation home rental?<span style="mso-spacerun: yes;"> </span>As a potential short
term vacation home tenant, do you really need to analyze the rental contract,
identify exposures, try to secure more favorable terms and conditions, and make
sure you have insurance coverage or other risk transfer mechanisms in place
that will protect you if things go wrong? </span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;"><br /></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="background: white; color: black; mso-bidi-font-family: Arial;">Since risk management is often
described as a process of identifying, assessing, and reducing risk to an
acceptable level, the answer depends upon the mindset you bring to the
transaction, your risk tolerance, whether you believe things might go wrong,
and your ability to deal with the financial consequences if they do go wrong. I
decided to pass on Duke's house because I didn't like his attitude or his
contract, so for me the potential risk associated with signing the contract was
greater than the reward.<span style="mso-spacerun: yes;"> </span></span>But <a href="https://its.law.nyu.edu/facultyprofiles/profile.cfm?personID=27875"><span style="background: white;">Florencia Marotta-Wurgler</span></a><span style="background: white; color: black;">, a professor of law at New York
University,<span class="apple-converted-space"> says people usually don't change
their behavior simply because of what's in a contract. <span style="mso-spacerun: yes;"> </span></span></span><span style="background: white; color: black; mso-bidi-font-family: Arial;">I</span><span class="apple-converted-space"><span style="background: white; color: black;">n </span></span><span style="background: white; mso-bidi-font-family: Arial;">Alina Tugend's article </span><a href="http://www.nytimes.com/2013/07/13/your-money/novel-length-contracts-online-and-what-they-say.html?pagewanted=all&_r=0"><i style="mso-bidi-font-style: normal;">Those Wordy Contracts We All So Quickly
Accept</i></a>, Marotta-Wurgler explains why:<span style="background: white; color: black; mso-bidi-font-family: Arial;"><o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<blockquote class="tr_bq" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="background: white; color: black;">For the most part it <i style="mso-bidi-font-style: normal;">[what's in
the contract]</i> doesn’t matter. Things don’t usually go wrong — except when
they do. And then it matters.</span></blockquote>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
I know one thing for certain, however. <span style="mso-spacerun: yes;"> </span>Once a
contract matters, it really matters, and suddenly everybody wants to read it. </div>
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<br /></div>
<w:sdt contentlocked="t" id="89512093" sdtgroup="t"><span style="font-family: "Calibri","sans-serif"; font-size: 1.0pt; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;"><w:sdtpr></w:sdtpr><w:sdt docpart="B91B968988D94D00997BD2D6CF3F135D" id="89512082" storeitemid="X_E3F9C168-E330-43C5-A45F-93BE63B40C68" text="t" title="Post Title" xpath="/ns0:BlogPostInfo/ns0:PostTitle"></w:sdt></span>
</w:sdt>
<br />
<div class="MsoNormal">
<i><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer
and an expert and advisor on property casualty insurance claims and
operations. He can be reached at dean.harring@theclm.org or through<span class="apple-converted-space"> </span></span></i><a href="http://www.linkedin.com/in/deanharring/"><b><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">LinkedIn</span></b></a><span class="apple-converted-space"><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;"> </span></span><i><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">or</span></i><span class="apple-converted-space"><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;"> </span></span><a href="https://twitter.com/DeanHarring"><b><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">Twitter</span></b></a><i><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">.</span></i></div>
claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-36682503733779429982014-12-14T11:43:00.002-05:002014-12-15T06:59:39.299-05:00Tick Tock: 30 Seconds to Connect<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
Somehow it feels thrilling and frightening at the same time, like when you
stand too close to the edge of a cliff. Your heart starts thumping, the air
passages to your lungs expand, your blood pressure increases, the pupils in your
eyes enlarge, and your blood glucose levels fluctuate, all because the
stress-triggered hormone adrenaline is flooding your bloodstream. Your body is
preparing to deal with a nerve-racking, physically demanding situation, all
because inside the packed convention center ballroom you have just been
introduced as the next speaker. You stride purposefully to the podium; the
applause dies down and the room goes silent with anticipation. You take a deep
breath and look out at the audience. They look back at you--curious, and
expectant. You are on the verge of doing something that most humans fear more
than <a href="http://www.psychologytoday.com/blog/the-real-story-risk/201211/the-thing-we-fear-more-death">death</a>:
public speaking.
<br />
<br />
Not long after I graduated from college and started working, I enrolled in
the <a href="http://www.dalecarnegie.com/events/dale_carnegie_course/">Dale
Carnegie Course in Effective Speaking and Human Relations</a>. I had heard
tremendous things about the program and I really wanted to become one of those
people who was always ready, willing and able to stand up and speak when
necessary, no matter what the situation. At the first Dale Carnegie session,
there were people in the class who were so terrified of speaking in front of an
audience that they could not even stand alone at the front of the room. At the
end of the course three months later, the instructor could barely get those same
people to stop speaking and sit back down! I learned a lot in that course by
delivering two or three talks a week (often on topics assigned just minutes
before), getting feedback, and giving feedback. In the years since I've spent a
large part of my working life delivering, listening to and critiquing
presentations. So when I work with students now to help them become more
effective presenters, I always share this Dale Carnegie quote with them:
<br />
<blockquote>
A talk is a voyage with purpose, and it must be charted. The man who starts
out going nowhere generally gets there.</blockquote>
Almost anyone can conquer their fear of public speaking with appropriate
coaching and practice, but conquering the fear doesn't necessarily make you a
good speaker--it just makes you a more comfortable speaker. If you haven't
framed your message, polished your content, and planned your delivery carefully
you might be able to blather long enough to fill your time slot, but you'll end
up nowhere, as in no audience connection and no message delivered.
<br />
<br />
Years ago, folks weren't too concerned about messaging during the opening of
a talk. The prevailing wisdom was that audiences didn't really hear anything a
speaker said at the beginning because they were too busy processing the
speaker's non-verbal signals: facial expressions, gaze and eye contact,
clothing, haircut, shoes, posture, gestures, etc. So since the audience wasn't
listening anyway, speakers were encouraged to use that time to get comfortable
at the podium, smile, relax, maybe chatter a bit. You know--thank the person who
did the introduction, thank the meeting sponsor for the invitation, describe how
wonderful it is to be there, tell a joke, make witty comments about the weather,
or the travel challenges encountered on the way to the venue, or the local
sports team. Then, dive in to the speech.
