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Leadership Meltdown: Atrophy Or Recovery?
Hundreds of thousands of small to medium-sized businesses that form the foundation of our economy were founded and managed by honest, hard-working entrepreneurs. For many of these stalwarts in business, ethical behavior isn't something they learned in a seminar — it's natural. It's who they are. Jack Burke explains that good leaders don't manage numbers; they have the tools for a deeper understanding of business as it relates to society. Warren Bennis has been the proverbial leader when it comes to leadership, having written more than 25 books on the subject during the past 40 years. In Old Dogs, New Tricks, Bennis wrote: “Today's leader has to take into account all of the stakeholders and not just the shareholders. The individual has to create a balance among these groups, despite the fact that, collectively, they might have conflicting objectives. Leaders must pay attention to the goals and purposes of the corporation and ask the question, ‘To whom is the business responsible?' Many executives might say the shareholders — and no one else … but that overlooks other stakeholders, including employees, customers, and the community.” Those powerful words, written in 1999, perhaps have even greater meaning today. Leaders of major corporations have destroyed the confidence of the greater community through unbridled self-interest and unethical manipulation of numbers to benefit share value. Is our society that amoral and unethical? I believe not. But I do believe that many of the “Baby Boomer/MBA” generation of leadership lack the essential building blocks of character. Back in the 60s, colleges were overflowing with students for any number of reasons — including rising parental wealth and the Vietnam War. The students who were driven to success focused totally on their career niche. Specialty schools within the colleges flourished like trade schools in a blue-collar town. Liberal arts curricula, according to the more focused students, were populated by the great unwashed — those evading the draft or undecided about their life goals. Upon graduation, business majors — like premeds — immediately went on to gain their MBAs at the most prestigious schools possible. Two years later, corporations competed for these highly trained young MBAs. Organizations such as RCA created “Fast Track” programs to quickly acclimate them to their corporate entities and move them into executive offices. Today, many of these “fast-trackers” are corporate CEOs. Unfortunately we have a generation of highly skilled business technicians who are lacking in the people skills of leadership. They manage numbers (or mismanage them, as the case might be), but don't have the tools for a deeper understanding of business as it relates to society. In the past, business leaders often grew in wisdom through the experience of building their business. Their people and leadership skills often surpassed their financial acumen, which they shored up by hiring the necessary professionals. Companies were valued for their products, their managerial expertise, and their profitability. Stock value generally reacted to those factors. An efficiently managed company with a good product and reasonable profits could be expected to have a fair stock value. Now that doesn't mean that the past wasn't rampant with “cooked books” and financial scams. Corporate skullduggery has been a fact of life from the Railroad Barons to the S&L debacle, and the days of Milken. After all, power and greed are hungry bedfellows. This brings us back full circle to today. Recent events such as the Enron scandal somehow seem more sinister. Seldom have corporate bandits pillaged every aspect of the business culture — employees, clients, investors, and the community. There seems to be a blatant disregard of everyone and everything. Employees lose not only their jobs, but their future financial security. Clients are not only overcharged, they're raped. Investors are merely available pockets to empty, and the community is left holding the bag. Several years ago, I had the privilege of hosting Warren Bennis at my office for a day. Our conversation naturally veered to the state of business leadership. Warren said that if he had to do it all over again, he'd do it differently. He had come to realize that a liberal arts education opens the mind to the wonders of art, history, and literature: Wonders that help to form the basic character of an individual providing an education that first teaches one to “think,” and then later to “do.” Warren felt, and I agree, that MBA candidates should be required to first obtain a liberal arts education followed by at least four years experience in the workplace. Then the MBA program should be four years on an alternating work/study basis (six months of school, followed by six months of application experience at work). The net result: Potential leaders with a broad-based education supporting their technical skills, and all of it wrapped in experience. Obviously, this would only be a first step in addressing the problems of today, but it could be a significant step toward building a better future. We need leaders with character. We need leaders who are devoted to the business of their business. We need leaders who understand, appreciate, and nurture the symbiotic relationship between company, employees, clients, and community. We need leaders who understand that stock value should only be one benchmark of their business, rather than thinking that their business is the manipulation of the stock value. We need leaders who are not only intellectually aware of ethics, but are personally committed to ethical behavior. We need leaders who walk the walk while they talk