Posts Tagged ‘attracting talent’

Corporate Innovation Comedy

Thursday, February 4th, 2016

There are certain fashion or fad trends which when worn by 60 year old men, skinny jeans come to mind, are just plain wrong unless you are Mick Jagger. In all the buzz about innovation, reinvention and disruption it is comedic watching the attempts of some corporate organisations in finance, banking and insurance to embrace it effectively.

The CEO stands up and says

1. “Innovation is the new normal”: err, innovation is not a rheostat with an on/off switch in outstanding innovative companies such as 3M, Merck, Apple etc.

2. “When I was at Google….”: err, you met with a middle manager or silo function (risk management) that is not even situated in the Corporate HQ. Ssh, the guy is an ex employee of ours suffering a mid life crisis but it sounds cool?

3. “We are on the side of the disruptive businesses…”: really, where is the hard evidence? Ah you have put in an order for the Tesla when the lease on the Merc expires.

4. “Let me tell you about our work with [Uber, Airbnb]…..”: your “credentials” are killing me, how are a series of actions unique to one firm now a hot trend?

5. “We took our Leadership Team to Silicon Valley….”: so you flew into San Jose on the Gulfstream, spoke to a few random clients and friends and are now immersed with ground-breaking ideas, really? Ever tried the pilgrimage to Lourdes? Thought not.

6. “I was speaking at a Tech investors event in Silicon Valley…”: you are now on first name terms with Marc Andreesen and Fred Wilson. Keep that one for the next earnings call.

7. “We are passionate about the future. We are announcing a new corporate venturing team with a $100 million of capital”: wow, so third rate entrepreneurs line up outside our headquarters. After all why would a stack of cash and a conservative reputation not appeal to serious tech entrepreneurs? Oh, nevermind.

8. “I am really excited by the power of blockchain as a powerful asset”: half the audience look blankly. The venerable City reinsurance broker or Wall Street banker racks his brain “watch chain?”, as the CEO fumbles like an adolescent boy trying to unhook the girl’s bra, in explaining blockchain’s virtues and his excitement.

9. “I have asked our Divisional Heads to set up an offsite meeting on Innovation and Disruption….”: yay, a chance to invite Wired’s David Rowan to talk to us about 10 transformative technologies. Oh hell, which futurologist should we invite? No giggling or fumbling for the iPhone and that important email when he or she stands up.

10. “It is time for the results of our Annual Report on Megatrends, we spoke to our global community of risk managers…..”: ah, that is the fella situated down the end of the first floor corridor with an actuarial background and a handful of junior direct reports. I don’t remember seeing his face in the Corporate Strategy meeting, perhaps he was at his daughter’s soccer game.

I kid you not, these are all genuine one-liners. Sorry I am bent double admiring the CEO’s shiny white teeth and folksy humour. Nice touch.

© James Berkeley 2015. All Rights Reserved.


Time May Change Brokers But They Can’t Trace Time

Wednesday, October 7th, 2015

Ch-ch-ch-changes!” exclaimed David Bowie, “turn and face the strange“… Could a record be more apt for the top management in the reinsurance broking industry today? Faced with a surfeit of supply (capital) and insufficient demand (risk) their traditional broking operations are faced with unprecedented amounts of uncertainty and competitive threats.

But I’ve never caught a glimpse, Of how the others must see the broker“…. To listen to the self-talk and thinking of C-level executives in many large and boutique reinsurance brokers on both sides of the pond is to wonder whether they are willing to be intellectually honest about how others see their attempts to provide value to customers and clients in return for equitable remuneration. It is time to truly reconcile the symbolic (another cyber liability report or data research product) and focus on the truly meaningful and immediately useful (a cedent’s improved condition, solve the under-insurance problem, harness high tech to lower overheads).