<br />
<br />
That chatty style of opening is still being used (I saw two speakers use it
last week, with predictable results) but I think it is fair to say that it
probably worked better 20 years ago than it does now. Back then, audiences were
usually captive, they seemed to have longer attention spans, and they certainly
didn't have what <a href="http://www.learningsolutionsmag.com/authors/74/carmen-taran">Dr. Carmen
Taran</a> of Rexi Media calls "digital pacifiers" in their pockets (or on their
wrists) capable of providing them with a dizzying array of distracting
alternatives to listening to the speaker.
<br />
<br />
If you believe, as I do, that audiences today are <a href="http://claimsmatters.blogspot.com/2014/05/if-you-have-to-explain-it-its-not.html">ruthlessly
inattentive</a> victims of information overload, then as a speaker with a
message to communicate, you must do something to capture their attention
quickly, within 30 seconds according to the experts (check out <a href="http://www.learningsolutionsmag.com/articles/1161/book-review-better-beginnings-by-carmen-taran">Better
Beginnings</a> by Carmen Taran and <a href="http://www.forbes.com/sites/nickmorgan/2012/08/23/the-best-way-to-start-a-presentation/">The
Best Way to Start a Presentation</a> by Nick Morgan.) Sounds difficult, but it
really isn't--good speakers do it all the time. Television <a href="http://www.nj.com/super-bowl/index.ssf/2014/02/top_10_super_bowl_ads_all-time.html">commercial</a>
producers routinely do it to sell products and services. Writers do it by
inserting intriguing first lines in <a href="http://americanbookreview.org/100bestlines.asp">novels</a> and <a href="http://goodcontentcompany.com/start-article-killer-opening-line">articles</a>
to get you to keep reading.
<br />
<br />
Let's break it down. If you think of a talk as having three phases--opening,
body, and conclusion--in a 20 minute talk the opening might be 3 minutes, the
body 15 minutes, and the closing 2 minutes. So in the first three minutes, a
speaker needs to accomplish three things:
<br />
<blockquote>
1. Hook the audience within 30 seconds. Grab their attention, engage and
enroll them in what you are about to do.
<br />
2. Lay out your approach and establish your credentials. What do you want the
audience to know, do and feel at the end of your talk? How and why are you
qualified to talk on this topic?
<br />
3. Provide a compelling answer to the audience's unspoken question: Why
should I listen to you, and if I do, what is in it for me?</blockquote>
Next time you prepare to give a talk, focus on energizing the first 30
seconds of your opening. The best way to do that is to supercharge the
communication environment by pushing or luring listeners out of their comfort
zone and into their learning zone. Surprise the audience somehow, throw them
off balance, interrupt their inertia. Replace the expected with the unexpected.
Create suspense and drama. Open with a provocative question or quote. Make an
outrageous statement. Tell a powerful personal story. Share your view on a
controversial aspect of your topic and ask for a show of hands of those who
agree, or disagree. Do a show and tell with a compelling object, photo, news
story or statistic. Challenge a widely held belief, or a sacred cow. Make a bold
prediction and tell the audience to write it down. Or even offer the audience
something helpful and irresistible, as Amy Cuddy did in the opening line of her
extremely popular (22 million views) <a href="https://www.ted.com/talks/amy_cuddy_your_body_language_shapes_who_you_are">TED
Talk</a> on body language.
<br />
<br />
For other potentially useful details and examples, check out these
resources:<b></b>
<br />
<ul>
<li>· <b><a href="http://www.genardmethod.com/blog-detail/view/137/grab-your-audience-12-foolproof-ways-to-open-a-speech#.VIcyRDHF98F">How
to Start a Speech--12 Foolproof Ways to Grab Your Audience!</a></b> by Dr. Gary
Genard<b></b></li>
<li>· <b><a href="https://www.americanexpress.com/us/small-business/openforum/articles/hook-presentation-audience-30-seconds/">12
Ways to Hook an Audience in 30 Seconds</a></b> by Bruna Martinuzzi<b></b></li>
<li>· <b><a href="http://www.presentationzen.com/presentationzen/2010/10/start-your-presentation-with-punch.html">Start
Your Presentation with PUNCH</a></b> by Garr Reynolds<b></b></li>
<li>· <b><a href="https://alexrister1.wordpress.com/2011/09/19/advice-6-ways-to-hook-your-audience/">6
Ways to Hook Your Audience</a></b> by Alex Rister<b></b></li>
<li>· <b><a href="http://www.inc.com/peter-economy/the-30-second-rule-how-to-create-unforgettable-presentations.html">The
30-Second Rule: How to Create Unforgettable Presentations</a></b> by Peter
Economy<b></b></li>
</ul>
Finally, since capturing an audience's attention is one challenge, and
holding it is another, you might also enjoy speech and presentation coach <a href="http://www.inc.com/author/sims-wyeth">Sims Wyeth's</a> brief <a href="http://www.inc.com/sims-wyeth/how-to-capture-and-hold-audience-attention.html">overview</a>
of techniques to help you keep the connection going.<b> </b><b></b>And never,
ever forget this practical speakers' maxim:
<br />
<b></b><b></b>
<br />
<blockquote>
Each of us here has a job to do.<i> </i>My job is to talk and yours is to
listen. The challenge is for me to finish my job before you have finished
yours<i>.</i></blockquote>
<br />
<i>Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert
and advisor on property casualty insurance claims and operations. He can be
reached at dean.harring@theclm.org or through</i><i> </i><b><a href="http://www.linkedin.com/in/deanharring/">LinkedIn</a></b> <i>or</i> <b><a href="https://twitter.com/DeanHarring">Twitter</a></b><i>.</i></div>
claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com1tag:blogger.com,1999:blog-4205943024394833441.post-57130612841600384002014-11-13T08:06:00.012-05:002021-10-27T10:17:16.898-04:00Confident Idiots<i>Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?</i> <br />
<i><br /></i>
Every time comedian <a href="http://en.wikipedia.org/wiki/George_Carlin">George Carlin</a> posed that question in a performance, the audience roared because they knew they were all absolutely guilty of being <u>at least</u> that judgmental when comparing the driving skills of others to their own. <a href="http://heatherlench.com/wp-content/uploads/2008/07/svenson.pdf">Studies</a> have shown that most drivers believe they are more skillful and more careful than the average driver on the road, but what's really fascinating is how that self-serving bias and illusion of superiority extends to many other areas. In his article <a href="http://www.psmag.com/navigation/health-and-behavior/confident-idiots-92793/"><i>We Are All Confident Idiots</i></a>, Psychology professor <a href="http://psych.cornell.edu/people/david-dunning">David Dunning</a> describes it this way: <br />
<blockquote>
A whole battery of studies conducted by myself and others have confirmed that people who don't know much about a given set of cognitive, technical or social skills tend to grossly overestimate their prowess and performance, whether it's grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, or financial knowledge.</blockquote>
