Other parts of this series:
Insurance veteran & leadership coach Don Bailey shares three impediments to leadership in the industry, the mindset and skillset of effective leadership—and why insurance needs high-performing leaders today.
- The insurance industry faces three impediments to leadership: one, an annuity-based business model that provides a false sense of comfort in the business; two, several decades of acceptable results in the industry; and three, the industry’s collective ego that inhibits change.
- Leadership is equally valuable throughout an organization, from entry-level positions to the C-suite.
- Technology is going to redefine the insurance industry over the next decade, and leaders should invest their time where the puck is going.
- Insurance faces three main challenges going ahead: data, digital and alternative capital. On the flip side, leadership could help create better outcomes.
Leadership in insurance, with Don Bailey
Over the course of the Accenture Insurance Influencers podcast, we’ve looked at how technology is changing insurance, what insurtech founders have discovered about the industry, and what incumbent insurers should consider as we enter a new decade.
For the next two episodes, we take a step back to look at a fundamental capability that can help insurers navigate this new decade: leadership. We talk to Don Bailey, a seasoned veteran of the insurance industry who now runs a leadership development firm.
In this episode, we focus Don’s sights on the insurance industry in particular, and why leadership is so needed today. If you like this episode, be sure to check back in two weeks as we take a broader look at what helps—and hinders—leadership in individuals and organizations.
The following transcript has been edited for length and clarity.
Welcome back to the podcast. I’m your host, Eagranie Yuh, and my guest today is Don Bailey. Don’s a partner at Bristlecone, a coaching, consulting, and leadership development firm. Previously he was president of global sales for Marsh, president of Allstate B2B and the North American CEO for Willis.
Thanks for making the time to speak with me, Don.
Tell me about Bristlecone. What do you do?
Let’s start with the name because I think it’s relevant to what we do.
Bristlecone pines grow above tree line in eastern California. They can live to be 9000+ years old. And here’s the twist: They only live that long if they have to endure harsh conditions. Rain, snow, wind, heat, cold. They thrive where most other plants can’t even grow. And why does that happen? They learn from the adversity. The roots, needles, bark, filtration systems, all get better from the adversity.
When we were starting the business, we loved that metaphor for people in organizations.
Bristlecone is a mouthful that makes for a challenging email address, but it’s right on point. Simply put, we are a coaching, consulting, and leadership development firm. And we created it a few years ago after I had come out of 30 years in the insurance experience that I’ve had over a few different firms.
Our skills are pretty unique in this space. You mentioned a few of my roles in the introduction. I’ve been an executive in four Fortune 250 firms, been in the C-suite of two of those, and all the quarterly earnings calls and everything that goes along with that.
I’ve got deep experience and a broad list of areas, from growth strategies to compliance programs to regulatory investigations, legal proceedings, technology installations, operational efficiency programs, human capital initiatives. All of this sometimes comprises multi billion-dollar P&Ls and five to ten thousand colleagues along the way. It’s global experience, 130 countries-plus in some of the roles that I’ve had. I’ve testified in front of Congress as an expert witness on terrorism, as well as conducted a number of acquisitions along the way.
So that’s a little bit on the Bristlecone name and a little bit on my background and what we do: coaching, consulting and leadership development.
As you mentioned, you have 30 years of experience in the insurance industry, and C-suite experience. How did you develop leadership skills?
I was very fortunate at an early age to be put in a number of different capacities and big jobs early on, and I learned a lot about what leadership meant––sometimes by making huge mistakes, sometimes by coming up short and sometimes by succeeding.
But most of my learning certainly came from probably the failures and the shortcomings.
Early along, I rallied around a definition of leadership, and my definition was very much the art and science of inspiration. And that’s a lot of what I learned over the years. You know, leadership is an art. Some people are better artists than others, just like there are better leaders than others. But what I’ve learned over the years was that a great deal of leadership, increasingly, is science.
The world of neuroscience offers us tremendous insights into the science of leadership. I personally invest a lot of time in the world of neuroscience. I want to understand how learning and memory occur in people and organizations. I want to understand how change happens, and often doesn’t happen, in people and organizations. There’s considerable science available to us now that we never had when I was coming up through the ranks.
So I think the purpose of it ultimately, the art and science of leadership, is to inspire people. It’s all about creating an environment where people are compelled to engage and to achieve.
And that’s what I think a leader does. Leaders inspire us to achieve things we never thought we could achieve.
That’s a great working definition of leadership. With that in mind, let’s talk about leadership in insurance. What challenges does the industry face right now?
For most of the industry, I would point to three challenges that we’re faced with. None of these three challenges are new, at all. They are challenges that have been put in front of us for many decades––and certainly the three decades that I’ve been in the business.
- First: the fact that much of our business is annuity-based, meaning we have renewals and that is a unique challenge to our business. The dynamic of not having to start over every year with zero clients drives a certain malaise in the business, and a certain sense of comfort in the business––because we’ve always got these renewals. We’ve got these clients. That environment challenges innovation. It challenges creativity, challenges differentiation, and challenges employee and client engagement as well. So this concept of an annuity-based business, I think, has long been one of the challenges in this industry.