the talk. Is this pursuit of good leadership a pipe dream? I think not. Just look around at the hundreds of thousands of small to medium-sized businesses that form the foundation of our economy. The vast majority were founded and managed by honest, hard-working entrepreneurs. For many of these stalwarts in business, ethical behavior isn't something they learned in a seminar — it's natural. It's who they are. I've also seen a groundswell of spirituality beginning to surface in the business arena —not religion, but spirituality. Although religion might provide the underpinnings, I'm talking about the essence of human behavior. This behavior supports the positive facets of an individual, puts the greater good ahead of individual gain, empowers one person to benefit another, and penalizes (rather than rewards) avarice and greed. We've all been victims of an egomaniac at one time or another. Their self-inflated ego limits their educability. Their only concern is self-interest. I think of “ego” as an acronym for “Edging Goodness Out.” Self-serving ego doesn't drive great leaders. They acknowledge a vested interest in all five components of business: Company, employees, clients, investors, and community. They consider themselves to be benevolent servants of the business: A worker among workers. In 1994, I finally got to know neighbors whom I had lived amongst for years. It wasn't any outpouring of community spirit on my part; it was the Northridge CA earthquake. We came together in adversity to help each other, putting the interests of the community ahead of our own petty frustrations. On 9/11, we again witnessed the world coming together in a common spirit when facing horrendous terror. As one neighbor asked in 1994, “Why didn't we come together before there was a tragedy?” These are the events of history from which we need to learn. We should seek out the joy in events and people that cross our paths. We should look for commonality in spirit and set aside the negative temptations that surround us. Leaders should set examples for us to emulate as they guide us toward the greater vision. It's been said that the true worth of a person is measured by friendships, not money, power, and prestige. Because friends help one another in good times and in bad, it's time to concentrate on building the wealth of friendship through caring consideration. If we wait until we need a friend, it might be too late to make one. Although greedy and dishonest behavior will always be with us, these can become rare — if we all commit ourselves to working for the greater good. There's more to leadership than first meets the eye.

Replacing An Old Policy With A New One — Part 2
The Board of Directors of the American Society of CLU & ChFC has just approved a new educational product, the Replacement Questionnaire (closely akin to the Life Insurance Illustration Questionnaire). In this second of a three-part series, Richard Weber reviews this educational concept and its timeliness in this market environment. Policy replacement might account for as much as one-third of all individual insurance policies sold. Stephen Brobeck, President of Consumer Federation of America, suggested in a National Underwriter article that consumers lose $6 billion a year in surrender charges and costs — presumably associated with replacing existing coverage. Although it’s difficult to gather historical statistics, I suspect this level of replacement has been going on since the mid-1980s. One of the most critical issues is that of replacement. Indiscriminate replacement hurts the policy owner, the ceding carrier, and even the accepting carrier — they’ll eventually become the ceding carrier on the next 'roll.' And it certainly has a negative effect on the industry. The 'hurt' can be economic. But if the policyowner develops a subsequent sense of having been 'taken,' this is a problem that we all share and is harder to measure. Although we’re pretty sure what replacement is (you think you know it when you see it) the long list of technical definitions of replacement might surprise you. Not only does it cover the obvious replacement of a new policy for an old, it includes applying for Life insurance while exercising the right to borrow from an old policy. A Term conversion is technically a replacement, as is dropping a waiver of premium or ADB while applying for new coverage. Reducing the face amount of a policy or placing it on APL is also a replacement if it coincides with the purchase of a new policy. Sometimes it boils down to the fact that it might seem easier to find a prospect with an existing policy to replace than to take the time to go through the entire Life insurance needs process. And policy illustrations and their unique tendency to give the impression of a predictable future have certainly aided the process of convincing the client and the agent that a replacement is to the client’s benefit. Consider for a moment just this type of replacement: When an agent recommends that a prospective client terminate an old policy in favor of the 'new, improved' version, a whole range of questions arises. Has the old carrier encountered problems that suggest it can no longer be relied on to deliver the death benefit? Or does something suggest that they can’t deliver the death benefit as economically as broad economic conditions might allow over the long term? Is the recommendation based on exhaustive research, or a 'gut' feeling on the part of the agent? If the old policy is to be replaced, what are the replacement rules established by the state of domicile? In California, for example, not following the rules can cost the unwary agent a $25,000 fine! Are the reasons for replacement economic, subjective, or both? In the final analysis: Is this policy