Just gonna have to be a different man“…. To paraphrase Michael Palm, the wise Centre Re sage, they need to be great at more than “hitting a nice approach to 18 and mixing a fine dry martini”. They must properly define the skills, experience and behavioural traits that are critical to address existing market needs (matching wholesale capital with wholesale risk), anticipated market needs  (demographic and social changes) and the creation of new needs for reinsurance. When the industry bemoans the gap between insured and economic losses in South Carolina, a State where the world’s finest minds have repeatedly focused their energies and actuaries have modelled risks to death, quite why is it so? Have brokers overly relied on existing needs for reinsurance (another cat layer) and failed to create the “need” for appropriate risk transfer? Do they lack powerful language skills to control the discussion with the economic buyer and the ensuing relationships? Are their value propositions suitably attuned to the forward-looking needs of their key constituents (clients, shareholders, employees, business partners and so on)?

Are immune to your consultations, They’re quite aware of what they’re going through“…. is the thought leadership of most reinsurance brokers sufficiently provocative and informed to change their ideal prospects and clients’ behaviours and ultimately, their beliefs? When everyone is largely hanging out with and saying the exact same thing to mostly the exact same group of people (Monte Carlo, Baden Baden), it is high time reinsurance brokers became an increasing object of interest and a centre of expertise to a more diverse and impressive group of peers. How many brokers truly have “trusted adviser” relationships and create a seductive rapport (intellect, language, social) with key institutional shareholders, Board Members and top management in their ideal clients? I am reminded of the head of one large broker, who used his former consulting firm’s  ties with top management in a major financial institution to secure an exploratory meeting, and within five minutes, according to an eyewitness, the banking executive responded to the broking head, “I just don’t see how you are relevant to our firm’s future!”

Broking firms must hope that their top management possess the skills and volition to move in miles, not inches (reinvention) before their clients and customers state “Where’s your shame, You’ve left us up to our necks in it”….

© James Berkeley 2015. All Rights Reserved.

Bedtime Profitable Growth Lessons

Tuesday, September 22nd, 2015

When I read bedtime stories to my daughter, there are tales of witches flying on broomsticks, young children wandering into the forest alone dark at night and absentminded Fathers getting soaked trying to repair the garden hose. At certain points she might say “I am scared”. When I ask what she is scared of, she responds, “I am scared of what is going to happen to “X” on the next page”.

Likewise we accept challenges in profitably growing businesses, knowing that there are circumstances under our control (the quality of our management, employees and the level of uncertainty within the business) and there are others that are not (competitive threats). What we know is that if we are to develop we must increase our learning. We learn by applying our past (expertise and experience) to transform our clients’ future. Our future is a function of our resilience to events outside our control and continuing to be of value to our clients (reinvest the lessons learned in new, faster, more impressive approaches).

Lesson #1: The art of management is the ability to balance the demands of key constituents for short and long-term profitable growth.

Lesson #2: Not all constituents (shareholders, board, employees, business partners and so on) are equal. Not all demands are equal (EBITDA growth, higher pay, happier clients). Behind every demand is an emotional imperative (improved image, enhanced peer recognition, a promotion) and a logical objective (lower acquisition overheads, optimum size of business, attracting word class talent). Dig for both, orient your management approach around both.

Lesson #3: “Speed” (climbing to the next level) is as important as “quality” (existing revenue generation).

Lesson #4: Success arises in the implementation of a strategy (arriving at the desired future state), not the formulation. Credit may be given to the latter but the glory goes to those, who accomplish the former. Lee Kwan Y

Lesson #5: You start by determining what your vision is and what is “mission probable”. There are a great many visions that are possible in the conceptual world but missions that are improbable (capital, people, innovation, implementation) in the real world. There are a small number of visions that are possible in the conceptual world and mission that are probable in the real world. Don’t kid yourself because you can point to one exception, who got lucky!

Lesson #6: If you are not failing, you are not trying hard enough. It is always odds against (less than 50%) predicting the future. The best management teams are probably successful no better than 1:3 with new product innovations or international expansions. What you must believe is that when you have success, the rewards are sufficiently large to cover the losses plus the ongoing costs of profitably growing the business (payroll, pension, capex, new hires etc.).