Surprising? Hardly. You and I have known and worked with a formidable collection of confident idiots, and we've probably played the role ourselves on more than one occasion. We just didn't realize we were doing it. <br />
<br />
Professor Dunning is an expert in metacognition, the processes by which humans evaluate and regulate their knowledge, reasoning, and learning. He and his colleague <a href="http://kruger.socialpsychology.org/">Justin Kruger</a> first described what is now known as the <a href="http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect">Dunning-Kruger effect</a> in a 1999 paper entitled <i>Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments</i>. From the paper's introduction: <br />
<blockquote>
People tend to hold overly favorable views of their abilities in many social and intellectual domains. The authors suggest that this overestimation occurs, in part, because people who are unskilled in these domains suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it.</blockquote>
Dunning calls this "unrecognized ignorance". As he explains in the <a href="http://www.psmag.com/navigation/health-and-behavior/confident-idiots-92793/"><i>We Are All Confident Idiots</i></a> article: <br />
<blockquote>
For poor performers to recognize their ineptitude would require them to possess the very expertise they lack. To know how skilled or unskilled you are at using the rules of grammar, for instance, you must have a good working knowledge of those rules, an impossibility among the incompetent. Poor performers—and we are all poor performers at some things—fail to see the flaws in their thinking or the answers they lack. </blockquote>
While the notion that "we don't know what we don't know" seems reasonable and familiar, the scary part is that even though we might be incompetent to deal with a particular situation, we're not troubled because we are blissfully unaware of our incompetence. Even scarier, we usually feel pretty confident about our chances for dealing with the situation effectively. Dunning again: <br />
<blockquote>
What’s curious is that, in many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by <em>something </em>that feels to them like knowledge.</blockquote>
Blessed with inappropriate confidence? As much as we admire and react favorably to confidence and self-assurance, most of us wouldn't rely upon someone to do something important for us if we knew the person was confident, but not competent. Or would we? <br />
<br />
Overconfidence is very common. According to a <a href="http://youtu.be/WtjSCoq8pE4">TED Talk</a> by University College (London) professor <a href="http://www.drtomascp.com/about/">Tomas Chamorro-Premuzic</a>, who has studied the relationship between confidence and competence for over 10 years in 40 different countries, the distribution looks like this: <br />
<br />
<a href="http://lh5.ggpht.com/-6x9s0zfrEDU/VGSo7rMOwzI/AAAAAAAAWXE/EL1SHELtqQ0/s1600-h/clip_image002%25255B4%25255D.jpg"><img alt="clip_image002" border="0" height="259" src="http://lh6.ggpht.com/-vYdSFRN6DYM/VGSo8IWxdHI/AAAAAAAAWXM/-T9ziFSyKcw/clip_image002_thumb%25255B1%25255D.jpg?imgmax=800" style="border-bottom: 0px; border-color: initial; border-left: 0px; border-right: 0px; border-style: initial; border-top: 0px; border-width: 0px; display: block; float: none; margin-left: auto; margin-right: auto;" title="clip_image002" width="432" /></a> <br />
<br />
To make matters worse, in most parts of the world people equate confidence with competence, so they assume people who are confident are also competent, allowing confidence to mask incompetence. In the HBR Ideacast <a href="https://hbr.org/2014/07/the-dangers-of-confidence/"><i>The Dangers of Confidence</i></a> , <strong>Dr. Chamorro-Premuzic</strong> drew the distinction: <br />
<blockquote>
In reality however, there is a very big difference between confidence and competence. Competent people are generally confident, but confident people are generally not competent. They are just good at hiding their incompetence and their insecurities...</blockquote>
Yet success "correlates just as closely with confidence as it does with competence" according to <a href="http://www.theatlantic.com/features/archive/2014/04/the-confidence-gap/359815/"><i>The Confidence Gap</i></a> by Katty Kay and Claire Shipman. And men tend to be more confident than women. A few bullet point takeaways from the article: <br />
<ul>
<li>Having talent isn’t merely about being competent; confidence is a part of that talent. You have to have it to excel.</li>
<li>Confidence is... the factor that turns thoughts into judgments about what we are capable of, and that then transforms those judgments into action.</li>
<li>In studies, men overestimate their abilities and performance, and women underestimate both. </li>
<li>... there <i>is</i> a particular crisis for women—a vast confidence gap that separates the sexes.</li>
</ul>
So if talent <i>(the ability to do something well)</i> requires both confidence and competence, what do you call confidence without competence? <a href="http://aurora.dawn.com/2014/03/01/dr-shahid-qureshi/">Dr. Shahid Qureshi</a> calls it arrogance. Professor Chamorro-Premuzic is in the same camp. In <a href="http://edition.cnn.com/2014/10/23/business/opinion-low-confidence-success/"><i>Why Confidence Is Overrated</i></a> he describes the consequence of appointing leaders on the basis of confidence rather than competence: <br />
<blockquote>
...if we keep rewarding those who think highly of themselves, simply because they think highly of themselves, then we will always end up with incompetent charlatans in positions of power and influence.</blockquote>
So why is it that we keep bumping into incompetent charlatans and confident idiots in leadership positions? It's our fault! We like and admire people who are self-assured and confident, and we're not that troubled if they happen to be incompetent. Professor Chamorro-Premuzic in the HBR Ideacast, on why we find confident people so compelling: <br />
<blockquote>
I think there are two main reasons. So the first one is that confident people tend to be more charismatic, extroverted, and socially skilled– which in most cultures are highly desirable features. The second one is that in virtually every culture, and especially the Western world, we tend to equate confidence with competence. So we automatically assume that confident people are also more able-skilled or talented.</blockquote>
What can we do about it? Chamorro-Premuzic in <a href="http://edition.cnn.com/2014/10/23/business/opinion-low-confidence-success/"><i>Why Confidence is Overrated</i></a>: <br />
<blockquote>
When we hear people making claims about their talents, let's not assume that they are true, even if they are being honest (as a consequence of being self-deceived). Most talented people don't brag about themselves, and most of the self-promoters in the world are simply impostors.</blockquote>
