Taking over as CEO is a daunting task, presenting unique challenges associated with building relationships within the new organisation and imposing a new management style.
That is the view of Belinda Chiaramonte, partner at Expertise, Bermuda’s largest management consulting and outsourcing company about the drivers of change at the top. Following the departure of David Cash from Endurance, Bermuda:Re spoke with Chiaramonte about the likely challenges faced by reinsurance executives such as the newly-appointed John Charman.
What are the major drivers of change at the top?
Changes in leadership are normally the result of a decision by the incumbent to retire for instance, or a result of a decision of the board that the company requires a change in leadership. The latter can be prompted by financial results not meeting market expectations, or disagreement between the board and the CEO over the required strategic direction of the company.
What are the challenges of bringing in an outsider as opposed to someone from within the firm?
On an external front, a new leader from outside the company must quickly develop relationships with, and gain the confidence of, key investors and the market in general so as to retain share value. Given the nature of re/insurance business, it is also important to re/establish relationships with key clients and brokers so as to retain business that might have been tied to the relationship of the previous CEO.
Internally, I think one of the biggest challenges caused by a change of leadership from the outside, is when that leader brings a different management style to the organisation. A collaborative visionary leader will cultivate this management style throughout the organisation, whereas a more command and control leader will often necessitate the same style throughout in order to meet reporting requirements. Given that this shift in the working environment can be happening at the same time as the strategic direction is also shifting, strong change management practices are needed to get the whole organisation moving in the same direction effectively.
What are companies looking for from CEOs in both the start-up and expansion phases of business?
In the early stages of an organisation it is important that a CEO paint a vision of what the company will look and feel like, and then to unite management and employees in buying into and moving towards that vision. In reinsurance it is often the CEOs role to establish the cohesion between the actuarial and underwriting teams to support the underwriting strategy. It is also incumbent upon the leader to constantly monitor external conditions and shift that vision to ensure that the company is taking advantage of market opportunities.
Has the role of brand ambassador become an increasingly important quality among reinsurance CEOs?
Relationships are key in the re/insurance market, and it is up to the CEO to establish and be an ambassador of the strategy and brand of the organisation. That branding must extend beyond the CEO to everyone who represents the organisation in the market if it is to be consistent.
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