What Matters to Employees
Lucia Rahilly kicks off by asking about what matters most to employees in driving strong performance. Brooke Weddle emphasizes the importance of clarity and simplicity. People want to know what they are accountable for, which leads to a sense of fairness. Simplicity often wins over loading too many factors into performance management. The role of the manager is crucial not only for evaluations but also for providing feedback and guiding employees on their development journey. However, managers often struggle to do this well at scale.
Bryan Hancock then highlights what good goal setting is not. It's not a sheet with 25 individual measures and complex weightings. Goal setting should be embedded in daily work, using tools like OKRs. Regular performance dialogues help employees understand their progress and focus on the critical few.
Goal Setting in a Portfolio Work Environment
In a world where jobs have become more portfolio-like, effective goal setting takes on a new dimension. It's about setting clear, achievable goals that are relevant to the portfolio nature of work. Managers need to help employees navigate this complexity and ensure that goals are aligned with the overall business objectives.
For example, in a marketing team with multiple projects, goals might be set for each project based on its importance and potential impact. Regular check-ins and feedback sessions help employees stay on track and make necessary adjustments.
Simplicity vs. Complexity in Performance Management
The research shows that it's not the ratings themselves that matter but knowing where you stand. Clear markers and indicators are more effective than ambiguous conversations about growth. Whether there are no ratings, a few ratings, or many ratings, how the system is implemented matters most.
For instance, a company that uses qualitative ways to describe progress during the pandemic found that employees were more motivated when they had clear feedback on their performance. This led to a focus on getting the execution right and improving the perception of fairness.
How to Approach Feedback
Lucia Rahilly asks about making feedback discussions simpler and more constructive. Brooke Weddle suggests setting a cultural mindset around continuous learning and prioritizing internal talent. Managers can also make feedback a part of daily work by creating rituals like weekly check-ins.
Bryan Hancock adds that managers often get burned out due to time constraints. They need to approach feedback conversations in a way that is both empowering and challenging. Instead of just pointing out mistakes, they should encourage employees to think about their actions and learn from them.
Hybrid Work and Manager Clarity
Lucia Rahilly wonders how hybrid work has affected managers' clarity about their employees' work. Bryan Hancock explains that periodic feedback is crucial, regardless of the work environment. Managers need to be deliberate about setting aside time for developmental feedback.
Brooke Weddle emphasizes the importance of thoughtfulness in understanding how work gets done relative to goals. In a hybrid environment, this becomes more complex and requires nuanced conversations between managers and employees.
Helping Managers with Challenging Conversations
Lucia Rahilly asks about facilitating better coaching for managers. Bryan Hancock suggests practicing challenging conversations and using gen AI to get feedback on feedback. This helps build skills and confidence.
Brooke Weddle also recommends simplifying processes. By taking a hard look at where value is derived, organizations can create more time for managers to focus on coaching and feedback.
Addressing Poor Performers
There is a need for early interventions and development conversations with poor performers. Managers should lean in when they see someone struggling and guide them towards improvement. But it's also important to have a fact-based record when it comes to removing people from roles.
For example, a manager might have regular one-on-one meetings with a struggling employee to understand their challenges and provide support. If improvement is not seen, a clear and objective record can be used to make difficult decisions.
How Important is Compensation?
Lucia Rahilly raises the question of the importance of money in performance management. Brooke Weddle highlights that more than half of respondents are motivated by a combination of financial and nonfinancial rewards. Nonfinancial rewards like growth opportunities and praise are equally important.
Bryan Hancock distinguishes between revenue-generating roles and other roles. In revenue-generating roles, compensation plays a more significant role, but overall, financial rewards matter in the broader context.
Reducing Bias in Assessing Impact
Lucia Rahilly discusses the gender pay gap and ways to reduce bias in assessing impact and performance. Brooke Weddle suggests looking at the "broken rung" where women are more likely to leave at certain levels. Organizations need to help women make transitions and pursue roles that lead to leadership.
