Category Archives: Business Management





Today times are different and making history as a business leader, calls for a distinctively different approach. The long-held dictum that if you do what is expected of you, you will do well, is no longer the sure path to history-making success as a leader.

We are not even 20 years into the 21st century and there have been more changes in business orthodoxy than occurred during the entire 20th century. The American economic system (if not the whole world) has been at war with itself. The world of accepted business mores and the time-honored requirements for making history as a business leader has been hit with the unannounced suddenness of a 9.2 earthquake. This tremor of transformation shook the traditional concepts of business and leadership to the core, and the resultant tsunami of change washed away all that had been customary and comfortable.

The game is different now; meaning that for individuals to make history as successful leaders in this environment, they are going to have to be different too. The conventional concepts of leadership skills are not going to be enough to make business history. The history making leaders of tomorrow will be those who employ new theories and altered skill-sets.

The business world is filled with thousands of well-intended, dedicated individuals working diligently to meet the standards and apply the accepted techniques of successful leadership. That is good, but it will not be enough to stand out and make history as a leader in these new times. If you want to be the one making history, you first have to come to grips with the understanding that it is no longer enough to simply follow the rules and lead like everyone else. Instead, history will be made by those willing to take a different approach than other hard-working individuals trying to achieve success.

Believe it or not, it is possible – and not all that difficult – to absorb what has been learned in the past regarding leadership requirements and then take it just one step further. Being willing to go the extra mile is what will distinguish the average leader from the exceptional one.

Traditionally, success came from doing the right things that were required to be done. Individuals seeking leadership roles were admonished to follow the rules, be ethical, do what others have done and go along to get along. That has always been the formula for success. However, to distinguish oneself as a leader who will make their own brand of history, it will require taking actions that are not required to be done. It is a different philosophy of leadership that embodies the notion that leaders should do more than is required to be done and instead focus on what should and can be done.

As just one example of what could be many, consider that everyone accepts that it is the right thing to treat employees fairly. Employees should be paid fair wages, provided with good working conditions and know clearly what is expected of them. This approach was fine for the last century, but if a leader wants to make history in this century they should do more. It’s not required by the old ways of doing things, but if employees are treated with respect for the talent they have and are rewarded for the value they add to the effort, they will be encouraged to do more and help the leader achieve success. It is not tradition, but if employees are empowered by allowing them to influence decisions and make a difference, they will take ownership, not only of their jobs, but will be motivated to help the leader make history.

It seems too simple to make a real difference, but this leadership attitude of doing more than is required to be done is what it will take in today’s changed environment to empower a leader to make history. And just remember: If you’re not making history, you are history.

Cruz Offers Evidence of Being Severely Leadership-Challenged



It has always been my contention that one of the best ways to learn to be an effective leader is to closely study the approach and actions of those in leadership roles; both those who are effective and those who fail.

The most important aspect of leadership is the cultural environment created by the leader, because it ultimately defines the success or failure of the leader. The culture created by a leader is the conduit to communicate what the leader is about as a person, what they are for, and what they seek to achieve. Another value of the culture established by a leader is that it encourages and empowers followers to take actions they believe are aligned with the leader’s desires; even if the leader is not directly involved in the actions. As we will see, when a culture is not predicated on sound principles of integrity or the message is inconsistent, bad results can happen.   

For the leader to be effective, the message of the culture must be consistent and unrelenting. Only chaos follows when a leader is not clear about their values or does not adhere to the principles they have espoused. Observing how leaders build their culture of leadership, how they react to different situations, the examples they set for followers and how they interact with them is a great way to learn what you should do or not do as a leader.

The culture of leadership created by the leader can be for good or evil, but only those built on sound, positive principles that are unflaggingly adhered to can bring about lasting leadership success. Those cultures that are not a true reflection of the leader’s core beliefs (good or bad) or are based on less than the highest levels of integrity may be successful in the short term, but ultimately they will cause the downfall of the leader.  

My belief is that one of the best ways to see this dynamic in action is to be a close observer of the political process. Besides, when it comes to deciding who to support as a political leader, the clearest signal the candidate sends out as to what type of leader they will be, is not what they say or promise during the campaign, but the type of culture they create around themselves in order to get elected. Studying the leadership styles exhibited in an election campaign is a great way to learn about leadership, because it is very visible and it is conducted over a limited period of time.  

