Speaking Up

“Don't expect to make a difference unless you speak up for yourself.” -- Laurie Halse Anderson

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?

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.

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 here), but we all have the ability to choose to respond to any situation by behaving in one of four ways:

• Passively (letting it slide)
• Passive-aggressively (muttering to ourselves or others)
• Aggressively (criticizing, blaming or attacking)
• Assertively (standing up for our rights appropriately and respectfully.)

What’s more, most of us use all of these styles at one time or another.

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 attribution bias, which means we tend to attribute the behavior of other people to something personal about them rather than to something about their situation. In Crucial Conversations, Kerry Patterson described it this way:

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.

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 more common in individualistic cultures, so if you are reading this in the US there’s a good chance your default behavior involves blaming the person, not the situation.

Psychologist Robert Plutchik 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 value and belief systems 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 US and UK)

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 The Assertiveness Workbook, 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:

Forthright, positive, insistence on the recognition of one's rights.

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 choose their battles realistically before moving forward.

According to the Mayo Clinic, behaving assertively can help you:

• Gain self-confidence and self-esteem
• Understand and recognize your feelings
• Earn respect from others
• Improve communication

It takes courage to assert yourself, but there’s a very simple but effective formula for assertive communication that frames up around these talking points:

• When you (describe the other person’s action or the event of concern in a purely factual way)
• I feel/I felt (describe your own feelings in response to the above action or event – for example, sad, angry, hurt, frustrated)
• Because (describe your interpretation of the event and the reason why you feel the way you do)
• What I would like in the future is or what I would prefer is (offer a future alternative that better meets your needs whilst not infringing on the needs/rights of the other person).

So to a line cutter you might say something like:

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.

How will the line cutter respond? Research 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:

Never argue with a fool, onlookers may not be able to tell the difference.

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.

By the way, if you are ever confronted with a “chat and cut” situation, this Larry David clip could be helpful, but try not to behave like this guy. And since queue jumping is a global phenomenon, you might enjoy reading about the queue reality in the UK, queuing in Europe, and effective line cutting defenses in China.


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 LinkedIn or Twitter or Harring Watercolors

Leaders and Servants

“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 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.

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.

“What exactly are you concerned about?” I asked.

“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.”

Of course, he had done some research and discovered Robert K. Greenleaf, who launched the modern servant leadership movement in 1970 when he published The Servant as Leader. 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.

“Imagine that—30 years in this business and now I am supposed to report to my employees? That’s ridiculous.”

He had another commitment, so we agreed to get together later that day to talk further. Curious, I pulled up the Greenleaf Center for Servant Leadership site:

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.

Larry Spears, CEO of the Greenleaf Center for Servant Leadership, identified ten servant leader characteristics:

• Listening
• Empathy
• Healing
• Awareness
• Persuasion
• Conceptualization
• Foresight
• Stewardship
• Commitment to personal growth
• Building Community

Dr. Kent Keith, the former CEO of the Greenleaf Center, offered a definition of servant leadership that includes this explanation:

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.

Nothing particularly nettlesome so far, but what about the inverted pyramid?

Ken Blanchard, in Servant Leadership Revisited, 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.

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.

Finally, we looked at the Oxford Dictionary definitions of servant:

• A person who performs duties for others, especially a person employed in a house on domestic duties or as a personal attendant.
• A person employed in the service of a government. 
• A devoted and helpful follower or supporter

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.

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.

“We’ll see,” he said. “Unfortunate choice of terms, though. Why couldn’t they have called it something less provocative?”

“Ask the consultants,” I suggested.



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 LinkedIn or Twitter or Harring Watercolors

Slackers and Social Loafers: "Playing" the Team Players

America 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 taught that teams inevitably generate better outcomes than individuals do.
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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.

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 identifies five characteristics that make a team player great:

1. Always reliable
2. Communicates with confidence
3. Does more than asked
4. Adapts quickly and easily
5. Displays genuine commitment

Seems obvious, but think of your most recent team experiences—were your team members behaving that way? Were you? Not likely, and J. Richard Hackman, a former Professor of Social and Organizational Psychology at Harvard University and a leading expert on teams, knows why. When interviewed by Diane Coutou for a 2009 Harvard Business Review article (Why Teams Don’t Work) he said:

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. 

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 Leading Teams, said that teams require to perform effectively:

1. Teams must be real. People have to know who is on the team and who is not. It’s the leader’s job to make that clear.
2. Teams need a compelling direction. 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.
3. Teams need enabling structures. Teams that have poorly designed tasks, the wrong number or mix of members, or fuzzy and unenforced norms of conduct invariably get into trouble.
4. Teams need a supportive organization. The organizational context—including the reward system, the human resource system, and the information system—must facilitate teamwork.
5. Teams need expert coaching. 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.