You might be wondering whether talent plays any role in all this. I like to think that while your confidence may help you land a big job, sooner or later you need to perform and deliver in order to keep that job, so it's your talent (ability and results) that will ultimately determine your success. That may be the way it works on <a href="http://www.americanidol.com/">American Idol</a>, but of course it doesn't always work out that way in business. Just think of all of the incompetent and feckless executives you've known who succeeded in holding on to key positions for far too long simply because they had a talent for dodging accountability--creating diversions, making excuses, and shifting blame and responsibility to others. <br />
<br />
Confident idiots. I can just imagine Mark Twain scratching his head and marveling at their success as he scrawled this line: "To succeed in life, you need two things: ignorance and confidence." <br />
<br /><br /><div align="center"><i>Dean K. Harring, CPCU is a retired Chief Claims Officer who advises on property-casualty insurance claims and operations. He can be reached at dean.harring@suite200solutions.com or through </i> <a href="http://www.linkedin.com/in/deanharring/"><i>LinkedIn</i></a> </div>
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<br />claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-9140309748585899182014-10-30T14:19:00.001-04:002014-10-31T07:09:47.136-04:00UncertaintyI remember being taught, a long time ago, that if you can't describe something, you can't measure it, and if you can't measure it, you can't manage it. I have been fascinated by management metrics since then, and I still believe that if performance metrics are designed correctly and aligned with an organization's strategic objectives they will naturally encourage employees to behave such that those objectives are achieved (for more on this, see my 2005 article <a href="http://www.propertycasualty360.com/2005/08/18/keeping-score-efficiency-and-effectiveness-in-clai">Keeping Score</a> .) <br />
<br />
So when I came across the book <a href="http://www.amazon.com/Managing-Uncertainty-Strategies-Surviving-Turbulent/dp/111810319X">Managing Uncertainty</a> by Michel Syrett and Marion Devine, I had to look twice because the title troubled me. Uncertainty, of course, is the opposite of certainty--so being able to describe it well enough to measure it would seem to present an enormous challenge. According to the authors, while there is no precise, widely accepted definition of uncertainty, there are definite degrees of uncertainty. The book opens with a 2002 quote from <a href="http://www.amazon.com/Known-Unknown-Memoir-Donald-Rumsfeld/dp/159523084X">Donald Rumsfeld</a>: <br />
<blockquote>
There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are things we do not know. But there are also unknown unknowns--the ones we don't know we don't know.</blockquote>
Clear? One problem with planning (projects, strategy, risk or change management, financial, estate, etc.) is that we often use planning models that assume we can collect enough information about strengths, weaknesses, threats and opportunities to predict with acceptable certainty what challenges we will face during the plan period. Once the challenges are identified, we simply develop action items to address them, craft metrics to track performance against those items, assign accountability and put the plan in motion. But early in <a href="http://www.amazon.com/Managing-Uncertainty-Strategies-Surviving-Turbulent/dp/111810319X">Managing Uncertainty</a> the authors credit <a href="http://www.smu.edu.sg/smu/about/smu-leadership/messages/presidents-messages/presidents-profile">Arnoud De Meyer</a>, President of Singapore Management University, with identifying <a href="http://sloanreview.mit.edu/article/managing-project-uncertainty-from-variation-to-chaos/?use_credit=1c303b0eed3133200cf715285011b4e4">four types of uncertainty</a>: <br />
<ul>
<li>Variation--where small influences cannot be easily anticipated individually, but the resulting total impact can be identified and managed</li>
<li>Foreseen--where identifiable and understood variances may or may not occur</li>
<li>Unforeseen-- where an event's possibility is not recognized or its likelihood/probability is sharply discounted (<a href="http://www.waywordradio.org/unk_unk/">unk unks</a>)</li>
<li>Chaos--where unforeseen events invalidate the strategy</li>
</ul>
In their paper <i><a href="http://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=4506&context=lkcsb_research">On Uncertainty, Ambiguity, and Complexity in Project Management</a></i> , Professor De Meyer and colleagues Michael T. Pich and Christoph H. Loch suggest that projects (and other plans) can be expressed as equations or "payoff functions" that are dependent on two things: <br />
<ul>
<li>The state of the world </li>
<li>The choice of a sequence of actions</li>
</ul>
In other words, success in planning requires knowledge of the challenges presented by an operating environment, and the perspective to come up with appropriate action steps to deal with those challenges--although "adequacy of the available information" is critical to that success. In their words: “Inadequacy of information is caused either by events or causality being unknown <i>(ambiguity)</i>, or by an inability to evaluate the effects of actions because too many variables interact <i>(complexity)</i>.” The more inadequate the information, the more difficult it is to plan successfully. But since information inadequacy arises from a lack of awareness or a lack of understanding, there are techniques (centered around learning and selectionism) that can be used to improve planning in unforeseen uncertainty situations. For a few practical examples, take a look at <a href="http://www.cbsnews.com/news/three-tools-to-manage-uncertainty/"><i>Three Tools to Manage Uncertainty</i></a> by Kim Girard. <br />
<br />
All of this struck me as interesting and relevant because I could see an obvious parallel within the insurance industry, particularly with the processes and procedures insurance claims managers use to set loss cost reserves. Anyone responsible for setting loss cost reserves on claims deals with De Meyer's four types of uncertainty, and they have no choice but to grapple with the adequacy of information available to them. <br />
<br />
For example, when setting loss reserves on complex litigated claims that we believed were going to be tried to a verdict, we used to consider the likely verdict value (tied to damages, liability, venue, etc.) and modify it using a multiplier we called the "percentage chance of losing." So if the case had a verdict value of $500,000 and we had a 60% chance of losing, the reserve would be $300.000.<br />
<br />
Ambiguity and complexity routinely invalidated that approach, however, because even if we were confident in our predicted verdict value and the % chance of losing, the actual verdict would rarely match our loss reserve. But when we did things to reduce ambiguity and complexity, when we developed better information about the likely trial environment (the state of the world--jury research, verdict history, attorney qualifications, etc.) and when our resolution plans included the most appropriate and impactful sequence of actions prior to and during trial, we usually got better outcomes. <br />
