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The Actuary The magazine of the Institute & Faculty of Actuaries

Achieving the balance

The task of leading and managing in an actuarial firm is unique for a number of reasons. Such organisations tend to attract very bright people, who enter the profession to put into practice their technical training. Yet actuarial firms are also businesses. They buy and sell services, have clients and people to manage, money to collect, and profit to make. Sadly, often neither the training of the professionals, nor their early careers prepares them for future management, leadership, and business responsibilities.
While tremendous time, money, and effort are devoted to perfecting technical knowledge, historically actuaries have been left to develop their leadership skills by trial and error. As one managing partner recently said to us: ‘Trial and error has, at times, been very costly for this firm.’ Increasingly, firms are realising that future success is reliant on more than technical excellence. In a client world, where technical expertise is taken for granted, differentiation demands excellent client-facing and managerial ability.

The balanced professional
‘The actuarial world is no longer one where specialists hide away practising their magic’ the HR director of an actuarial firm.
Increasingly, firms are recognising the need for ‘balanced’ professionals, and are rethinking both graduate recruitment and personal development programmes.
‘We look to recruit much more rounded individuals these days. They are still very bright, but may not necessarily have a first-class degree’ the managing partner of a leading actuarial consultancy.
But what is a ‘balanced’ professional? Many firms describe their ideal partner along the lines of the diagram in figure 1. The perfect partner is someone who will drive the company forward and achieve its business goals effectively. This professional is commercially minded, spends time delivering client service, allocates time to developing existing clients and new clients, while also devoting time to leading and motivating their team. This partner will also keep his (or her) technical skills up to date, and apply those skills in client work.
Often in reality, the diagram is more like that which appears in figure 2.
There are many reasons why there is a mismatch between what many professionals believe is the correct balance for sustained business success, and what actually happens. However, there are plenty of firms working towards the ideal model and some are already there.

Leadership is an activity, not a position or role. Leadership at all levels in the actuarial environment has huge significance. Actuarial services depend on people and are reliant on intellectual capital. Nowhere can it be more true that ‘people are our greatest asset’ and leadership, after all, is about people. Professionals in particular tend to respond better to those with the ability to inspire, influence, and persuade than to those who try to manage them.
There are five fundamental building blocks underpinning leadership. These are:
– Management
– Direction
– Inspiration
– Example
– Team-building

‘You cannot be a good leader without being a good manager’ John Adair in Not Bosses But Leaders
Management is fundamental to administering a successful business; it involves schedules, disciplines, checklists, and rules that define and monitor performance. Good leaders are strong managers who ensure that the business operates in a disciplined manner. They do not shirk the responsibilities of the annual appraisal of their people and are firm in the application of performance standards. Many of those in leadership positions never get beyond this first building block.

Whether leading a team or a firm, we are ultimately striving to achieve something. To ensure everyone works towards this common goal effectively, they need to understand it. Giving direction is fundamental to the leadership role. It requires vision and the ability to paint a picture in words of what needs to be achieved. The most successful teams have that clarity of vision. They tend to be singing from the same hymnsheet and they are enthusiastic about the words.

For many people in successful professional firms inspiration is a common characteristic they associate with good business leadership. Inspiration is the ability to encourage in team members a personal desire to help achieve the firm’s objectives. It is about the careful use of words to motivate and inspire. Contrary to some views, we believe the team leader doesn’t need to be charismatic to inspire. They do, however, need excellent interpersonal skills to engage members of their team.

Leading by example may be an old cliché, but it is fundamental to developing the right behaviour. If the actions of any leader are in conflict with how they demand others should behave, you can have no doubt that individuals will follow the leader’s actions and not their words. If a manager demands punctuality at the start of meetings, but continually turns up late, the team soon learns that the ‘real’ rules are that it is fine to be late.

All good leaders think ‘team first’. They realise their vision can only be achieved through the synergy created in a high-performance team. That doesn’t just mean bringing in the right technical skills, it also requires the correct blend of personalities for example thinkers, doers, strategists, and pragmatists.

Qualities of leadership
We have asked hundreds of professional staff what they want from the leaders within their company. The common replies are:
– Integrity
– Honesty
– Trustworthiness
– Consistency
– Dependability
– Genuine interest
People do want their leaders to behave with integrity and stick to their values in good times and tough times. They want to be able to trust and to be trusted, and want their leaders to be consistent in the way they deal with people and situations. Above all, they want their leaders to demonstrate by their actions that they are genuinely interested in them, their aspirations and their motivations.

Creating leaders
Some organisations have a well-defined route map of leadership development to prepare each individual, not only for their current role, but for promotion to the next level. These firms are developing their future stars. In firms where this has not been seen as a business priority, there is still a tendency to hope that those other skills demanded by the business will somehow magically appear as individuals are promoted.
Leadership in actuarial companies needs subtlety, a high degree of interpersonal skill, the ability to inspire, and, above all, the ability to influence. These abilities can be developed in people, and should not be left to chance.