“Before you accept”, the smile disappeared from my boss’s face, “you need to know that this job won’t be easy.  In fact, the supervisor’s job is, without a doubt, the hardest job in this business.  If you accept this job, you’ll be starting a new adventure requiring skills and knowledge far beyond anything you’ve ever imagined.  You’ll also vested with, and held accountable for, an incredible amount of responsibility.”

“Over the past several years, I’ve watched you assume new challenges with hard work, determination and commitment.  As an adjuster, you’ve been a shining star in this office.  In fact, you’re one of the best natural talents I’ve ever seen.  That said, if you take this promotion, everything you’ve done, and all that you have achieved, will become history. You will have to prove yourself all over again.”

“I think you have the right stuff and I have confidence in you, or I would not be offering you this job; but you need to understand that it won’t be easy.  I’m going to be tough on you, and I’m going to expect a lot, for your own good and the good of the company. But I’ll be fair.”

“If you accept, I’m going to see that you get started right away in an aggressive management development program designed to provide you with all the guidance you need to effectively lead this team.  The rest will be up to you.

“This is a big decision, so don’t take it lightly. Take a day to think about it and give me your answer tomorrow.”

His grin returned, “Now get out of here. I’ve got work to do.”

The Price of Trust, Loyalty and Commitment
On many occasions over the past thirty years, I have returned to that day and wished that my manager had had such a discussion with me before I accepted a promotion to claims supervisor. Perhaps had he done so, I may have avoided a narrow brush with termination that came to pass more than two years later, when it was made clear to me that I had completely missed the boat when it came to effectively managing of my team. Consequently, “the talk” will remain a figment of my imagination, and likely that as well for hundreds of supervisors and managers to whom the baton of leadership has been passed over the years.

Not that I would have done anything different, but three things might have come to pass from such a conversation:

• A better understanding that this new challenge was something totally different from that with which I was already familiar;
• A deeper appreciation for the position I was accepting and a hunger to learn all I could learn about management and leadership;
• A commitment from my boss that he would see that I received the mentoring and guidance necessary to effectively meet such a challenge and successfully shoulder my new responsibilities.

Such a conversation would have also earned my continuing trust and a return commitment to him as the leader of our group, instead of losing it.  He did, however, allow me to participate in a company-sponsored supervisory development program, and I was fortunate to receive the ongoing wisdom and guidance of an assistant manager to whom I directly reported that eventually helped me find my way back to stardom with the company.

While didn’t happen a lot back then, small segments of the industry would focus its efforts on supervisory development, either in small groups or in one-on-one relationships between mentor and apprentice. That is, until the winds of change blew across corporate America. Now much has changed, and the claims world is far different today than it was thirty years ago.

Today, that anyone receives “the talk” before they are lured onto the slippery slopes of today’s claims management structure is less than likely, and even less likely are they to receive any significant level of training or guidance in the behaviors of effective leadership.  Consequently, the void in leadership that exists across the claims community is vast and deep, and it shows in deteriorating levels of technical expertise, both customer and employee satisfaction and retention, and claim service as many carriers and claims administrators struggle against the challenges of a new claims world.

The Challenges of a New Claims World
The early 1990’s gave birth to a new era of business in America, and the insurance industry began its quest for fast and risk-free profitability that would guarantee a steady flow of capital…a quest that ultimately sacrificed a long-standing partnership between the corporation and its workforce. Over the remaining years of this tumultuous decade, the loyalty and commitment that once ran both ways between these two monstrous forces vanished, only to be replaced by “its not personal, it’s just business” and “what’s in for me” attitudes on both sides.

It all started in the early days of corporate reengineering and restructuring, when carriers and administrators trimmed sails and offloaded unnecessary ballast in order to respond quickly to market forces and increase profitability. While many of the changes and new ideas were necessary to remain competitive and pave the way for 21st century growth, sharply reduced budgets and the flattening of these organizations ultimately resulted in the elimination many middle management positions in which tremendous responsibility for mentoring, guidance and leadership had traditionally been vested.  Those responsibilities were merely pushed further down the organizational chart.  Justification for many of the changes included new perspectives on the expansion of front-line supervisory and managerial responsibilities that have fallen short of expectations, simply due to the nature of the claims business.

The 21st century has since spawned some of the most critical management challenges ever to face American business, and this is especially true in claims. Trust, loyalty and commitment now manifest themselves in such workplace issues as productivity, product and service quality, and the recruiting, development and retention of key talent.  While a few carriers and claims administrators have worked hard to retain loyal and productive cultures, companies who aren’t sensitive to these issues generally experience higher than average turnover rates and “surprise” employee departures that significantly impact the execution of business plans, as well as parallel declines in productivity and bottom-line results.

Consequently, today’s front-line supervisors and managers often have large numbers of direct reports in addition to their own responsibilities, and little time or opportunity to effectively develop any emotional tie with their subordinates or influence the outcome of claims, regardless of severity.  The impact of their expanded responsibilities has been significant and, in many ways, has had an adverse impact on traditional views of claim quality, service and outcomes. This coupled with the fact that new supervisors and managers often take reins of their teams without any preparation or training in the requirements of the job, and you have a wonderful recipe for ineffectiveness and disenchantment.

The Value and Impact of Leadership Development
A vast quantity of research has been done over the years that prove the value of strong, effective leadership, its impact on the workplace, and an organization’s ultimate success. Not surprisingly, this research shows that the manager, whether a front-line supervisor, project leader, or senior manager, actually has more power than anyone else to influence the quality of claim outcomes, reduce unwanted turnover, increase loyalty, commitment and productivity, and achieve desired results. It is this manager or supervisor who directly controls such factors as recognition, feedback and respect for the uniqueness of each person’s competencies, the employee’s contribution and value to the organization, fair compensation, a positive work environment, and an appropriate balance between individual needs and team objectives.

Why then, when strong leadership behavior and managerial skills are so crucial to these positions, is there not a focus on continued professional development at this level? Perhaps it is because it is too expensive, or perhaps there is the belief that there not enough time. Yet given the plethora of testimony in recent years on the positive impact of strong leadership, a comparison of benefits vs. costs would seem to indicate that carriers and administrators simply can’t afford NOT to invest in this level of development for their managerial ranks.  There is no downside to such an initiative.

In the end, it is clear that people are no longer loyal to companies, and it is unlikely that this will change.  They will remain so only to other people. I have since come to learn that trust, loyalty and commitment are the bricks and mortar that, when earned through effective leadership, create a solid foundation for success in today’s workplace.  Perhaps, as time goes by, companies will come to realize that its front-line supervisors and managers are the key to harnessing these values and achieving its objectives.  Investing in them by ensuring a strong emphasis on leadership and managerial development is a gamble on which little is risked, and the opportunity for gain is significant. Perhaps, in time, “the talk”, followed by “the walk”, will become an integral and routine part of the selection and development of new claims leadership.

For more information on AE21’s Mastering Management program, click here!

James W. Greer, CPCU
President, PCCP Association
AE21 Incorporated & AE21 Online
Educational & Professional Development Services