<br />
I smiled when, in the course of thinking about this topic, I remembered situations during my career when I encountered individuals who were trying to manage uncertainty involving case or portfolio loss reserve adequacy in rather unorthodox ways. One claims officer "managed" reserve development by insisting on personally approving all reserve increases over $10,000, and he then moved very slowly on those requests. Another refused to improve any proposed reserve increase unless a corresponding and counterbalancing reserve decrease on another file was also submitted. A third incented his employees to minimize claim payouts each month, knowing that reserve adequacy for his environmental claim portfolio was determined based upon burn rate (number of years the reserve would last at current payment rates). A business unit leader, who was new to long tail lines and uncomfortable with the concept of prior year reserve development, insisted on sending teams of consultants out into the field offices to "fix" long tail line reserves. In the process he spooked the claims managers, artificially inflated case reserves and destroyed the reserve consistency that the actuaries relied upon to calculate ultimate loss exposures.<br />
<br />
But my most enduring memory involved the business unit leader who told his assembled claims management group in September one year that he was tired of prior year reserve development, and that he didn't want to see any more of it after the first of the year. I don't need to tell you what happened with loss reserves in the fourth quarter that year. <br />
<br />
All of which goes to show, I suppose, that some efforts to manage uncertainty end up creating even more uncertainty. <br />
<br />
<div align="center">
<i>Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert and advisor on property casualty insurance claims and operations. He can be reached at dean.harring@theclm.org or through </i><a href="http://www.linkedin.com/in/deanharring/"><i>LinkedIn</i></a><i> </i><i>or </i><a href="https://twitter.com/DeanHarring"><i>Twitter</i></a><i>.</i></div>
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<br />claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-66892879327036587192014-10-06T08:09:00.000-04:002014-10-06T08:10:24.930-04:00Bristling with Adaptive Capacity <br />
<h1>
</h1>
One of my favorite leadership books is <a href="http://www.amazon.com/Geeks-Geezers-Warren-G-Bennis/dp/1578515823">Geeks and Geezers</a>, by Warren G. Bennis and Robert J. Thomas, in part because the book introduced the notion of "adaptive capacity" in leaders: <br />
<blockquote>
... adaptive capacity is applied creativity. It is the ability to look at a problem or crisis and see an array of unconventional solutions.</blockquote>
According to Bennis and Thomas, adaptive capacity permits individuals to:<br />
<blockquote>
...confront unfamiliar situations with confidence and optimism. Those with well developed adaptive capacity are not paralyzed by fear or undermined by anxiety in difficult situations. They believe that if they leap, a net will appear--or, if it doesn't, they will be able to find or fashion one in time. Where others see only chaos and confusion, they see opportunity.</blockquote>
If you are in the insurance business, you know that good claims leaders absolutely bristle with adaptive capacity. Flexibility and resiliency are requisites for managing claims, and successful claims leaders find meaning and strength by grappling with the adversity and uncertainty they face every day. The best claims leaders also have the confidence and the will to get personally involved in contentious and difficult situations and creatively move them toward successful resolution. They embrace challenges, overcome obstacles, and learn and grow and become more confident as they go. In other words, they act a lot like Teddy Roosevelt!<br />
<br />
I was watching the Ken Burns documentary <a href="http://www.pbs.org/kenburns/films/the-roosevelts">The Roosevelts: An Intimate History</a> last week and I was reminded of a story I once read about the 1912 presidential campaign. Teddy Roosevelt had served two terms as president and had decided not to run again in 1908, so his Secretary of War and hand-picked successor William Howard Taft won the presidency. Teddy wasn't happy with Taft's term, however. He also missed the action and excitement of national politics, so he decided to challenge Taft and seek the Republican nomination for president in the 1912 election. He didn't secure the nomination, so he decided to run as a third-party candidate representing the new Progressive (also known as Bull Moose) party.<br />
<br />
It was an arduous campaign, raucous and hard fought. So intense and relentless that at one point Roosevelt was shot in the chest during a campaign appearance in Milwaukee, but went on to deliver a 90 minute speech before agreeing to go to the hospital. He was fighting an uphill battle with voters, and his campaign was running short of time and money, but his staff decided to push forward and print an elegant pamphlet with Teddy's photo on the cover for distribution to voters during the final round of whistle-stop tours.<br />
<br />
They had three million copies printed, but as they were readying the pamphlets for distribution someone noticed that Moffett Studios in Chicago held a copyright on the cover photo of Teddy. Unfortunately, no one had bothered to obtain permission from Moffett Studios to use the photo. The potential penalty for unauthorized use was staggering-- $1 per pamphlet, or $3 million. The campaign didn't have the time or funds necessary to reprint the pamphlets using another photo, and simply moving forward and incurring the penalty and bad publicity associated with using the photo without permission was not an option. Staff members knew they had no choice but to strike a deal with the photographer, but they hesitated because they believed their bargaining position was weak.<br />
<br />
Enter <a href="http://en.wikipedia.org/wiki/George_Walbridge_Perkins">George Perkins</a>, executive secretary of the Progressive Party and Roosevelt's campaign manager, who after being briefed on the situation took immediate action, sending this cable to Moffett:<br />
<blockquote>
We are planning to distribute millions of pamphlets with Teddy's photo on the cover. This will be great publicity for the studio who took the photo. How much will you pay us to use yours? Reply immediately.</blockquote>
Moffett replied immediately:<br />
<blockquote>
We've never done this before, but under the circumstances we'll offer you $250.</blockquote>
Problem solved!<br />
<br />
I have always enjoyed that story, and I've told it many times to illustrate what adaptive capacity looks like. While you might not agree with his approach to Moffett, Perkins was a successful businessman, a heavy hitter, well connected to financier J. P. Morgan, and he knew how to get things done. He had the ability to look at a problem and quickly come up with an unconventional yet brilliant solution, and in this situation he converted a $3 million exposure into a $250 revenue item rather handily. Adaptive capacity, personified! Of course Theodore Roosevelt himself could have served as an adaptive capacity poster boy--a charismatic leader who also happened to be a tireless and prolific writer, an innovator, a problem solver, an obstacle surmounter and an odds-defying achiever and adventurer. Take a look at what he accomplished during his remarkable life <a href="http://www.nps.gov/thro/historyculture/theodore-roosevelt-timeline.htm">here</a>.<br />