replacement being recommended because it’s in the best interest of the client or the best interest of the agent? One of the reasons replacement is a problem is that there’s no standard approach to quantify the issues surrounding replacing one policy with another. There can be a mighty fine line between a justified replacement and a not-so-justified one. When I came into the business, the most I was ever told about dropping one policy in favor of another was that when it was done to you it was 'twisting' and illegal; but if you did it, it was just that kinder and gentler term, 'replacement.' For this reason the Board of Directors of the American Society of CLU & ChFC has approved a new educational product, the Replacement Questionnaire. And, as an educational concept closely akin to the 'IQ,' the 'RQ' — as it has been dubbed — is a timely concept in this market environment. The Society wanted its members to be able to deal with the fact that there’s no single resource for Life insurance salespeople to address the many issues that they should review before talking to a client about a possible replacement of policies. Although addressed to members of the American Society of CLU & ChFC, the RQ is an educational tool that should be utilized by anyone who is reviewing a recommendation for replacement: agent, client, advisor, or carrier. The introduction to the Replacement Questionnaire emphasizes that replacing an existing Life insurance policy with a newer one is generally not in the policyowner’s best interest. Changes in health and age are two obvious reasons. Less obvious is the fact that duplicate sales loads and other expenses would be incurred: once during the initial purchase, and then again when the replacement has been performed with a newer policy. There have also been a number of changes in the tax code over the years, many of which 'grandfather' policies purchased before a certain date. Another aspect of replacing a policy is that the 'new' Life insurance company has substantial rights to challenge a death claim if death occurs within two years from the date of issue. Policyowners and insureds must clearly understand this point. The 'RQ' form is similar to the flight list that pilots use before they take off. No matter how many thousands of hours they’ve flown, they must review the list to make sure that critical details affecting the safety of the pilot and passengers have been checked. So, too, does the professional Life underwriter wish to make certain that the client’s best interests are being served by reminding ourselves to address the major issues surrounding replacement. The items listed in the Replacement Questionnaire are not intended to create an opportunity to replace one policy for another; the RQ emphasizes several different times that it’s generally not in the client’s best interest to pursue such a strategy. Rather, these items make sure that the agent can examine the important issues safely and economically. Some Life insurance agents might use the RQ for their own process of deciding what’s right for the client. Others might share it with the client. In the latter case, the Replacement Questionnaire list of items for consideration are not a substitute for state law requirements and should only be used to supplement required forms and duties. REVIEWING THE RQ The first section of the RQ lists the issues that come up frequently when considering replacement. They include the possibility that a newer policy might have more favorable values in the future. The RQ reminds us to distinguish between guaranteed values and illustrated values. This section explores whether the reason for replacement might rest with the appearance of a shorter out-of-pocket payment period, better underwriting class, more favorable carrier ratings, or the desire to move to a variable form of insurance — or from a variable form of insurance. (Note, if you’re applying the RQ to a Variable Life insurance policy, and if you’re showing the RQ to the client, you must first obtain your Broker-Dealer’s approval). It’s important to point out that while the issues of greater cash value, shorter payment periods, superior ratings, etc. might be valid considerations, there’s no intention to promote the idea that any issue or combination of issues is a reason to replace an in-force policy. These issues must be taken in context of the other items in the RQ. Again, replacement is generally not in the best interest of the policyholder and the professional Life insurance salesperson will want to underscore that statement to the client directly. The next section of the RQ determines whether the agent has reviewed the sister IQ of each carrier for additional information to assist in understanding the assumptions that underlie the illustrations of both the in-force and the possible new policy. Confirming the review and allowing for the possibility of generally similar responses can be a key factor in recommending against replacement. It’s especially important in looking at an IQ of two different products to understand if current illustrations are based on similar assumptions. Do both companies use the portfolio method for illustrating yield, or does one use the portfolio method where the other uses investment generation method? Does either company assume future mortality improvements or expense reductions? There can be many other substantial differences in illustration assumptions. A thoughtful review of the IQs should be considered, and to be perfectly objective in the process, it might be appropriate to invite each carrier to comment on your analysis. After all, if replacement is truly warranted, it’s in the best interest of the client as well as the agent to allow the carriers to comment on and confirm your recommendation.

