Are You A Magnet For Talent?
There’s a talent crisis looming. Your best assets walk out the door every night, and you need leaders to help steer and guide the company through these unprecedented times.
Unless you’ve been asleep at the wheel, you know that the insurance industry is going through massive change and facing unprecedented, profound challenges from capital requirements, technology, investments, expense pressure and underwriting profits. The pressure for expedited results and change has never been greater.
What can help guide you through these unchartered waters?
Great leaders who can stand up to these challenges and not be afraid—leaders who can propose creative solutions and be innovative, all while gaining the respect of those around them. This is the insurance industry, where enthusiasm, innovation and creativity flourish.
Oh, right, this is the insurance industry. Not to be too harsh, but insurance, being a risk mitigation business, has historically attracted those who personally are risk averse. This has been an inherently great risk management model.
However, that history is still being written, and the insurance industry has never faced the convergence of all these challenges at once. How many times have you heard that “this industry will never change”? But I think that’s yesterday’s news. Change is here.
Ours is a human capital asset-based business, and the only way a company can meet these new and unique demands is with great talent. The problem is there is a talent crisis looming. No need to cite studies. Everyone has gray hair—or to quote a friend, “no hair.” Some of the best and most experienced talent is ready to retire.
Look around. Don’t you wonder where the next generation of leaders will come from? Can you afford to have your burgeoning talent—arguably your company’s most valuable asset—exit faster than it’s coming in?
You can’t stop the exodus that is happening because of retirement, but can you keep and attract the next generation of leaders? How do you keep leaders from leaving your company, or conversely, how do you attract them? Why does joining up with the next new startup operation seem to offer a clearer career path to the C-suite? Is it all about money? Is it something else?
The Cultural Pull
Some companies like to think that money will buy and keep talent. It is true that a big enough check typically can get or keep someone—but not forever. Valued more than money is company culture and being given an opportunity to contribute, thus building and being responsible for your own results.
There are several companies that come to mind, but most notable was American International Group under Hank Greenberg. AIG was a talent-recruiting machine. If you were one of those executives recruited in the early years, you know you weren’t enticed by the money. AIG was one of the lowest entry-level compensation schemes in the industry.
You were enticed by the opportunity to be part of a very unique culture. If you worked hard and were successful, there was a carrot that everyone strived for—the Starr Partnership.
Furthermore, you either fit or you didn’t at AIG, and that was okay. Those who stayed were bound by the culture, and those who left recognized the need for a different environment.
The single greatest reason talented professionals walk out the door and across the street is for “opportunity”—perceived or real.
What about succession planning and company culture?
The two topics aren’t obviously conjoined, but if you ask most executives why they walk out the door permanently, the answer is often a derivative of one or the other. If you have a formalized succession plan, then those executives who have been identified as potential successors know who they are and are biding their time to be in a position to ascend.
The question often becomes that of timing and how long an executive is willing to wait. If it’s a horse race, once one executive ascends, the likelihood that the others will walk out the door is very high. Succession planning isn’t just identifying talent; it’s an ongoing exercise in managing expectations.
The succession waiting game is very difficult in insurance. It doesn’t matter where someone started his or her career—whether it was in an underwriting or functional silo—his or her self-worth was defined early. And in the early days of someone’s insurance career, progression meant increasingly more responsibility. But where does someone go after becoming a VP or SVP?
The succession plan states that should your boss either leave or retire, the movement for you is up.
Do you remember when you started in this business and thought 50 was old? You were bright, energetic and ready to take on the world. Now 60 is the new 50. And guess what? Those Gen X, Y and Z’s think 60 is really, really old. A common sentiment is, “I’m just too young to have my career cut off.”
Biding time when you are ready to make the next step is the single greatest career frustration.
The choice is clear: Assess internal options, such as moving to a different discipline, or think about changing companies.
Should I Stay Or Should I Go?
Often, the only internal option is to move out of your silo. A company will often see this as a great opportunity, but view this through the eyes of the one assessing his or her career options. You’ve become the expert in your discipline and built great relationships. Do you continue to invest in what you know the most or take a chance that might not work out in a new discipline? Does the move increase or decrease your value?
While you are assessing options, there is a company down the street interested in creating a new business that is your passion—where you will be highly valued for your expertise.
This is the typical conundrum for most. It is indeed challenging, but at the end of the day those that move do so because the culture did not bind them.
Great cultures are built by great leaders who are magnets for talent. Those leaders inherently understand people like themselves who are driven to succeed. They have the ability to set the foundation for success and share a compelling vision that others gravitate toward.
I think the insurance industry often confuses great managers with great leaders, but we need both. Great managers in underwriting and claims are worth their weight in gold. However, the distinction is as follows: You can have a successful company with great leadership and without great managers. You cannot, however, have a successful company of great managers without great leadership.
The reason why is the talent. Talent will move. Talent is attracted to and recognizes great leadership. And talent will walk out the door either to have the opportunity to lead or to follow a great leader.
There are occasions when we get feedback that a candidate loves the company and the vision of the CEO, but the interview with the “hiring manager” went flat. To my earlier point, the culture is defined by the leadership; attracting great talent becomes to a certain extent a self-fulfilling prophesy if a leader is hiring. Conversely, if you are not attracting the talent you think you need, you might want to review who you have doing the hiring.
One final point. Those that easily attract talent view the interview process as a marketing opportunity. They view the process as an opportunity to “sell” the candidate first, and then evaluate qualifications. The goal is to have everyone want to work for the company, thus giving that company the luxury to pick and choose the talent desired.
In listening to a series of recent investor calls, I found a consistent expectation that in the not-too-distant future the industry will be defined by winners and losers. If this is the case, you can be certain that the winners will be defined by those with great leadership and great talent.