Why caring management pays
This week, Iím celebrating my one-year anniversary as chief executive officer at Hamilton Insurance Group. The last 12 months have flown by, jam-packed with meetings, conferences and discussions that moved us further down the path of writing the future of risk.
Iím tempted to recap the highlights, and there were many, but I want to use this first post in 2019 to consider a topic that I feel is business critical for our industry.
Itís one that Iíve been thinking about a lot and I believe itís the key to making sure our industry stays relevant as we navigate our rapidly evolving landscape. In fact, I believe 2019 will be a year when staying relevant takes on a new dimension ó one that could elevate how and why we do business.
Drucker: the inventor of modern management
When it came to understanding leadership and management, Professor Peter Drucker was ahead of his time. This Austrian, born in 1909, made contributions to leadership that have remained sources of inspiration and guidance for over a century. During his long, prolifically productive lifetime, the professor attracted oceans of accolades, and rightly so. He was a consultant to the industry giants of his time, a writer, economist, sociologist, futurologist (although he would have denied this) and a visionary thinker.
In Search of Excellence author Tom Peters famously dubbed Drucker ďthe creator and inventor of modern managementĒ. The professorís advice, to pay the closest attention to what isnít being said, is recognised as among the most astute observations about effective business communications ever made. Druckerís relevance as a thought leader and expert interpreter of leadership and entrepreneurship stems, not just from his genius, but from what he cared about.
Leaders do the right things right
Drucker held that leaders needed to do more than simply do things correctly. Consider his distinction between management and leadership: ďManagers do things right. Leaders do the right things.Ē
At first blush, the idea is simple. Of course, organisations need to do things right. But pitch-perfect execution isnít the point. To paraphrase Drucker, there is nothing more dangerous than doing the wrong thing ever more efficiently. Rather, leaders must ensure that the right things get done correctly, from accountability, to ethics to strategy.
This is not to say businesses leaders should abandon pursuit of profits and work exclusively out of the goodness of their hearts. Drucker knew that was unrealistic 100 years ago and the same goes for today. Yet this doesnít diminish our need to have a clear answer to what motivated us to get into a business, and if that motivation still exists at present.
Druckerís challenge to business leaders is that we uncover and truly comprehend, from customersí perspectives, exactly what job we are being paid to accomplish. Guided by this perspective, we can establish how to do things right and how to do the right things. This creates and fosters relevant value. These twin purposes can unite and inspire the community of people who invest in, work for and do business with a company.
Caringís place in the Second Machine Age
Todayís business leaders face more and different challenges from those even ten years ago. As we grapple with the impact of whatís being called the Second Machine Age, where does caring fit? Can this essentially human preoccupation also be an individual and organisational attribute in todayís data-driven workplace?
Predictions are ubiquitous about the pros and cons of robotics, analytics, machine learning and artificial intelligence. The problem is polarisation. The role of people versus the role of technology is not a binary question. Few would argue that machines have not and will not continue to replace human labour. The best-case scenario is for them to replace tasks, not work in the sense of the net sum of jobs. Modern organisations face the challenge of elegantly integrating people, processes, and technologies with desired outcomes.
Increasingly, corporation and campus are conjoined. I believe the Second Machine Age demands that we care about the continuing professional development of our people to make sure theyíre equipped, responsive and agile for a new era of work. Furthermore, businesses need to care about and contribute to the ecosystems that form our youth, shape their experiences and opportunities as our future workforce, and are proxies for prosperity, especially in Stem subjects.
Caring is backed-up by research
Far from being dismissed as a touchy-feely approach to management, caring ó or emphasising humanity at work ó is attracting expected and unexpected advocates. More than 20 years of research underscore the economic value of employee engagement, performance and productivity. Improved financial results can, at last, measurably be linked to leaders who model and enable compassionate environments.
Important work at major universities around the world reveals that modern companies accelerate growth and profitability when compassion is embedded explicitly into organisational design and business practices.
At its best, work involves giving, not just on a transactional basis, but with generosity. Aspects of emotional work, broader than intellectual work, foster ingenuity and innovation and birth the next generation of competitive advantage. Importantly, caring requires not merely emotion but action. Its power emerges from exerting positive change both in oneself and towards others. Generosity and trust have extraordinary multiplier effects on the value of work.
A compassionate, caring environment recognises spontaneity above rules, honours autonomy and trust, elevates creativity. Note that it doesnít jettison accountability or processes; it demands a different way of leading and working. Courage as well as care is involved. If it were easy, everyone would and could do it. They donít.
And these arenít alternatives to getting things done; theyíre avenues to getting the right things done, including things that we (and, relevantly, our competition) donít know matter ó yet.
Look, listen and care
So at the beginning of this new year, as I enter my second year at Hamilton, my review of Druckerís work reminds me to look and listen, to both whatís being said and whatís not, every day of the year, and to embed the threads of caring and compassion in the plans for profitable growth and development at Hamilton.
This reminder isnít just for leaders. Everyone can aspire to this observational appreciation of what we cause in our ecosystem, caring about all of its delicate interdependencies so that, individually and collectively, we can flourish.
Happy New Year. Make, and take, care.
ē Pina Albo is the chief executive officer of Hamilton Insurance Group
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