<br />
Well, the pamphlet got distributed as planned, but as we all know Woodrow Wilson went on to win the 1912 election with 42% of the votes, followed by Roosevelt at 27% and Taft at 23%. The Progressive party nominated Teddy as its presidential candidate again in 1916, but he refused the nomination and never got directly involved in politics again. Two and a half years later he died in his sleep at Sagamore Hill, his family home at Oyster Bay, NY.<br />
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<i>Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert and advisor on property casualty insurance claims and operations. He can be reached at dean.harring@theclm.org or through </i><a href="http://www.linkedin.com/in/deanharring/"><i>LinkedIn</i></a><i> </i><i>or </i><a href="https://twitter.com/DeanHarring"><i>Twitter</i></a><i>.</i></div>
claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-12124000009624490992014-09-24T07:25:00.001-04:002019-09-12T08:44:47.680-04:00Just How Difficult Are You?<i>You are without a doubt the most pretentious, self-absorbed, arrogant, vain and ruthless little tyrant I have ever had the misfortune of knowing. You are emotionally unbalanced and delusional. For some reason you believe you are special and entitled, demanding praise and attention and privileges you haven't earned and don't deserve--yet you are shamelessly uninterested in the needs and feelings of others. You exploit, criticize, scapegoat and treat others contemptuously, yet you can't tolerate a single word of criticism. There's only one way to describe you. You are:</i> <br />
<blockquote>
<blockquote class="tr_bq">
<div class="MsoNormal" style="background: white; margin: 0in 25.9pt 0.0001pt;">
<i>(a) A real jerk</i> <o:p></o:p></div>
<div class="MsoNormal" style="background: white; margin: 0in 25.9pt 0.0001pt;">
<i>(b) An infant</i> <o:p></o:p></div>
<div class="MsoNormal" style="background: white; margin: 0in 25.9pt 0.0001pt;">
<i>(c) A CEO</i> <o:p></o:p></div>
<div class="MsoNormal" style="background: white; margin: 0in 25.9pt 0.0001pt;">
<i>(d) A narcissist</i> <o:p></o:p></div>
<div class="MsoNormal" style="background: white; margin: 0in 25.9pt 0.0001pt;">
<i>(e) Other _______________</i></div>
</blockquote>
</blockquote>
People I ask seem to be able to identify, without hesitation or difficulty, somebody they know who fits this description, so they quickly and emphatically answer this multiple choice question. Corporate types tend to choose answers (a) or (c) although in the write-in category (e) the most common answer is "A real asshole" (more on this crass yet technical academic term later.) Politicians, lawyers and ex-spouses also get honorable mention in (e). Parents of young children, and students of Freud who have read <i>"On Narcissism"</i> (which introduces the concept of <i>His Majesty the Baby) </i>might choose (b). Psychology majors and anyone who has ever read a <a href="https://www.kirkusreviews.com/book-reviews/jeffrey-kluger/the-narcissist-next-door/">book</a> or an <a href="http://time.com/3153327/the-evolution-of-a-narcissist/">article</a> in Time Magazine by <a href="http://healthland.time.com/author/jkluger/">Jeffrey Kluger</a> tend to offer up the textbook answer (d), i.e., a person who behaves this way is usually described as a narcissist. <br />
Most of us know the story of Narcissus, retold succinctly in a New Yorker piece by <a href="http://www.newyorker.com/contributors/joan-acocella">Joan Acocella</a> called <a href="http://www.newyorker.com/magazine/2014/05/12/selfie"><i>Selfie</i>:</a> <br />
<blockquote>
In Book III of Ovid’s Metamorphoses, from the first century B.C., we meet Narcissus, a young man so handsome that all the nymphs are in love with him. He doesn’t understand why; he wishes they would leave him alone. One day, in the woods, he comes upon a pool of water and leans over to take a drink. In the reflection, he sees his face for the first time, and falls in love. He swoons, he kisses his image, but he cannot have the thing he desires. In despair, he stops eating, stops sleeping. Finally, he lays his head down on the greensward and dies. </blockquote>
There are longer and darker versions of the story, but the prevailing theme is that Narcissus is so taken with himself that he is incapable of paying attention to anything or anyone else. Narcissism is sometimes described as a "fixation with oneself" but the American Psychiatric Association actually classifies it as a <a href="http://www.dsm5.org/Documents/Personality%20Disorders%20Fact%20Sheet.pdf">personality disorder</a>. In <i>Selfie, </i>Acocella also tells us that according to the most recent edition of the <a href="http://www.dsm5.org/Pages/Default.aspx">Diagnostic and Statistical Manual of Mental Disorders</a> (DSM-V) the primary characteristic of narcissism is grandiosity: <br />
<blockquote>
Narcissists exaggerate their achievements and what they are certain will be their future triumphs. They believe that they are special and can be understood only by special people, of high status. They feel entitled to extraordinary privileges. (They have the right to cut in line, to dominate the conversation, etc.) They show no empathy for other people. They envy them, and believe that they are envied in return. They cannot tolerate criticism. </blockquote>
If you really want to dig into narcissism, there is no shortage of reading material out there. I recently read <a href="http://books.simonandschuster.com/Why-Is-It-Always-About-You/Sandy-Hotchkiss/9780743214285">Why Is It Always About You? The Seven Deadly Sins of Narcissism</a> by Sandy Hotchkiss. She describes seven categories of narcissistic behavior (Shamelessness, Magical Thinking, Arrogance, Envy, Entitlement, Exploitation, and Bad Boundaries) so well that if you read her book you might begin to feel a bit uneasy about your own narcissistic tendencies. The good news is that if you worry about such things you probably aren't really a narcissist, but just to be sure you can take a quiz <a href="http://time.com/3136687/narcissist-quiz/">here</a>. It is the <a href="http://en.wikipedia.org/wiki/Narcissistic_Personality_Inventory">Narcissistic Personality Inventory</a> developed by <a href="http://www.columbia.edu/~da358/npi16/raskin.pdf">Robert Raskin and Howard Terry</a> of the University of California, Berkeley. I felt a little better after taking the quiz. <br />
<br />
