(Cultivating Renewal Through Smart Growth... page 2 of 3)

The New Engines of the Growth Imperative

We are witnessing a time of rapid change, and with that comes an even shorter life expectancy for almost all business strategies. To counter this, Smart Growth portfolios must include investments in new market opportunities, which foreshadow the growth engines of the future. We believe it is this perspective that will allow business leaders to operate with agility and adaptivity in thought and action, which in turn will fuel organizational resilience. The first example of effective Smart Growth portfolio management is demonstrated through our work with Lincoln Financial Group. A multi-billion dollar international financial services firm, the company was looking to invest in a potential high growth market to complement its growth and efficiency initiatives in other, more established areas of its business. The strategy was to invest in and transform the Corporate Specialty Market unit which sold specialty insurance through distribution partners. While the specialty market was not one that Lincoln had previously put much focus on, the new unit was given the ambitious goal to quickly become a top player in the industry. Leadership for the new unit was selected from other parts of the Lincoln organization as well as additional top talent from the outside - a classic prune and graft approach.

Working with The Clarion Group advisors, Lincoln’s Corporate Specialty Market leadership team first developed a compelling value proposition and established an organic Operating Model to support market entry and discovery. More recently, we worked with leadership to identify the individual and team behaviors necessary to support an evolving shared governance and decision-making approach to effectively support early market successes and quickly rising volumes. As a result, the new unit has not only achieved rapid growth, but also Smart Growth. From a standing start in 2001, Lincoln Corporate Specialty Markets is already ranked among the top five in its industry.

“The Corporate Specialty Market leadership team instinctively recognized a tremendous growth opportunity in their market. Their vision and organizational prowess have enabled them to understand and adjust their Operating Model to enable rapid growth of the business,” said Jon Wheeler, an advisor with The Clarion Group.

Staying Vigilant at Prime

For organizations at the top of the evolutionary curve, the challenge is to continually pursue strategies that spur new growth curves in order to avoid falling from prime. In today’s dynamic business environment, where some organizational business models appear to evaporate into thin air, vigilant leaders have experienced a wake-up call and recognize the need to nurture their core businesses while simultaneously pursuing new avenues of growth. Our work with Chubb Specialty Insurance offers an example of nurturing the core while investing in new channels in order to move from one growth curve to another. As part of an international, 122-year-old company, Chubb’s Executive Protection (EP) business unit faced the challenge of revamping its strategy and aligning its organizational infrastructure to reflect new market realities.

The business strategy called for restructuring its Director and Officers liability insurance book of business for public companies, coupled with an expansion of different product lines for its private sector book of business. To support this evolving strategy, EP’s leaders created geography-based “centers of expertise” where deeply skilled underwriters could better manage the public book of business. This structural change also required redefinition of the underwriting process. In addition, the business unit focused on broadening job skills and introducing new performance metrics to encourage employees to further hone their underwriting and sales abilities.

The strategic implications, organizational scope, and behavioral changes for the effort were broad and far reaching. “By taking a holistic view of the company’s way of doing business and involving people who would play an ongoing role in implementing the changes, Executive Protection positioned itself well for renewal,” commented Wendy Brown Helmkamp, an advisor with The Clarion Group, who worked with Chubb leadership on this effort.

In spurring new growth opportunities and properly aligning its Operating Model, Chubb is avoiding a common pitfall of complacency and effectively facing the challenges inherent with staying at prime.

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