- Second: the “acceptable now.” And what I mean by that, is that for the past several decades the results in the insurance industry have been fine. They’ve been solid. There have been exceptions, to be sure, but overall, the results represent what I would describe as an “acceptable now.” There’s no burning platform, no case for change. There’s nothing truly compelling that would drive big movements in the business right now. We haven’t seen any massive disruptions that have come into the industry.
- Third: our collective egos. Our egos are a big part of the challenge in the insurance industry now. They tell us we’re right. They lead us to believe we’re better than we are. They like to blame others for issues and challenges. So we need to create a deeper understanding of our egos. And if we can do that, I think we can really start thinking through what the 21st century is going to mean and bring to this industry in a far more effective way than we’re doing right now.
For me, those three elements describe the current state of leadership in the industry.
And why is leadership so needed? That is, it’s always been needed, but why is it particularly needed right now?
Yeah. The next 10 years will represent more change and disruption in the industry than we’ve seen in the last hundred years. We still have people in this industry, in certain parts of the world, walking around with paper under their arms, going to the box to speak to a person, get a wet signature.
And it’s not just the insurance industry. Other industries are facing the same types of things. You think about the automotive industry. Think about driverless and autonomous car. What are the next 10 years going to bring to that industry? Truly interesting conversation. The same goes for insurance.
I think the next 10 years are really going to define so much about what happens to us going forward. Leaders are going to have to embrace the next 10 years like they never ever had before. So I think that’s a big part of what we need to look at.
What do you see as the winning attributes and skills of a successful leader in insurance?
One I would point to is a mindset, and the other I would describe as a skillset.
First, the mindset. A lot is going to happen in the next 10 years—significantly more than has played out probably in the past hundred years. So leaders will excel if they have what I describe as a liberal arts mindset.
Let me explain that a little bit more. We have to have a broad view of not just the insurance industry, but the world. We certainly need to understand more deeply the topics of technology, operations, economics of our business, geopolitical dynamics –– all of that.
But equally important, we need to also understand critical insights that are available to us outside of the insurance industry. As leaders––and this is part of this liberal mindset ––are we students of history? Have we studied the great liberal arts leaders of the past?
If you read up on Da Vinci, it’s this fascinating education and background that he was exposed to that allowed him to connect dots that nobody had ever connected before.
Or: Do we understand the dynamics of the Industrial Revolution, and how moving from an agrarian society to the industrial revolution happened, and what was required to make that happen? Do we understand that many of the organizational structures in the insurance industry right now probably emanated from the Industrial Revolution, and maybe it’s time to move past that? It’s in the office design and other things that can come into this conversation.
I think this liberal arts mindset is going to be increasingly important for leaders to be successful in this complex next 10 years. So I put that out there.
The second point is the skillset. If I was being asked to interview an executive for a position this afternoon for a new job, I almost don’t need the job description. I almost don’t need to know the technical area in which this executive is potentially being hired. My focus would be on interviewing her, understanding her skill set as a change agent. Her technical skills are certainly important but without the ability to create change in her subject area, she’s going to be completely limited relative to her value in the organization.
There’s so much to be learned about how change can happen more effectively and people and organizations, and it hasn’t happened in this industry in so long. But the next 10 years are bringing change and so leaders—successful leaders, high-impact leaders—over the next 10 years, they need to be skilled at change. They’re going to be world-class change agents. Winning is going to be considerably more challenging in the next 10 years than it has been in the last hundred years.
I’m hearing that leadership in insurance involves two components: a liberal arts mindset and a change agent’s skillset. I want to clarify, is this discussion particular to insurance leadership—that is, executives and the C-suite—or does it apply more broadly across an insurance organization?
When I highlight the skillset and the mindset, I believe it’s for everybody within an organization. And yes if you’re controlling people and process, you’re a manager––but I think everybody can be a leader.
I think we’d all be well–served with a liberal arts mindset. The echo chamber that we can so easily construct for ourselves can be destructive to our impact as a leader. Whether it’s the mid-level in the organization or even as an independent contractor within an organization, you need to work hard to get outside of your comfort zone. To surround yourself, through whatever medium, with views and perspectives that are not yours historically, that are going to challenge you, that are going to disrupt your conventional thinking.
I truly believe––and we could talk about Da Vinci, we could talk about Steve Jobs, Shirley Chisholm––there’s a lot of people out there that broke conventional norms in ways that really changed the world. And the liberal arts mindset is really a key and I think it goes through the entire organization.
And then the change agent. The organic change that’s required is going to happen on the front lines. This isn’t necessarily something that’s going to be driven by the C-suite. There’s a lot of really impressive organic change movements that I’ve seen and been a part of. They started at the front, at the organic ranks of the organization.
I think the mindset, skillset is a ubiquitous application. I think it applies to everybody.
Don, I notice that you come from a sales background. I think in that case, you can draw a line between leadership and numbers. But that’s not always the case. How can insurers measure whether or not people are effective leaders?
There’s no doubt that leadership has a few core measures.