Of course the world is teeming with all kinds of people we perceive as difficult, not just narcissists but an eclectic assortment of know-it-alls, liars, cheaters, whiners, complainers, slackers, back-stabbers, perfectionists, illusionists, abusers, bullies, tormentors, mean-spirited rogues, and otherwise nasty weasels. <a href="http://www.amazon.com/Robert-I.-Sutton/e/B001H6J4DA/ref=ntt_dp_epwbk_0">Robert Sutton</a>, a professor at Stanford University, lumps them all into one descriptive category: assholes. His entertaining book <a href="http://www.amazon.com/exec/obidos/ASIN/0446698202/bobsutton-20">The No Asshole Rule: Building a Civilized Workplace and Surviving One that Isn't</a> establishes two tests for determining whether someone fits into that category: <br />
<ul>
<li>After talking to the alleged asshole, does the "target" feel oppressed, humiliated, de-energized, or belittled? Does he or she feel worse about him or herself? </li>
<li>Does the alleged asshole aim his or her venom at people who are less powerful rather than at those people who are more powerful? </li>
</ul>
Sutton also identifies twelve techniques assholes commonly use: <br />
<ul>
<li>Personal insults </li>
<li>Invading "personal territory" </li>
<li>Uninvited physical contact </li>
<li>Threats and intimidation </li>
<li>Sarcastic jokes and teasing, used as insult delivery systems </li>
<li>Withering email flames </li>
<li>Status slaps, intended to humiliate victims </li>
<li>Public shaming </li>
<li>Rude interruptions </li>
<li>Two-faced attacks </li>
<li>Treating people as if they are invisible </li>
</ul>
Any of this sound familiar? Of course it does. I hear you, and I feel your pain! I can think of dozens of people I've worked with just in the past ten years who fit quite comfortably into this category. Sutton reminds us that even Steve Jobs, celebrated for his ability to imagine, inspire, motivate and create, was notorious for <a href="http://www.businessinsider.com/steve-jobs-jerk-2011-10?op=1">behaving poorly</a> and routinely used many of these techniques. But while most of us have such tendencies and may slip into poor behavior patterns on occasion, there's a big difference between what he calls "temporary" and "certified" assholes: to qualify as "certified" you have to behave poorly persistently. If you want to see where you fit on the scale, take Sutton's <a href="http://bobsutton.typepad.com/my_weblog/2009/02/the-asshole-rating-selfexam-arse-over-180000-completions.html">Asshole Rating Self Exam</a> (<i>ARSE</i>, of course...would you expect anything else?) <a href="http://electricpulp.com/guykawasaki/arse/">here</a>, but steel yourself: if your self-rating score gets to a certain level, you will see this admonition from Sutton: <br />
<blockquote>
<i>You sound like a full-blown certified asshole to me, get help immediately. But, please, don't come to me for help, as I would rather not meet you.</i> </blockquote>
Good luck, and be careful out there. <br />
<br />
<div align="center">
<i>Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert and advisor on property-casualty insurance claims and operations. He can be reached at dean.harring@theclm.org or through </i><a href="http://www.linkedin.com/in/deanharring/"><i>LinkedIn</i></a><i> or </i><a href="https://twitter.com/DeanHarring"><i>Twitter</i></a><i>.</i> </div>
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<br />claims mattershttp://www.blogger.com/profile/17559480036209738928noreply@blogger.com0tag:blogger.com,1999:blog-4205943024394833441.post-25505785277571947602014-09-08T13:22:00.000-04:002014-09-09T06:19:06.359-04:00Digital Destruction and Big Bang Disruption<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">My wife is a project manager who
is responsible for business operations at our local high school. She hired some
people this summer to process and distribute new textbooks within the school,
but they hadn't finished the job and school was about to open, so she needed
someone to come in at the last minute and help get the work done. More
specifically, someone who would follow her instructions and would not expect to
get paid. So I spent a long Saturday with her at the school, schlepping pallets
and boxes of new textbooks to the classrooms, getting everything in place in
time for the start of the new school year.</span><span style="font-size: 11pt;"><o:p></o:p></span></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;"><br />
I wasn't happy with the work (the school was hot, the textbooks heavy) and more
than once I thought wistfully about Steve Jobs, who according to biographer<span class="apple-converted-space"> </span><a href="http://www.amazon.com/Walter-Isaacson/e/B000APFLB8/ref=dp_byline_cont_book_1">Walter
Isaacson</a>, had targeted the school textbook business as an "$8 billion
a year industry ripe for digital destruction." Targeting textbooks seemed
like a good idea to me because not only are they big and heavy and
expensive--they don't update easily, either. Unfortunately, Jobs didn't live
long enough to disrupt the textbook industry, but others are on the same path
and, selfishly, I wish them well! Check out<span class="apple-converted-space"> </span><a href="http://chronicle.com/article/Dont-Call-Them-Textbooks/136835/">The Object
Formerly Known As The Textbook</a><span class="apple-converted-space"><i> </i></span>for
an interesting look at how textbook publishers and software companies and
educational institutions are juggling for position as textbooks evolve into
courseware. Also,<span class="apple-converted-space"> </span><a href="http://neatoday.org/2013/07/31/as-more-schools-embrace-tablets-do-textbooks-have-a-fighting-chance/">As
More Schools Embrace Tablets, Do Textbooks Have a Fighting Chance?</a><span class="apple-converted-space"> </span>takes a look at how The Los Angeles
Unified School District—second largest school district in the country—is
equipping students with iPads and delivering textbooks digitally in a
partnership with giant book publisher<span class="apple-converted-space"> </span><a href="http://www.technologyreview.com/news/506361/the-education-giant-adapts/">Pearson</a>.</span><span style="font-size: 11pt;"><o:p></o:p></span></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;"><br />
Harvard professor<span class="apple-converted-space"> </span><a href="http://www.claytonchristensen.com/biography/">Clayton Christensen</a>,
author of<span class="apple-converted-space"> </span><a href="http://www.claytonchristensen.com/books/the-innovators-dilemma/">The
Innovator's Dilemma</a>, is credited with coming up with the term
"disruptive innovation," which he defined as:<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">...a process by which a product or service takes root initially in
simple applications at the bottom of a market and then relentlessly moves up
market, eventually displacing established competitors.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">These
days we tend to associate disruptive innovation with a new or improved product
or service that surprises the market, especially established, industry-leading
competitors, and increases customer accessibility while lowering costs. The
notion is appealing, and it makes for exciting business adventure tales
featuring scrappy, innovative underdogs overcoming entrenched, clueless market
leaders. Of course disruptive innovation has been happening for a long time,
even if it was called something else, but lately technology has made it easier
