Wednesday, October 8, 2008

Leadership insights from James Schiro, CEO of Zurich Financial Services

This post summarizes some insights today from an excellent talk by James Schiro, the American CEO of Swiss insurer Zurich Financial Services, about the topic of financial leadership in a difficult situation, which of course is an especially timely topic. Schiro has turned around Zurich from a company that lost $3.6 billion in 2002 to one that made $5.6 billion last year. This has been done through centralizing risk management and divesting non-core business to focus on Zurich’s core skill of delivering outstanding, customer centric services focused around insurance.

Some of Schiro’s most interesting points:

1) In 2002, Schiro took over as CEO and said that he wanted Zurich to be a “boring” company. It’s the sexy stuff such as CDOs and other derivatives that have buried companies like AIG recently. Zurich got out of this for the most part and is in strong condition, both in comparison to its 2002 state and its competitors as the markets melt down.

2) Recognize when you don’t have technical expertise and surround yourself with a team that does.

3) Confidence and credibility is important in an individual leader, and it’s important for a firm as a market leader.

4) Focus on the core of what you’re good at. Schiro said when he joined the firm was highly decentralized with over 350 profit centers, very few of which were actually profitable.

5) Schiro shifted Zurich’s focus to operational excellence, growth in profitable core businesses and transforming Zurich into a customer-centric firm. Customer centric firms seem few and far between in financial services, yet can this can be a significant source of loyalty, repeat business and word-of-mouth advertising.

6) As a leader, Schiro argues that you must constantly develop talent by stretching young people, investing in people and forcing people outside of their comfort zone. Experienced people must be mentors.

7) He looks for people who are adaptable, flexible and can manager in ambiguous environments. A strong leader can also motivate people to action and get people to fight for a common cause.

8) Being transparent about the competitive pressures a company is under and communicating that to other senior managers is essential to getting the buy-in at that level necessary to execute.

9) A centralized framework for risk taking across the enterprise is essential in this day in age. (Amen, ERM!)

10) Setting the right tone at the top is important from a leadership perspective. To this end, Schiro stops in at a monthly training for mid/senior level managers in his firm every month, no matter where it is in the world. That’s what he was doing in Boston – that’s putting your money where your mouth is.

1 comment:

Anonymous said...

great post. thanks for sharing this.