One is—and you hit it—profitable growth. You can usually deliver profitable growth as Attila the Hun for a certain period of time, but at some point the sustainability and scalability is going to be tested by your efficacy as a leader, as opposed to a ruler. And so I think profitable growth is actually a very legitimate indicator of leadership.
But I think there are other measures beyond that. For me, what I always felt it was very important… Are the people that I’m serving, often my direct reports and beyond: are they growing on to bigger, better things than what they were doing with me? And, if they are, then I always felt some level of validation that I did good as a leader that day.
You’ve mentioned that the insurance industry will likely experience more change in the next 10 years than they have over the past 100. We’ve talked a lot about the people part of the equation, but we’d be remiss not to talk about technology, too. How does technology fit into all of this?
Technology is really going to redefine this industry in so many ways. It’s going to disrupt the value chain in the industry.
If I look at what’s most familiar to me, I just most recently came out of the brokerage world. And in the future organizations may be able to access capital directly, clients may be able to use technology to do their own policy comparisons. Technology may provide them access to rich data and benchmarking insights. And with that, we have a disrupted value chain.
So technology is clearly going to redefine our industry over the next 10 years. There’s no doubt in my mind. It’s not the next three years, but certainly in the next 10 years, something profound will begin to take root.
And how do you suggest insurance leaders can address the changes that come with technology?
My advice for leaders in this space is to invest your time where the puck is going. Hockey reference. Where’s the puck going—not where has the puck been.
I try to do that on a personal level. I invest time as an adviser with two technology companies. It’s immensely helpful for me to spend time with these organizations, who are showing me where the puck’s going.
That is fundamentally what I would challenge anybody listening to this podcast to do, and to think about today. Where is the puck going? How can you situate yourself there and learn and grow? It’s a part of that experience.
Thank you, Don, that’s great advice. We have just enough time for a few wrap-up questions. What’s the biggest challenge facing the insurance industry today?
So much of what the insurance industry is facing probably falls into three buckets.
- One: data, a whole world of predictive analytics.
- Two: digital. We’ve talked about that. Much of the industry is highly tenured and digital transformation is going to be tough.
- Three: alternative capital. It comprises most of the capital raised over the past 10 years and much of that remains on the bench. When it gets in the game, it’s going to be disruptive.
What’s the biggest opportunity facing the insurance industry today?
Everybody leading an organization right now has been pulling levers. You know, here’s a profit lever, here’s a growth lever, here’s an engagement lever. So all these different levers have been pulled over the past several years. I believe that there’s one big lever, maybe the biggest lever, and it ties into this entire podcast topic, that can be pulled. And it’s the leadership lever.
Companies are investing in so many things within their organizations. I’d ask them to think about how much they are investing in leadership development. Ask yourselves: what outcomes could we create if we were better leaders? I think there’s a lot of good answers to that question. Pull the leadership lever.
What trends should be on the industry’s radar?
We think about trends that are near us, that are familiar to us, that are in proximity to us, ones that we can readily see and understand. So beyond what I mentioned before about data, digital and alternative capital, for me the biggest trends we need to worry about are the ones in the insurance industry that are not on our radar right now. The ones we’re not familiar with, because there are the unknown unknowns, as our friend Mr. Rumsfeld would say.
This gets us some of the conversation on the liberal arts mindset as well. Are we pushing ourselves to make sure we see trends we normally would never see?
Most notably I think about it in terms of competitors. In the next 10 years, the competitive landscape is going to change. Names we’ve never heard of are going to be in our kitchen. And so seeing those trends is harder than ever and has never been more important.
And what technology will have the greatest effect on the industry over the next 10 to 15 years?
I don’t think you can pick one. I don’t think there’s an organization, a segment, a part of this industry that isn’t going to be massively disrupted by technology. The issue is going to be how prepared we are for that. Technology really is going to redefine this business over the next 10 years.
It’s going to be a challenge because so many companies, not all, but so many of the companies that are 80, 100 years old, are highly tenured organizations—with people who sometimes are not far from retirement, aren’t really interested in a lot of change. They’re really going to be challenged by the digital transformation that is going to redefine this business in the next 10 years.
Thank you, Don. This has been such an interesting conversation. Appreciate your taking the time to speak to us.
- Don Bailey defines leadership as the art and science of inspiration—to inspire people and create an environment where people are compelled to engage and achieve.
- Leadership is especially needed in insurance today because the next decade will present more change and disruption than the past century.
- A successful leader will have a liberal arts mindset that enables them to understand and contextualize trends within and outside of insurance, as well as a change agent’s skillset.
For more guidance on fostering leadership in insurance:
- Read about seven research-based ways to build safety and trust in teams.
- Discover why mastering change is critical for success.
- Learn the importance of building trust, as explained in six eye-opening statistics.
That was episode one of the conversation with Don Bailey, a leadership coach with Bristlecone. In episode two, Don will provide fascinating insight into leadership, its common impediments and success factors. He’ll explain why trust so important, and how organizations inadvertently damage trust. He’ll also explain why adversity isn’t something to avoid, but something to embrace.
In the meantime, you can catch up with seasons one and two of the podcast.