Prospecting Motivation
PROSPECTING MOTIVATION Successful prospecting relies upon motivational discipline; it's the single most important contributing factor to it. Prospecting requires discipline, not as in punishment, but rather as a systematic approach and a desire to push forward. This internal drive is motivation. Some people consider super-charged emotional hype seminars to be the epitome of motivation. In reality, there isn't much merit to this kind of motivation; if it worked, people could experience it one time and never have to repeat seminars. Every person possesses motivation; it's what inspires individuals to carry out tasks. It impacts how the task is done, if at all. And, like any decision, motivation is greatly influenced by pain avoidance. An unmotivated person is avoiding pain. For a more in-depth look at motivation and how it influences prospecting activities, Edwards Holliday, President, Creative Achievement Concepts, was interviewed. Holliday's interesting perspective on motivation directly conflicts with the concepts of Eaglemark Consulting Group, but the viewpoint is viable, credible, and worthwhile. However different Holliday's message is, study it carefully to firmly implant the concepts and realities. Do You Have What It Takes? by Edwards A. Holliday Creative Achievement Concepts What is the common denominator of success; a trait or quality that all of the following people possess: Abraham Lincoln, Alex Haley, Helen Keller, Hank Aaron, Amelia Earhart, Florence Chadwick, Gregory Peck, Bill Cosby, Bob Hope, Sir Winston Churchill, Thomas Edison, Joe Frazier, W. Clement Stone, Lee Iacocca, and Vince Lombardi? Why are these people, and other famous individuals, so well-known for their accomplishments? What was the driving force behind each that compelled them to achieve greatness? Simply stated, these individuals were self-motivated. From the moment of birth, individuals are exposed to others' likes, prejudices, preferences, attitudes, and behaviors through the long process of conditioning. However, while humans are products of their environment, the power of choice always exists. Individuals can't always control the environment, but they can control their thoughts. As William James said in the book, As A Man Thinketh, 'As a being of power, intelligence and love, and Lord of his own thoughts, man holds the key to every situation and contains within himself that transforming and regenerative agency by which he may make himself what he wills.' This is called personal responsibility for one's motivation. Self-motivation is a reason to move, a reason to take action. Motivation vs inspiration Motivation should not be confused with inspiration. Inspiration is temporary, it wears off. Inspiration is like perspiration, it evaporates quickly. A person who is truly self-motivated generates an aura of energy and enthusiasm for life; it comes from within. Relatively few individuals are truly self-motivated-that's why those who are self-motivated stand out from the crowd-that's why their qualities are so highly desirable and sought. Self-motivated people know who they are, where they've been, where they're going, and how to get there. They know their strengths and their weaknesses, their assets and liabilities. Self-motivated people forget the past and press forward into the future. They focus on their powers and not their problems. Self-motivated people don't watch things happen or wait for things to happen, they make them happen. If self-motivation comes from within and can be generated by anyone, at anytime, in any place, and in any environment, then why are so few individuals examples of supreme self-motivation? The answer is simple, but the solution is difficult. It's hard work! Individuals are complex. They have egos, needs, desires, emotions, problems, limitations, influences, and so on. These obstacles prevent individuals from tapping their full potential, -- their self-motivation. Path to Motivation Some people think that motivation is just bells and whistles, something that is obtained overnight by going to a seminar or reading a book. That may be the start of it, but it's certainly only an outline of the whole picture. The path each person walks in life is a process in learning and growth which can be changed, accelerated, and improved upon to deliver better results. For instance, an acorn is about the size