Litmus Test: Is there someone I can point to (highly similar sector and recent scenario) who has visibly travelled the same profitable growth journey as I am seeking to pursue? Are there lessons I can apply to accelerate the speed towards our immediate profitable growth (reducing labour intensity)? Are these lessons I can apply to enhance the quality of our profitable growth (repeat business, unsolicited referrals) such that moving to the next and the levels beyond that is sustainable?

If you cannot point to a real world example, it may well be for a very good reason. The path you have chosen is improbable or the timing has never made sense previously.

Of course, there are environmental changes (technology, access to capital, demographic, social) that make the previously improbable, probable. That is where the “unicorns” (AirB&B, Xiaomi, emerge from but they are the exception, not the rule.

© James Berkeley 2015. All Rights Reserved.

Bank Imbalance

Wednesday, July 8th, 2015

This morning the Board Chair of Barclays, the global bank, fired his CEO with analysts suggesting the speed of top line revenue growth, cost reduction and value creation has been underwhelming while acknowledging the progress the Bank has made in re-shaping its’ culture and shared values. The inference being that the bank has spent excessive time and resources on internal versus external issues. The point here is you have to do the following in  parallel, not sequential phases:

  1. Frame and commit resources to your strategic vision of the future
  2. Define and move swiftly through the strategy, tactics and execution towards your desired future state
  3. Define and make cultural changes to the firm’s operating beliefs, employee’s attitudes and their behaviour consistent with your new strategy and your desired future
  4. Allow for mid-course corrections to #2 and #3, where market assumptions and so forth change and need moderate or significant adaption
  5. Seek to exploit the results and value when you arrive at your desired future state (leverage and innovation).

Here is some key questions to ask in your own organisation and your clients:

  1. What proportion of management time, employees time and capital is being directed to internal issues versus external issues? Is that appropriate for the organisation at this stage of its’ growth strategy? If not, what needs to change?
  2. Does the firm’s leadership posses the skills and volition to make appropriate decisions rapidly and exemplify the desired beliefs consistent with the growth strategy? If not the leadership needs expert help to adapt or ultimately change those at the top.
  3. Is the business measuring what matters? Does it possess performance-based job descriptions and metrics for each individual throughout the organisation consistent with the growth strategy? If not, it needs immediate correction.
  4. Are they holding each other to account for accomplishment of key performance-based priorities? If not, starting with top management it needs to create or reinforce accountabilities down the line (carrots and sticks, monetary and non-monetary versions)
  5. Are they hiring, recognising and rewarding people for both the right behaviours and results consistent with the new growth strategy?  If not, it needs immediate adaption of the hiring, performance and rewards systems undertaken by line management not HR.

The banking sector is a poster child for excessive internal focus on compliance and costs. I sat at dinner last night with the regional head of a Top 10 global bank, who is accountable for protecting the bank from financial crimes and compliance breaches. He recounted his daily routine of corralling 12 CEOs of regional operating units, questioning their practices and where necessary forcing them to abandon clients, employees and products. What is obvious from the conversation is that in an effort to protect the bank’s bottom line there is a daily struggle to define “prudent risk taking”, to balance that with profitable growth and to use everyone’s time valuably. Isn’t that a skills set you would expect every banker to have learned at the start of their career?

The reality as Anthony Jenkins dismissal today shows is that those skills are in shorter supply than most imagined.

© James Berkeley 2015. All Rights Reserved.

Its The Management, Stupid

Wednesday, July 1st, 2015

McKinsey has cottoned on to what I have been saying for several years. The insurance sector’s obsession with data and analytics is irrelevant if the management of the businesses aren’t willing or able to change their beliefs and attitudes.