and cheaper for<span class="apple-converted-space"> </span><a href="http://mashable.com/2011/10/09/7-disruptive-innovations/">upstart firms</a><span class="apple-converted-space"> </span>to take on industries they think are
"ripe for digital destruction."</span><span style="font-size: 11pt;"><o:p></o:p></span></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;"><br />
In her recent article<span class="apple-converted-space"> </span><a href="http://www.newyorker.com/magazine/2014/06/23/the-disruption-machine">The
Disruption Machine</a>, Harvard professor and New Yorker staff writer<span class="apple-converted-space"> </span><a href="http://scholar.harvard.edu/jlepore">Jill Lepore</a><span class="apple-converted-space"> </span>squinted hard at disruption theory,
though:<o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">Ever since “The Innovator’s Dilemma,” everyone is either
disrupting or being disrupted. There are disruption consultants, disruption
conferences, and disruption seminars. This fall, the University of Southern
California is opening a new program: “The degree is in disruption,” the
university announced.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">By the
way, USC's<span class="apple-converted-space"> </span><a href="http://iovine-young-apply.usc.edu/trojan-family-magazine/">Jimmy Iovine
and Andre Young Academy for Arts, Technology and the Business of Innovation</a><span class="apple-converted-space"> </span>is in fact opening this year and will
focus on critical thinking with plans, according to the Academy<span class="apple-converted-space"> </span><a href="http://iovine-young-apply.usc.edu/">website</a>, to "...empower the
next generation of disruptors and professional thought leaders who will ply
their skills in a global area." And yes, that is Dr. Dre's name on the
Academy!</span><span style="font-size: 11pt;"><o:p></o:p></span></div>
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<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">But there
are others who believe we have now entered a decidedly more treacherous
innovation environment, one that Josh Linkner in<span class="apple-converted-space"> </span><a href="http://joshlinkner.com/the-road-to-reinvention/?cc_success=1">The Road to
Reinvention</a><span class="apple-converted-space"> </span>says is forcing
companies to systematically and continually challenge and reinvent themselves
in order to survive. His fundamental question is this: "Will you disrupt,
or be disrupted?" And Paul Nunes and Larry Downes, Accenture folks<span class="apple-converted-space"> </span><span style="font-family: "Arial","sans-serif";">who
wrote an article for the Harvard Business Review Magazine in 2013</span><span class="apple-converted-space"><i> </i></span>entitled<span class="apple-converted-space"> </span><a href="http://hbr.org/2013/03/big-bang-disruption/">Big Bang Disruption</a><span class="apple-converted-space"> </span>(they have a new<span class="apple-converted-space"> </span><a href="http://www.amazon.com/Big-Bang-Disruption-Devastating-Innovation/dp/1591846900/ref=sr_1_1?ie=UTF8&qid=1371604916&sr=8-1&keywords=%22big+bang+disruption%22">book</a><span class="apple-converted-space"> </span>on the same topic, summarized by
Accenture<span class="apple-converted-space"> </span><a href="http://www.accenture.com/SiteCollectionDocuments/us-en/landing-pages/customermarkets/Big-Bang-Disruption.pdf">here</a>)
warn of a new type of innovation which is more than disruptive--it's
devastating:<o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">...a Big Bang Disruptor is both better and cheaper from the moment
of creation. Using new technologies...Big Bang Disruptors can destabilize
mature industries in record time, leaving incumbents and their supply-chain
partners dazed and devastated.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">Should
CEOs be worried? When Mikhail Gorbachev visited Harvard in 2007 and said “If
you don’t move forward, sooner or later you begin to move backward”, he was
talking about politics and multilateral nuclear treaties, not companies, but
the warning certainly could have been directed at company CEOs. That message,
refreshed to incorporate the disruptive and big bang innovation threats that
have emerged since then, seems a bit unsettling: If you run a company and you
aren't dedicating resources to continually scanning the marketplace for threats
and improving and reinventing your business, if you are instead taking a
"business as usual" approach, you are at risk of being marginalized
or supplanted by competitors who will bring new products, services, experiences,
efficiencies, cost structures and insights to your customers. Maybe not this
year, or next year, but sometime soon. It's not a question of whether it will
happen, but when. Thus<span class="apple-converted-space"> </span><a href="http://joshlinkner.com/">Linkner's</a><span class="apple-converted-space"> </span>question,
restated: Will you disrupt yourself, or be disrupted by someone else?</span><span style="font-size: 11pt;"><o:p></o:p></span></div>
<div style="margin: 0in 0in 0.0001pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;"><br />
Of course some industries, like property casualty insurance, may not be high on
anyone's "ripe for digital destruction" list, so maybe there's no
need for insurance company CEOs to worry. Except perhaps about<span class="apple-converted-space"> </span><a href="http://techcrunch.com/2014/06/21/will-google-enter-the-insurance-industry/">Google</a><span class="apple-converted-space"> </span>and<span class="apple-converted-space"> </span><a href="http://insurancethoughtleadership.com/can-amazon-dominate-in-insurance-too/#sthash.buM5NFMW.dpbs">Amazon</a>.
I keep thinking back to Blockbuster CEO Jim Keyes' comments to<span class="apple-converted-space"> </span><a href="http://www.fool.com/investing/general/2008/12/10/blockbuster-ceo-has-answers.aspx">The
Motley Fool</a><span class="apple-converted-space"> </span>in 2008:
"Neither RedBox nor Netflix are even on the radar screen in terms of
competition." You know the rest of the<span class="apple-converted-space"> </span><a href="http://www.bloomberg.com/news/2010-09-23/blockbuster-video-rental-chain-files-for-bankruptcy-protection.html">story</a>,
which illustrates the real-life consequences of an incumbent underestimating
and then becoming "dazed and devastated" by a competitor.</span><span style="font-size: 11pt;"><o:p></o:p></span></div>
<div style="margin: 0in 0in 0.0001pt;">
<br /></div>
<br />
<div align="center" style="margin-bottom: .0001pt; margin: 0in; text-align: center;">
<i><span style="font-size: 10pt;">Dean K. Harrring, CPCU, CIC is a retired
Chief Claims Officer and an expert and advisor on property casualty insurance
claims and operations. He can be reached at dean.harring@theclm.org or
through <a href="http://www.linkedin.com/in/deanharring/">LinkedIn</a><span class="apple-converted-space"> </span>or<span class="apple-converted-space"> </span><a href="https://twitter.com/DeanHarring">Twitter</a>.</span></i><span style="font-size: 13.5pt;"><o:p></o:p></span></div>
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