of a quarter and weighs about an ounce, but it has the potential of becoming a towering oak, 100 feet high, weighing thousands of pounds, able to withstand the elements of wind, sleet, and freezing weather. The acorn does not become an oak overnight. As a seed, it will either use its resources of earth, sun, and water, and live to grow, or it will rot and die. Use resources: talents, abilities, other people, institutions, nature, time, etc. to live and grow-or choose to remain unchanged, stagnant, and apathetic. As the acorn grows, it becomes a sapling, the sapling becomes a mature tree, and the tree produces! The tree is always in the process of change, growing and dying, as it loses its leaves in the fall, and grows new buds in the spring. The great oak will continue to live and grow until the day that the sap refuses to travel up the trunk, starving the branches. It declines and dies. Likewise, people are in a process of change, physically and mentally. On the outside, they are always growing new skin, hair, and nails. On the inside, people are always assimilating new information and experiences; they are continuously modifying attitudes and behaviors. The sap that fuels production is self-motivation. Without it, humans die, not physically, but emotionally, and shortly thereafter, mentally. The light at the end of the tunnel Some people walk around with a pulse, but without an emotional heartbeat: Nothing stirs them inside. Nothing excites them, except the coming of the weekend and simple pleasures. They're living for two days a week, instead of seven. Why do they dread the other five? They have no purpose, no goals or ambition. It's a chore for them to rise in the morning. Listen to many of the excuses that are verbalized: 'It's not my fault. I didn't do it. I don't have a college education. My parents didn't love me. The economy is down. No one is buying. I can't do it. I was born into a poor environment. People just price shop, what's the use?' Self-motivation comes from a need to express oneself by means of activity, creation, and emotion. It's a burning desire in a person's gut that acts as a compelling force to take determined action again and again and again until the desired goal has been achieved. When a person begins to see the light at the end of the tunnel, when turning on instead of turning off begins, something amazing happens. The vision of the end result makes the benefits and pleasures that can be gained real. The losses or pains that you will avoid also become tangible. These are the only two reasons any person chooses to take action on any matter: anticipation of gain or pain avoidance. The more a person focuses, the clearer this becomes. The clearer the goal, the more believable the benefits. Benefits and losses from goals motivate people. People either create benefits and losses for themselves for their own reasons, or someone else creates them for their reasons. If people create their own results, and have a clearer understanding of what will be gained or avoided, then they will be motivated by their own attitudes. When individuals know what's in it for them, they know why they want something, what's important to them, and how they're going to feel when they have it. Figuring out what a person wants, why it is wanted, and the feeling of getting it should all be relatively simple; but it's not. In today's society, people are surrounded with so many options, opportunities, information, and influences that it makes choosing difficult and confusing. The challenge, as author Paul J. Meyer states is, 'If you're not making the progress you would like to make and are capable of making, it's simply because your goals are not clearly defined.' Goal setting is the strongest human force in the process of developing self-motivation. If you take action on the ideas presented, chances are that will become a champion. You can achieve if you think you can. As coach Bear Bryant said, 'If you think you're better, you are; if you think you dare not, you won't; if you like to win, but don't think you can, it's almost a cinch that you won't.' Just being involved in this continuing-improvement program guarantees the special opportunity to excel. What a person does with that opportunity will, in a large part, reflect the quantity and quality of self motivation. As asked in the title of this article, 'Do You Have What It Takes?'