In a year when weekly landmark deals have rained down like confetti in all corners of the industry, it raises the following questions:

  1. Why is the industry is so in love with hiring C-level executives from within?
  2. If so many leaders are poorly qualified or unwilling to address business complexity, operating models, IT and performance management as McKinsey suggest, why aren’t Board Chairs and shareholders more assertive in casting a wider net?
  3. What would it take to attract leaders with the skills and volition to challenge widely held beliefs and make meaningful changes that transform insurers’ operating performance?

Therein lies the key future challenge for the sector and the experts who are able to help answer those valuable questions will be able to charge whatever they want.

© James Berkeley 2015. All Rights Reserved.


3 Reasons Business Leaders Should Trek To Glastonbury

Friday, June 26th, 2015

Over 250,000 people will descend on a sleepy corner of Somerset, England for the Glastonbury Festival today. For some an annual rite of passage and others an introduction to an experience their Parents still rave about some 30 years after first making the trek.  There are acts of their Parents generation (The Who and Paul Weller) and their grandparents generation (Burt Bacharach) joining today’s megastars (Pharrell Williams and Kanye West). The event is a classic example of the three “R’s”: relevance, recognition and reinvention as its’ market’s needs and ideal buyers have changed. “Relevance” in the form of is the experience what our ideal buyers need (introduce hospitality chalets alongside the pitched tents). “Recognition” that the time is now for bold changes and adaption of our beliefs (infuse rappers and uptown funk with a rock heritage). Finally a constant commitment to “reinvention” (introducing new acts to regular attendees and old acts to new attendees).  It sounds simple and when you look at market-leading businesses it is universally a trait that keeps them at the forefront of their competitor set. Yet for a great many firms and indeed sectors (private banking, insurance, legal, accounting and audit firms) it is something that they struggle with hugely. It is first and foremost a leadership issue. Great leaders are willing to champion change. They lead from the front with their eyes focused on the stage, not the disheveled hipster swaying in front of them. They listen intently and consistently ask the right questions at the right time. They apply that knowledge rapidly to the critical organisational issues impacting their firm’s future and make wise decisions consistent with the strategic direction of the business. Are those the very same traits your leadership regularly exhibits and you hire for? If not, why as a client, employee or shareholder should I return each year to listen to your tired line up of fading musicians playing music that is boring and increasingly irrelevant to my future?

© James  Berkeley 2015. All Rights Reserved.

Maintaining High Growth Mindset

Monday, June 15th, 2015

When a trusted colleague refers a talented individual to you, is your default position to offer them a warm welcome or to immediately state copious reasons why you don’t have the need or money without listening to them? The former is a classic example of a high growth vs. a low growth mindset.

In industry sectors where convergent forces (new sources of capital, technology and distribution etc) are increasing the amount of uncertainty and competitive threats, Boards and executives would be wise to look out for these behavioural dispositions in their key people, understand the cause, take appropriate action and reinforce the desired behaviour.

If left unchecked, this low growth behaviour permeates throughout the business, future clients and employees are turned off and top line revenue growth stalls even faster.

Copyright James Berkeley 2015. All Rights Reserved.