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 social loafing (or slacking) and it describes the tendency of some members of a work group to exert less effort than they would when working alone. Kent Faught, Associate Professor of Management at the Frank D. Hickingbotham School of Business, argues in his paper 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 and complete the project successfully:

…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.

This problem isn’t new. Max Ringelmann, 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 Joshua Kennon, 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:

• The more people you put into a group, the less individual effort each person will contribute
• 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

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:

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)

• Ask/Tell the slacker to commit to the project and start contributing (40%)
• Report the slacker to the project sponsor (3%)
• Complain about the slacker to other team members (10%)
• Work harder to pick up the slack and ensure the project is successful (30%)
• Follow the slacker’s lead and reduce your commitment and effort (0%)
• Other (17%--most respondents who chose this reported they would employ more than one of the listed strategies)

How effective is the response you identified above?

• Solves the problem (27%)
• Partially solves the problem (53%)
• Fails to solve the problem (17%)
• Causes other problems (3%)

Respondents who took some action (talking to the slacker, or reporting the slacker to the project sponsor) 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.
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 Crucial Conversations: Tools for Talking When Stakes Are High:

93% of employees report they have co-workers who don't pull their weight, but only one in 10 confronts lackluster colleagues.

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 peer review process to help group members hold each other accountable.)

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 study 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 gTeams exercise, described by Julia Rozovsky of Google People Operations as:

…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.

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.

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.


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 LinkedIn or Twitter or Harring Watercolors

Two Heads Are Better Than One...Right?

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.

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 Politics, described it this way:

…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.

But that’s not necessarily how it works in all groups, as anyone who has ever served on a committee and witnessed groupthink in action can probably testify.

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 Cass Sunstein, Harvard Law School professor and author (with Reid Hastie) of Wiser: Getting Beyond Groupthink to Make Groups Smarter. 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.

Researcher Julie A. Minson, co-author (with Jennifer S. Mueller) of The Cost of Collaboration: Why Joint Decision Making Exacerbates Rejection of Outside Information 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:

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.

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 You Know More than You Think observed that while crowds are not always wise, they are more likely to be wise when two principles are followed:

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. 

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:

• A diverse pool of people
• Who have different life experiences
• Who are willing to listen to the evidence
• Who are willing to listen to each other
• Who act independently
• Who refuse to be silenced

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 12 Angry Men--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.

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 Dr. Bahador Bahrami of the Institute of Cognitive Neuroscience at University College London, author of Optically Interacting Minds. He observed:

To come to an optimal joint decision, individuals must share information with each other and, importantly, weigh that information by its reliability 

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 Making Dumb Groups Smarter, Sunstein and Hastie suggest that botched informational signals and reputational pressures are to blame:

Groups err for two main reasons. The first involves informational signals. 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 reputational pressures, 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.

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 make groups wiser is “Silence the Leader.”

So exactly how do botched informational signals and reputational pressures lead groups into making poor decisions? Sunstein and Hastie again:

• Groups do not merely fail to correct the errors of their members; they amplify them.
• They fall victim to cascade effects, as group members follow the statements and actions of those who spoke or acted first.
• They become polarized, taking up positions more extreme than those they held before deliberations.
• They focus on what everybody knows already—and thus don’t take into account critical information that only one or a few people have.

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 The Monkey Wrench Game 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:

One man alone can be pretty dumb sometimes, but for real bona fide stupidity, there ain't nothin' can beat teamwork. 

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 LinkedIn or Twitter or Harring Watercolors

What Got You Here Won't Get You There

 
That’s the catchy title of a 2007 book by Dr. Marshall Goldsmith, an award winning author, business thought leader, professor and executive coach who heads the Marshall Goldsmith Group of consultants (mission: to help successful leaders get even better) and maintains the free Marshall Goldsmith Library. He has written and/or edited 35 books, mostly about leadership, learning, change and personal improvement. I found a copy of this book at a library sale recently, and I recommend it, but that’s just background.

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.

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.

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:

• They celebrate, relax, and begin to suffer from the “complacent lethargy” that Jim Collins and Jerry I. Porras (Built to Last) called the “We’ve Arrived Syndrome”
• 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.

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.

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: strategic, governance and control, and execution. 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 and a capable governance/risk management protocol in place to ensure long term success.

Successful companies tend to share certain characteristics:

• They have strategic clarity
• They have objectives and performance metrics that encourage behavior that supports their strategy
• Their rewards are aligned with achievement of those objectives and performance metrics
• They provide regular, constructive feedback to individuals regarding performance against objectives and metrics

Successful companies share certain capabilities:

• Talent (knowledge, skill and will)
• Speed (capacity for rapid, meaningful change)
• Learning (across silos and boundaries)
• Shared mindset (on the same page)
• Accountability (willingness to accept responsibility for behaviors and results)
• Collaboration (leveraging relationships, sharing work and responsibility)

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) and flip-charted the results. That’s an easy and quick exercise that often produces interesting insights into potential conflicts and barriers to success.