Bryan Hancock emphasizes the need for unconscious-bias training and calibration meetings to ensure fair assessments. Managers also play a crucial role in guiding women to the right career tracks.
The Path Forward
Bringing it all together, Brooke Weddle is surprised by the importance of clarity in goal setting and continuous conversations. Bryan Hancock is hopeful that generative AI can help give managers more time and start a broader conversation about improving the performance management process.
Ultimately, it's about moving away from the bureaucratic aspects of performance management and focusing on the human element. By having clear goals, continuous feedback, and the right support, organizations can improve performance and employee engagement.
Uniting for a Sustainable Planet
Climate Warming and the Need for Action
Our climate is warming at an alarming rate, and if we don't take immediate steps, the consequences will be dire. The global energy transition is entering a new phase of acceleration, and more leaders are realizing the importance of addressing climate risks. It is essential that we work together to find solutions and set an example for a sustainable future. 1: The current pace of climate change is a wake-up call for humanity. We must recognize the urgency of the situation and take action to reduce greenhouse gas emissions. The global energy transition is a crucial step in this direction, as it allows us to shift from fossil fuels to renewable sources of energy. 2: By accelerating the global energy transition, we can reduce our carbon footprint and mitigate the effects of climate change. This requires a collective effort from governments, businesses, and individuals alike. We must invest in renewable energy technologies, improve energy efficiency, and promote sustainable practices.Net Zero and Emission Reduction
Net zero is an ideal state where the amount of greenhouse gases released into the atmosphere is equal to the amount removed. To achieve net zero, we need to focus on emission reduction and removal through decarbonization efforts. This includes reducing emissions from various sectors such as energy, transportation, and industry. 1: Emission reduction is a key component of the global energy transition. By implementing measures such as energy efficiency improvements and the use of renewable energy sources, we can significantly reduce greenhouse gas emissions. Additionally, carbon capture and storage technologies can play a crucial role in removing carbon dioxide from the atmosphere. 2: The global net-zero commitments are a step in the right direction, but more needs to be done. Currently, only a small percentage of emissions are targeted for reduction, and there is a need for increased ambition and action. We must work together to ensure that these commitments are met and that we move towards a net-zero future.Natural Climate Solutions
Natural climate solutions, or NCS, are nature-based actions that help protect, restore, and manage nature to further global climate goals. These solutions include activities such as reforestation, sustainable agriculture, and wetland restoration. 1: Natural climate solutions offer a unique opportunity to address climate change while also providing additional benefits such as biodiversity conservation and ecosystem services. By restoring and protecting natural habitats, we can enhance the Earth's ability to absorb carbon dioxide and mitigate climate change. 2: Reforestation, in particular, is a powerful natural climate solution. Trees act as carbon sinks, absorbing carbon dioxide from the atmosphere and storing it in their biomass. By planting more trees and protecting existing forests, we can make a significant contribution to reducing greenhouse gas emissions.COP and Climate Change Conferences
COP refers to the United Nations' annual conference on climate change. The 29th meeting, COP29, is scheduled to take place in Baku, Azerbaijan in November 2024. These conferences provide a platform for countries to come together and discuss climate change issues and develop strategies for mitigation and adaptation. 1: COP conferences are crucial events in the global fight against climate change. They bring together leaders from around the world to negotiate and agree on climate policies and actions. These conferences also provide an opportunity for knowledge sharing and the exchange of best practices. 2: The upcoming COP29 in Baku will be an important milestone in the global energy transition. It will provide an opportunity for countries to strengthen their commitments and take concrete actions to address climate change. We must ensure that these conferences lead to meaningful outcomes and that countries work together to achieve our climate goals.Decarbonization and Renewable Energy