Are You Thinking What I Was Thinking V

Tuesday, March 24th, 2015
  • No one really knows when markets valuations are at a “peak”, most commentators and investors (Prem Watsa, Sir Michael Moritz and others) are merely applying “gut instinct” like the rest of us
  • After 7 years of “easy money” is it a surprise that we have record market prices (stocks, art and so on)
  • More people have lost money calling a market collapse than a market rise, be careful who you listen to
  • Well run businesses with strong “real” earnings and high quality management and employees will always outperform in the long-term those firms that lack those attributes
  • When retail and institutional investors have greater access to information and knowledge in real-time at less cost, why should tomorrow’s investment cycle follow yesterday’s cycle? We live in a different age.
  • With “real” unemployment and the growth of start ups in many G20 countries at near record levels, wouldn’t policymakers, politicians and media be better off talking more about our “future” prosperity than our “past” grievances
  • When I read polls suggesting  that electorates are more “disengaged” with politicians and their political parties than ever before doesn’t that tell us more about our own fears (education, self-improvement, reinvention)?
  • When you study empirical evidence, we are probably living in the most prosperous and safest decade in the past 100 years, why doesn’t it feel like that when I turn on the television news or pick up a newspaper
  • We are right to be concerned about the legacy we are leaving our children (underfunded entitlements, increasing complexity, wealth gaps) but we rarely reflect on how much wiser they will be than us (technology, health, education and other improvements)
  • We look too much at the rise of China, India and other high growth markets as a threat, when we should consider it as an opportunity
  • If you are well positioned (investor, business or employee) in healthcare, education, technology, travel and dare I say it in financial services, you are in sectors with 10 years of very strong growth
  • How many cases can you point to where great regulation has saved us from a downturn? Wouldn’t we better placed putting the onus on executives to show good judgement rather than leave it to our politicians and mandarins to tie them in knots?
  • We confuse largely “symbolic” action (an executive foregoing a bonus) all too often with “meaningful” improvements (smarter strategic decision-making, hiring better quality management and employees)
  • We “deify” celebrity leaders (Jack Welch, Sir Alex Ferguson, Sir Richard Branson) and often overstate the transfer value of their “unique” approaches. In other words their ideas were perfectly suited to the prevailing conditions in their environment but those same conditions rarely exist or in the same order in our own environment
  • Wouldn’t we better served by harnessing the power of “Big People” (an ability to apply knowledge more wisely) than “Big Data” (carving out granules of worthwhile data that must be formatted into meaningful information)?
  • In the hype around Uber, Lyft, Xiaomi and so on why are commentators, investors and analysts not asking more vociferously why so many multinationals failed to exploit these sources of innovation when they were in a far stronger position to do so? Is the boom in corporate venturing a recognition that management in many large multinationals have given up on finding hidden gems within their own business?
  • Twitter and other social media ads, why would they take precedence for a B2B business over boosting the number of peer referrals obtained from existing clients? Don’t get lost in the consumer hype.
  • When did your firm last buy from a cold caller? Wouldn’t those sending spam SMS, email and print flyers be better served attempting to forge a trusting relationship with real buyers? Perhaps they are not very bright.


© James Berkeley 2014. All Rights Reserved.

Garnering Investor Movement and Motivation

Thursday, October 30th, 2014

Why do so many conversations with investors move so slowly or don’t go anywhere at all. I observe the “cause” is largely a result of entrepreneurs and executives own shortcomings. There is a simple question to answer, can you (the entrepreneur or executive) convince the investor you can be of help, or will the investor convince you that you cannot.

  1. Mindset: do you see the fundraising process as adversarial (“taking” the investor’s money)  or involving shared responsibility (helping the investor achieve their own objectives). This why television shows such as “The Apprentice”, which largely depend on the former to drive television ratings, are a terrible example. Do you really want Donald Trump or Alan Sugar, as a business partner. Their track record with relationship-building would cause any sane person to run a mile.
  2. Effective Influence:  there are only three ways to influence an investor’s behaviour and two of them won’t help you.
    • Threat. You might move along their interest an inch by scaring them but you won’t gain their commitment. (“Your competitors are going to kill you if you miss this huge growth opportunity.”) It just results in hardening their feelings if they are resistant.
    • Peer Pressure. (“You are missing out on the next big thing”).You may cause investors to move a mile, rushing towards investments in these areas like sheep but rarely does it generate long-term commitment. For example, cyber risk insurance propositions, are garnering huge interest but very few are getting serious investment support today.  
    • Investor’s Self-Interest. An appeal to mutual self-interest is the only tactic that works to create movement and motivation to act. Why? The investor grasps how important your partnership is in achieving his or her own objectives or goals (future growth of the fund(s), improved image, attract higher quality returns and investors, a potential promotion or bonus etc). That is why fundraising cannot be a tussle but must be collaborative, where both parties visibly “win”, personally AND professionally.

I am publishing a paper, “The Five Myths of Investor Demands” next month. I’ll happily share my best tips by phone or email .

