Some Executives Never Learn: Competition Breeds Excellence
For insurance companies – as with most companies in any industry – the path to long-term marketing success is more likely to be achieved when the leadership recognizes and operates on the basis that the company must earn the business, respect and loyalty of its distribution system. (This is especially true if the company depends upon independent agents for its business.) When an insurance company takes actions and exhibits an attitude that it is entitled to the business written by its distribution system, it is a telltale sign that the leadership of the company is lazy or incompetent (or both) and the only strategy they know is one of corporate arrogance.
If a company is large enough and the competition is relatively anemic, it can be tempted to implement an entitlement strategy by demanding — under threat of withholding product — that it be the primary company of the distribution system. This approach might seem to be an effective use of corporate leverage against the distribution system and may bring short-term results. But in reality it is nothing more than a self-destructive act of folly. The reality is that such action sows the seeds of contempt and loss of respect by the distribution system toward the company and that will ultimately work against its success.
The dimwitted, arrogant executives who use corporate leverage to implement an “our way or the highway” mentality, openly acknowledge their weakness and short-term focus. Worse, they demonstrate an inability to develop new products and services that will earn the business, respect and loyalty of the distribution system. Instead, they are clearly intimidated by the idea of free and open competition.
The travesty in this situation is that a company that demands the support, respect and fidelity of the distribution system is the least likely to offer the same in return. The executives of these companies often display a capricious mentality that leads them to believe they have carte blanche to act unilaterally and with impunity on distribution system issues. The mendaciousness of these insecure executives, who know only the stratagem of corporate coercion, prevents them from understanding that they do far more long-term damage to their company and their own future than simply causing the distribution system to lose respect for them and the company.
This attitude of corporate entitlement is best diagnosed as the “Tonya Harding Syndrome.” If you recall, Harding was America’s preeminent figure skater leading up to the 1994 Winter Olympics in Norway having won the U.S. Figure Skating Championships. Her Olympics archrival was Nancy Kerrigan. But rather than putting forth the effort to improve her own skills and convince the judges of her superior talent, an insecure Harding allegedly conspired with her ex-husband and a couple of goons to “break the legs” of Nancy Kerrigan to eliminate her from the competition. The strategy worked in the short term (Kerrigan’s injuries forced her to withdraw from the Olympics) but it was a self-destructive act on the part of Harding that earned her nothing but long-term enmity from the skating community and for that matter, from the whole world. The same fate awaits those indolent and bungling executives who, filled with the haughtiness of corporate power, believe that the best way to win a race is to eliminate the competition, rather than to outperform it.
More Than a Convenient Metaphor
These executives fail to understand that nothing dulls the edge of competitiveness more than the lack of competition and challenge. Competition is, in fact, healthy and should be welcomed, not feared. Without competition there is no challenge to be your best. The competent and confident executive will welcome unfettered competition as an effective tool to challenge himself and his company to be the best they can be. Meeting competition head-on, rather than trying to hide from it, is the best way to measure one’s leadership and the performance of the company.
A company will ultimately do best when its leader instills a philosophy that it is not entitled to anything and must earn the business it receives. The corporate power should be used as an advantage to gain access to the distribution system in order to present its story and to acquire “shelf space” for its products, but never to exhibit the blatant attitude of entitlement. The only thing a leader has a right to demand is that the company be in a position to present its products and services to the distribution. If that is not enough to earn the business, the leader should recognize that more needs to be done.
The power and resources of the company should be marshaled to constantly strive to provide the most creative and value-laden products and support services available to the distribution system. If the distribution turns to other producers or products, it should not be viewed as a sign of disloyalty on the part of the distribution system, but that greater efforts are needed to earn the business. When a company employs blatant bullying to extract business from the distribution system it sends a message – easily understood by the distribution system – that the company is not confident in its own ability to meet and beat the competition head on.
Those leaders and companies who are confident enough to dedicate their efforts toward earning the business produced by the distribution system are the ones who in the long term will earn the respect and loyalty of the producer; along with their business.
And the Moral of the Story …
There are two types of leaders: One type seeks to use the power of position and the resources available in an effort to earn the respect, following and support of those associated with the organization. The other type of leader acts as if those same powers of position and resources entitle them to demand the respect, following and support of those in the organization.
The leader who believes that entitlement is a perk of power and position will infect the organization with that same attitude and the result will be actions taken by the organization to flaunt its power. In the end this will lead to self-destructive actions that serve only to expose the incompetence of the leader and the arrogance of the company. Psychologists will tell you that when individuals and companies act in self-destructive ways in order to experience the passing stimulation of short-term results, it is because of a fundamental insecurity about the future. This certainly seems to describe a company that acts with an attitude of entitlement to today’s business, rather than seeking to earn the business, respect and loyalty of the distribution system in a way that will assure a strong future.