We also unpacked the three performance categories often associated with talent in a knowledge-intensive business: KNOWLEDGE, SKILL and WILL.

• In the claims service business, KNOWLEDGE 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.

• SKILL 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.

• WILL refers to the commitment, desire, discipline, or motivation to do something and do it well.

Finally, I urged them to accomplish four things in their meeting:

• 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.
• Complete a stakeholder needs analysis and develop a shared view of who their stakeholders are (potentially anyone with a vested interest in how well they operate their business) and what those stakeholders need in order to be successful and content.
• 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?
• 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.

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 article, attributed to German writer and politician Johann Wolfgang von Goethe (and also, variously, to Leonardo Da Vinci and Bruce Lee):

Knowing is not enough; we must apply. Being willing is not enough; we must do.

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.

For a thoughtful look at talent management in the 21^st century, check out this Harvard Business Review article from professor Peter Capelli. 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 Talent To Win whitepaper from PwC.


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 LinkedIn or Twitter or Harring Watercolors

Just the Facts

 
“Prejudice is a great time saver. You can form opinions without having to get the facts.” --E. B. White

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:

“That’s not an explanation, that’s an excuse.”

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 excuse:

An explanation designed to avoid or alleviate guilt or negative judgment

According to Jenise Harmon at PsychCentral, 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 confirmation bias enables us to focus on information that confirms our beliefs while we ignore contradictory information. Psychology expert Kendra Cherry describes it this way:

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.

Confirmation bias interferes not only with how we gather information, but also with how we interpret it, which helps explain the attitude polarization that often happens when people with dissimilar values and beliefs look at the same information and interpret it very differently. Experts 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 be right:

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.

In college I studied the natural sciences, so I learned to approach problems using the scientific method , an evidence-based technique to explain how and why things happen. The scientific method has three steps:

• Observe and collect data
• Analyze and develop a hypothesis
• Test and challenge the hypothesis

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.

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.

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.

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:

• No evidence of case level reserve overstatement
• No evidence of inappropriate loss payment inflation
• Some evidence that rates being charged were being discounted to levels significantly lower than planned
• Solid evidence that risk selection guidelines were not being followed consistently by underwriters

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.

To see more about the laws of social behavior, check out Richard Connif’s amusing article in the Smithsonian Magazine, and for a deeper look at the cognitive biases that interfere with rational decision making, check out this article by George Dvorsky. To understand how and why AIG has embraced evidence-based decision making, take a look at this HBR article. 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 Dragnet.

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 LinkedIn or Twitter or Harring Watercolors.

Clarity Affords Focus

I 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 (3 years now.) 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:  

• How to think and plan strategically
• How to identify and manage stakeholder relationships
• How to design and implement performance measures to support achievement of organizational objectives

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.

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 four things:

• Communicate performance expectations and confirm understanding
• Use measures of performance and success that are well-designed, explicit and understood
• Provide the resources and support they need to succeed
• Give appropriate guidance and feedback so they can produce the best results

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.
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:

Please rank the following claims performance categories in terms of their importance to you when evaluating the effectiveness of your claims operation.

• Claim loss cost management (average paid, leakage ratio, etc.)
• Claims expense management (allocated and unallocated)
• Claims productivity and throughput (closing ratio, cycle time, reopening ratio, aged pending)
• Customer satisfaction (premium paying customer)
• Agent/Broker satisfaction
• Internal stakeholder satisfaction (business units, underwriters, actuaries, etc.)
• Loss reserve adequacy, accuracy and timeliness
• Regulatory compliance (avoidance of fines, penalties, negative publicity and other unwelcome surprises)
• Employee engagement/satisfaction
• Claims fraud detection and mitigation

The weighted average results showed strong ranking alignment between the two groups:

Performance Category	Combined Group Rank	CEO/COO Rank	Chief Claims Officer Rank
Loss Cost Management	1	2	1
Expense Management	5	6	4
Productivity	4	4	5
Customer Satisfaction	3	3	3
Agent/Broker Satisfaction	8	7	8
Internal Stakeholder Satisfaction	10	10	10
Loss Reserve Adequacy, Accuracy and Timeliness	2	1	2
Regulatory Compliance	7	5	7
Employee Engagement	6	8	6
Claims Fraud Detection and Mitigation	9	9	9

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 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.)

What’s the takeaway? Thomas J. Leonard probably put it best: “Clarity affords focus.” 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.

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 here.

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 LinkedIn or Twitter or Harring Watercolors.