© James Berkeley 2014. All Rights Reserved.


The Parisian Paradox

Wednesday, October 8th, 2014

In the past week, a UK retail executive slates France, describing Garde du Nord station, “the squalor pit of Europe”. The French Prime Minister, Manuel Valls, on a visit to London retaliates, accusing the same UK executive of having drunk too much beer. A Boston Consulting Group survey suggests London and New York by quite some margin is a greater magnet for  internationally mobile executives and employees than Paris. Should we be worried or is this knockabout “entente cordiale” chatter? After spending the past few days in Paris, here is my observations:

  • Paris has become a far more international city (almost every retail outlet has people under the age of 40 voluntarily speaking English, almost unheard of in 1994)
  • Customer service and responsiveness varies wildly (it is still a pleasant yet rare event, to see front line staff, predominantly local, offering to resolve and take ownership of service issues)
  • Technological innovation is slow and you would hardly call Paris a well-networked city (WiFi and other technology is still very fragmented in public spaces)
  • Traditional private sector businesses and local workforce expectations are being challenged like never before (availability of work, jobs and reliance on careers for life). The traditional employer-employee bond is mired in mistrust and suspicion about management and shareholders’ intentions.
  • There is an insouciance in the public sector (rail, energy, utilities) with still little visible change of mindset about the need to dramatically improve the customer experience or adapt working practices
  • Working for an International versus a French employer is less viewed as a financial decision, more a pragmatic move (increasing job and career mobility)
  • In a competitive global jobs market, Paris faces an unparalleled challenge retaining smart “twenty something” people, who increasingly love the drive and passion of an Anglo-centric “freedom to fail” business culture (the Sunday evening, “le weekend” commuters on the Eurostar are at unprecedented levels)
  • Recovery will not truly have set in until there is a net inflow of these entrepreneurs and executives (many though are increasingly laying down roots in London or New York and committing to longer-term stays upto 10+ years, so the bounce back will be slow)
  • It remains the capital of the world’s 5th largest economy but you sense it fears the speed with which newer capital cities are attracting inwards investment, jobs and appeal (there is no obvious vision of a Paris 2020) by comparison to a Dubai, Singapore or dare I say it, a London.
  • Paris’s prominence in luxury fashion and culture remains but its’ relevance in global knowledge sectors (technology, financial services, professional services, healthcare and education) is declining
  • There are standards of public behaviour, which are demonstrably more liberal than almost every major global city (attitudes to sex, adherence to laws and ethical “norms”)
  • Investment in infrastructure (public transportation, new high quality offices and housing) is anemic
  • Paris has been more successful than London in attracting larger numbers of Asian tourists (less visa obstacles) but less visibly successful in attracting their inwards direct investment in business (high start-up costs)
  • While hotels might on average be cheaper than New York, London, Hong Kong or Tokyo, eating out and transportation is arguably more expensive for visitors
  • Ultra high net worth French families are continuing to move to less penal tax locations (London, Switzerland), while shoring up their affairs from assertive tax inspectors (more complex transfer of trusts to places like Hong Kong and Singapore) and consciously guarding their wealth (more private sale purchases through third parties and less activity at public auctions)
  • There is visibly a greater willingness to embrace international investment / sponsorship of previously “off limits” French cultural, sporting and nationally important events (Qatari investment in football clubs, horse racing; Nike in athletic events; Deutsche Bank in major art shows)
  • High fixed labour costs and regulations in Paris will increasingly see SME businesses and investors prioritise the digital sales channel for short-term export-driven growth
  • Government policies and prohibitive taxation are leading to a prevailing business culture of “caution”, not great for a surge in top line revenue growth or a rebound in economic confidence
  • Paris remains equally an idiosyncratic (culturally diverse) and frustrating (bureaucratic) place to live, work and start a business but a fabulous place to visit and find one-of-a-kind experiences

© James Berkeley 2014. All Rights Reserved