Leadership Cultures of Nixon and Cruz

The leadership style and culture created by Richard Nixon is a great case in point. Nixon campaigned on the theme of “bring us together,” but his real strategy was to divide and conquer. Once Nixon was elected, he created a deceitful bunker-mentality culture based on an “us against them” theme. For Nixon, if you were not for him, you were an enemy to be vanquished. The Nixon culture sent the message to followers that any action – legal or illegal – against his enemies was acceptable. This approach to leadership was effective for a while – he did win reelection in a landslide – but in the end it led to his disgrace and downfall; as well as jail for many of his followers who had bought into the flawed culture created by Nixon.  

By all available evidence, Ted Cruz is also one of those leaders we can learn from by recognizing what we should not do as a leader, if we want to be successful. Cruz seems to be building a campaign culture that Nixon would be comfortable with. While Cruz talks about honesty, integrity and the essence of purity in his conservative beliefs, the actions of his campaign workers signal that he is creating a different type of culture. The problem with the leadership culture Cruz is building is that it is based on deceit. He talks of honesty and integrity but allows (if not encourages) the opposite. The message sent by the Cruz culture is that lying, cheating, and dirty tricks are acceptable so long as they help him become the nominee.

The first evidence of this emerged at the Iowa primary when the Cruz campaign disseminated word that Ben Carson had dropped out of the race and his voters should turn to Cruz. This came along with an extensive direct mail piece about “voter violation,” attempting to confuse and intimidate voters. This was soon followed by a Photoshop altered photo attempting to show Mark Rubio cavorting with President Obama. Not long after that a video of Marko Rubio supposedly rejecting the Bible was released by the Cruz campaign. The only problem was that the video had been unscrupulously edited to make Rubio look bad.

When the complaints about this type of activity reached a crescendo, what did Cruz do? Just like Nixon, he disavowed knowledge of any of these activities and fired the senior campaign worker who released the video. (There had been no accountability for the first two actions.) This is another example of the type of leader Cruz might be if elected. Rather than stepping up and accepting responsibility for the type of campaign culture he had created and committing to make a change, he threw the guy who thought he was doing what Cruz had sanctioned via his cultural message under the bus. A leader who does not understand and control the message being conveyed by his culture is not really a leader; or will soon be a failed one.

But there is clear evidence that Cruz understands very well the Nixonian culture he is building. After all, the man he has hired to be his campaign manager – Jeff Roe – has been characterized by the New York Times as “an operative with a reputation for scorching earth, stretching truths and winning elections.” Mr. Roe is considered by many to be the current “master of dirty tricks.” And this is the man Cruz has hired to bring his brand of leadership culture to life.

And the Moral of the Story …

Remember that the effectiveness and longevity of your leadership will be determined less by the words you speak or the public face you wear. It is the culture of leadership you create that will identify your true leadership success, because it offers the real message of who you are and what you are about. That is why Cruz – as Nixon was – appears to be leadership challenged.

(It is only fair to note that the culture of leadership being created by Trump also shows signs of poor leadership. There is a difference between the two, and we will discuss the failing of Trump leadership next time; so long as he is still in the race.)


More Disturbing News For The Life Insurance Industry

 MetLife building in New York, October 8, 2008. REUTERS/Lucas Jackson)

MetLife building in New York, October 8, 2008. REUTERS/Lucas Jackson)

Last month, MetLife made the bombshell announcement that it will exit from the life insurance business. The company indicated it will shed its life insurance and annuity business by forming a separate company and then selling stock in the new company via an IPO; in essence selling its life insurance business to stockholders. (Most likely because MetLife knew no other company would buy it.)

For those of us in the insurance industry, this is one of those, “you’ve got to be kidding me” moments. Could you have ever imagined reading that MetLife, the very pillar of the life insurance industry, would announce that it is getting out of the business? This is akin to the New York Yankees announcing they are going to get out of the baseball business.  

MetLife CEO Steven Kandarian justified the decision by blaming federal regulators for imposing the “too big to fail” tag on MetLife. The MetLife grievance is that these federal regulations would require the company to increase – to unreasonably high levels – the reserve capital it holds to support its life insurance business. (Of note, there are those in the financial and regulatory community – including the Insurance Department in New York – who have suggested that MetLife has been “playing games” in reporting its life insurance reserves.)

