A Primer on Leader's Intent for Captive Insurers

A skeleton key lying on top of the word LEADERSHIP

December 16, 2019 |

A skeleton key lying on top of the word LEADERSHIP

In my semiretirement role as a governance consultant, I seek to read relevant articles. Along these lines, I recently read a Harvard Business Review (HBR) article, titled "Why So Many High-Profile Digital Transformations Fail," by Thomas H. Davenport and George Westerman. I also just finished reading Call Sign Chaos: Learning To Lead, retired General Jim Mattis's career history and commentary on leadership. It struck me that an effective leader's intent is central to both, although probably less obvious in the HBR article, which then led me to write the following primer on "leader's intent" for captive insurers.

This is not the first time I've been exposed to the concept of "leader's intent." While working in the captive industry, I was fortunate enough to attend a Battlefield Leadership course at Gettysburg. As part of the experience, participants walk the fields of conflict for 3 days and then convene to discuss what occurred. During the first day of the battle, General Robert E. Lee and his subordinate commander General Richard Ewell provide a case study in the question of leader's intent.

So, what exactly is "leader’s intent"? If we accept the fact that every organization today, including captive insurance companies, lives in a dynamic environment, how do your company and its personnel get the results necessary to adapt and succeed? The answer is by making sure top management is able to clearly articulate what success looks like and how it relates to the overall goal and disseminate this vision all the way through the entity.

Why is this important? A very clear example is in "Leaders Focus Too Much on Changing Policies, and Not Enough on Changing Minds," by Tony Schwartz, published on the HBR website on June 25, 2018. The article cites a study conducted by the Boston Consulting Group, which found that "85% of all companies have undertaken a transformation during the past decade. The same research found that nearly 75% of those transformations fail to improve business performance, either short-term or long-term."

So, if the captive industry accepts the fact that we need to continue to adapt to remain relevant, 75 percent of the time we undertake some type of transformation, it is destined to fail. Think about the inordinate amount of employee time and resources wasted. For a captive, where both of these are precious commodities, it is imperative that we do a better job and attain a higher success level.

Where does the responsibility for leader's intent lie within a captive insurer? It will likely vary depending on the type of captive. For a single-parent captive of a large corporation, it may well reside with the chief risk officer or even a risk manager. On the other hand, for most group captives, responsibility becomes the raison d'être of the board, with the board chair assuming the task of communicating the intent.

The problem with most leaders is they assume their communication style is flawless, since, they tell themselves, "How could I ever have become a leader if it wasn't? If what I communicate makes perfect sense to me, how could it possibly be misinterpreted by someone else?" The fallacy here is that communication is easy, when in fact it's very difficult. In order to deliver your intent and have the message understood at all levels of the organization, it takes serious preparation, intentional delivery, and continuous and consistent reinforcement.

Call Sign Chaos: Learning To Lead includes the following definition of how to effectively deliver the leader's intent.

In drafting my intent, I learned to provide only what is necessary to achieve a clearly defined end-state: tell your team the purpose of the operation, giving no more than the essential details of how you intend to achieve the mission, and then clearly state your goal or end-state, one that enables what you intend to do next. Leave the "how" to your subordinates, who must be trained and rewarded for exercising initiative, taking advantage of opportunities and problems as they arise. 1

This statement essentially becomes three items when broken down: purpose, key tasks, and end-state or goal. However, as I learned from the HBR article, it is critical that leaders recognize the "people" element in all of this because the "how" part of General Mattis's description clearly falls within their purview. In business, it would be wonderful if we could surround ourselves with people who thrive on change, yet this is not the normal comfort level for a majority of the population. Therefore, it becomes imperative to the leader to also act as a coach by mentoring key subordinates or, in the case of a group captive, outside professionals, into being willing to try new approaches.

It is interesting to note that this methodology is the antithesis of the old command and control leadership style. Here, the idea is to decentralize leadership across the organization and as far down the organization chart as possible. As a sidebar, this leadership concept is more aligned with the younger generation's desire to be involved in decision making. But, it requires leaders who are willing to act as mentors and also tolerate mistakes or failures when they occur.

Another aspect is "strategic importance." As their leader, you are trying to help your employees become more flexible and open to change. When mistakes happen, and they will, staff will quickly judge you on whether you have their back when things go wrong. If you don't, you will never successfully implement the leader's intent since your personnel will not be willing to take the initiative to act when it is required.

Hopefully, this basic primer on the leader's intent will intrigue some of you enough to begin the process of acquiring additional knowledge. I will close with one other General Mattis quote, although with a very minor editorial license: "If you are not reading hundreds of books and articles, learning from others who went before you, you are functionally illiterate—you can't coach and you can't lead."2

  1. Jim Mattis and Bing West, Call Sign Chaos: Learning To Lead (New York: Random House, 2019).
  2. Jim Mattis and Bing West, Call Sign Chaos: Learning To Lead (New York: Random House, 2019). Original quote is as follows: "If you haven't read hundreds of books, learning from others who went before you, you are functionally illiterate—you can't coach and you can't lead."

December 16, 2019