The Consultants Your Boss Hired Are Here to See You...

If you are running an insurance claims operation, and your boss or the board brings in outside consulting experts to evaluate it, chances are you have a problem. Not just the problem the consultants are being called in to examine, but a pricklier, more personal problem--a perception problem. Someone with some clout in your organization apparently doesn't believe you are capable of doing whatever it is the consultants are going to be doing.

That puts you in a tricky situation, one that demands thoughtful action. First of all, don't try to convince your boss or the board that you are an expert and that you don't need outside assistance to handle the situation. Don't waste time arguing that your training and years of experience managing claims qualify you for the challenge. Do understand that the decision has already gone the other way, and any attempt you make to reverse it looks like resistance, concealment, perhaps even cluelessness.

Think about it. If you argue that there is no problem, or the problem is outside of claims, or that every claims operation has the same problem, you risk being classified as stubborn, change averse, and overly comfortable with the status quo. If you protest that you have already diagnosed the problem and designed a solution, realize that others don't see it that way. They want another opinion, another perspective. Maybe they don't like your plan, or perhaps it conflicts with some other course of action they want to pursue. It could be they don't quite know what the problem is, but there's something troublesome in the loss numbers, and they want to understand why it is happening and what to do about it. Or, worst case for you, they might just be looking for evidence and justification for overhauling your organization and/or escorting you out the door.

The reason really doesn't matter, but your response does. As activist and author Jerry Rubin once said: "The power to define the situation is the ultimate power." You have the power to assist in framing the inquiry and shaping the outcome by being visible and playing an active, cooperative role with the experts during the engagement. Take advantage of that power.

First, welcome the consultants and make arrangements to provide them with whatever help and information they need. Brief them fully on your organization, your strategy, and your operating procedures. Impress them with the dashboards and controls you use to manage risks and results. Talk to them about process efficiency, effectiveness, and loss cost management techniques. Show them how you establish and monitor key performance indicators and how you interact and communicate with your stakeholders. Demonstrate how you identify and incorporate best practices in your claims handling processes. If some of the consultants lack industry knowledge and have no background in claims--don't be dismayed. Instead, patiently take the time to make sure they fully grasp how your company functions and how your operation contributes to results. In other words, do whatever you can to provide the experts with plenty of evidence supporting the proposition that when it comes to running an insurance claims operation: 1) you know what to do, 2) you know how to do it, and 3) you are doing it, quite well.

The consultants' job is to identify performance gaps and root causes, and propose actions to close those gaps. Your objective should be to provide them with the information, the insights and the support they need to do that job well. People who hire consultants usually believe the consultants will bring very high levels of knowledge, objectivity, credibility and perceptiveness to the engagement. While that belief might not always be accurate, the reality is that consultants' findings are accepted as authoritative in most cases. That means their recommendations will impact you and your organization, so it makes sense for you to invest your time and effort into framing the inquiry and shaping the outcome. Give it your best shot--you might even learn something in the process.

The downside is that in tricky, prickly situations like this there is no guarantee things will turn out well even if you do everything right. Sometimes there are hidden operating agendas, foregone conclusions and predetermined outcomes underlying the consulting engagement, and unless you know about those factors going in, there's not much you can do to manage their impact.

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 LinkedIn

A Bias for Action

You have probably seen at least one variation of this quote about people, often attributed to Mary Kay Ash:

"There are four types of people in this world. There are people that make things happen. There are people that watch things happen. There are people that wonder what happened. And there are people that don’t know anything happened.”

While most people chuckle when they read it, they tend to do so while mentally slotting themselves into the “people who make things happen” group, not into the watcher, wonderer or clueless groups.  Nothing surprising about that, I suppose.  It reflects our ideal of American ingenuity: clever and decisive and achievement oriented, where deeds matter more than intentions or plans. But let’s be practical for a minute–if everyone in an organization is busy making things happen all the time,  a few people should probably be watching what is happening to make sure it is constructive and coordinated.

I worked with a company a while back that prided itself on its behavior-based culture, a culture in which people who made things happen were the most rewarded and valued employees. While certain other management behaviors were encouraged, everybody knew the most important behavior involved taking action and making things happen. Action was more important than outcomes or impact since the evaluation lens was focused on activity, not results. So inevitably some people did things that never should have been done just to demonstrate their decisiveness and propensity for taking action, and that created an uncomfortable dynamic within the organization.  At one extreme we had the “just do it” people–who had no patience (or aptitude) for planning or analysis.  They loved to invoke Herb Kelleher, the founder of Southwest Airlines (“We have a strategic plan. It’s called doing things.”) and Tom Peters (“Good managers have a bias for action.”)  At the other extreme we had the risk management purists, people who were unwilling to move forward with anything until all risk scenarios and potential outcomes had been thoroughly analyzed. This group jubilantly broadcasted the details of failed “just do it” projects so everyone could understand that they cost more than advertised and/or failed to produce the benefits expected. It was a distracting, conflict-ridden muddle.

Around that time I was reading a biography of Napoleon Bonaparte and came across this quote attributed to him:

“Take time to deliberate; but when the time for action arrives, stop thinking and go in.”

Napoleon was a writer, a thinker, a planner and a reformer, but he is remembered chiefly as one of the greatest military commanders of all time.  He believed in preparation and planning, of course, but he was an action-oriented leader with a solid track record of defeating armies larger and better resourced than his own.  What fascinated me about this provocative quote was Napoleon’s implication that in decision making there is an explicit time for action, and that when that time arrives it is recognizable.

So I started talking with managers about the relationship between planning (preparing to act) and acting (taking action).  Those prone to taking action relied on instinct and gut feelings, sometimes informed and sometimes uninformed.  Those who were reluctant to act struggled to determine when it was time to shift from preparation to action.  Unlike Napoleon, they didn’t trust their instincts so they weren’t confident they would be able to recognize when the time for action had arrived. Since they were reluctant to launch until they reached that optimal action date, it was just easier and safer to continue fine-tuning their plans instead.

I think claims managers produce better outcomes when they operate with a bias for action.  Teaching managers to plan more effectively may be easier than teaching them to stop procrastinating and take action, but both are doable.  What’s critical is a shift in attitude and perception so that the manager is able to view planning and preparation as valuable only to the extent they enable actions and results.  In other words, it’s not all about planning, or all about taking action, it’s about planning well enough to take action to produce the desired results.

Making decisions with a bias for action can be transformational,  but it requires preparation, courage and a willingness to take risks.  And if things don’t work out as planned?  Do an after-action review and learn something from it.  Actions, not intentions, produce results, so sooner or later you have to take a shot.  Hockey great Wayne Gretzky, a player who had an obvious bias for action, said it well:   “You miss 100% of the shots you don’t take.”

 Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert and advisor on Property Casualty claims and operations. He can be reached at dean.harring@gmail.com or through www.linkedin.com/in/deanharring/