Blaming federal regulations for MetLife’s decision to exit the life insurance business is at best a half-truth. The new federal regulations for reserves may have been what triggered the decision, but they are being used more as a smokescreen and an excuse for doing what the company has wanted to do for a long time. MetLife acknowledged that even if the company were to prevail in its lawsuit against the federal government over its designation as too big to fail, it would still exit the life insurance business.

There is an unspoken but simple truth underlying MetLife’s decision: Life insurance and annuities are no longer “core” to the future of MetLife. It may surprise some in the insurance industry, but the retail life and annuity business now represent only about 20 percent of MetLife’s operating earnings, and it has been declining. MetLife reported that in the third quarter of 2015, operating earnings from life insurance and annuities declined by 33 percent from the previous year and growth had slowed to just 2 percent, compared to 12 percent the previous year.

Reaction by the Financial Community

When MetLife announced its decision to exit the life and annuity business, the financial community did a happy-dance. MetLife stock jumped 10 percent, right off the bat. The Wall Street Journal suggested that MetLife’s action will put pressure on the industry’s biggest companies such as Prudential and AIG to follow suit and exit from the life and annuity business. The Journal mused that MetLife’s action could trigger “a broader shake-up of the insurance industry’s biggest companies.”

The MetLife Decision in Perspective

It is difficult to argue with the MetLife CEO’s decision to exit the life insurance industry. He should be given credit for recognizing the realities of the industry now and for taking action to meet them. For a number of reasons, there has been, in effect, a “polar reversal” in the fundamentals of the life insurance industry. An industry that operated for 150 years selling products based on guarantees producing long-term value and long-term profits, has become an industry driven by fear of guarantees, short-term profits and commodity pricing. A business model predicated on long-term value and steady returns simply cannot function effectively (if at all) in a frenetic short-term world.

There is a simple factor at work here: It is expensive, in terms of capital required, to guarantee meeting the liabilities for mortality (death benefits) or longevity (income in retirement) that either may not emerge for decades or (even worse) be unpredictable. It is the cost – capital held in reserve – to provide these long-term guarantees that MetLife has decided it is not worth paying.

Driving this dynamic is the reality that many of the larger companies in the industry such as MetLife, Prudential and AIG are now public companies judged on the basis of their performance in the next calendar quarter, not the next quarter century. In this short-term world, the financial community views capital that is held in reserve against future liabilities as “dead capital,” and that is judged to be a liability in and of itself. This modern reality is at the core of MetLife’s decision not to invest its precious capital in new life insurance business.

It is of note that MetLife is not divesting its large block of in force (called a “closed block”) life insurance and annuities. This business has already had capital invested in it and is throwing off consistent profits. What MetLife is saying is, “We don’t want to invest our capital in new, long-term life and annuity policies, because we are being pressured by the financial markets to deliver short-term returns on our invested capital; returns not available from life insurance and annuities.”  

There is a cruel irony in this situation: When the life insurance industry was singularly focused on guaranteed long-term products sold on the basis of value, it was awash in capital. The profits from this type of business created more capital than the industry could invest. In 1987, when I started LifeUSA as a new life insurance company, no less than seven very large companies fought over the right to provide the capital needed to write our new business. These companies literally paid us to take their capital, so they could participate in the long-term life insurance and annuity business LifeUSA was writing.

It was only after the companies began to shift away from guarantees and long-term value, toward a focus on commodity-type products designed to generate short-term profits that their capital base began to evaporate. By looking short-term for its return on capital, the life insurance industry moved from being a capital creator to a capital eater. As a result, the life insurance industry has now become dependent on sources of capital such as the stock market and private equity funds, that demand higher returns than life insurance is designed to produce, and these returns are expected to be delivered over the short-term. Faced with this pressure, MetLife felt its only option was to get out of the life insurance business.

MetLife could take this action because life insurance is no longer a core business of the company; in fact, this action will theoretically allow the company to increase short-term profits. The real question is: What is going to happen to those companies for which the sale of life insurance and annuities is their core business? What options will they have? What cost will they have to pay just to stay in business; if they can?

MetLife’s action is not an outlier, but only the first concrete example of the long-term damage that can be inflicted on the industry when companies abandon long-term thinking for short-term results and returns. Unfortunately, the real losers will be the insurance industry itself and consumers who need, seek and are willing to pay for guaranteed long-term protection and value.