Decarbonization is the reduction and removal of carbon dioxide and other greenhouse gases from the atmosphere. Wind energy is a renewable source of electrical or mechanical power that can play a significant role in transforming the energy sector. 1: Wind energy has the potential to provide a large portion of our energy needs in a sustainable manner. By harnessing the power of the wind, we can reduce our reliance on fossil fuels and decrease greenhouse gas emissions. Wind farms are becoming more widespread around the world, and technological advancements are making wind energy more efficient and cost-effective. 2: In addition to wind energy, other renewable sources such as solar, hydro, and geothermal energy also offer significant potential for decarbonization. These sources of energy are clean, sustainable, and can help us achieve our climate goals. We must continue to invest in renewable energy technologies and expand their use to accelerate the global energy transition.Biodiversity and Sustainable Ecosystems
Biodiversity is the multitude of diverse organisms across an ecosystem. It is essential for supporting the health and sustainability of all life on Earth. Sustainable fuels made from renewable materials can help reduce our dependence on fossil fuels and protect biodiversity. 1: Biodiversity is the foundation of healthy ecosystems and provides numerous benefits such as pollination, water purification, and climate regulation. Protecting biodiversity is crucial for the survival of our planet and the well-being of all living beings. 2: Sustainable fuels play a vital role in reducing our carbon footprint and protecting biodiversity. By using renewable materials instead of fossil fuels, we can reduce emissions and support the development of sustainable industries. Biofuels, green gasoline, and hydrogen-based fuels are some examples of sustainable fuels that offer promising alternatives.Scope 1, 2, and 3 Emissions
Scope 1, 2, and 3 emissions are greenhouse gases that are released across an organization's entire value chain. Scope 3 emissions are the most complex, as they are released before and after a product is delivered or consumed. 1: Understanding and managing emissions across the entire value chain is crucial for achieving climate goals. Scope 3 emissions often account for a significant portion of an organization's total emissions, and addressing them requires a comprehensive approach. 2: By identifying and reducing Scope 3 emissions, organizations can make a significant contribution to climate change mitigation. This requires collaboration with suppliers, customers, and other stakeholders to ensure that emissions are minimized throughout the value chain.The Global Stocktake
The global stocktake is an assessment of progress made toward mitigating global warming since the Paris Agreement in 2015. The results from the first-ever global stocktake were discussed at COP28. 1: The global stocktake is an important tool for monitoring and evaluating our progress in addressing climate change. It allows us to assess the effectiveness of our policies and actions and identify areas where further improvement is needed. 2: The results of the global stocktake provide valuable insights into the challenges and opportunities facing the global energy transition. They help us to set more ambitious goals and develop strategies for accelerating progress.Uncover the Opportunities and Challenges in Personal Insurance
Personal Lines Property and Casualty Insurance: A Quarter of Global Premiums
The personal lines property and casualty (P&C) industry holds a significant position, writing about a quarter of the world's insurance premiums. It provides essential protection wherever people are. However, recent global disruptions like the pandemic, rising costs, and natural disasters have also impacted this industry. These challenges present both difficulties and possibilities.In 2022-23, personal lines P&C insurance premiums grew by 9.5 percent to $1.1 trillion, outpacing nominal global GDP by half a percentage point. But its relevance, measured by gross written premiums as a share of nominal GDP, remained below prepandemic levels. The coverage gap between mature and emerging economies also widened.
In developed markets, industry growth was mainly driven by rate increases, suggesting limited expansion into new risks. This indicates the need for carriers to innovate and expand coverage.
The Personal Lines P&C Industry Opportunity
While premiums are growing, insurance affordability has become a significant concern. In some regions like the United States, the rising cost of home coverage has outpaced income growth. This is due to factors such as rising asset prices, increased repair costs, and more frequent damage, especially in high-risk areas. And as many regions face similar issues, rising premiums could spread.We believe these challenges offer an opportunity for carriers to innovate and increase the industry's relevance. For example, in the United States, we expect premiums to grow by 11 percent annually through 2025 as combined ratios decrease by more than eight percentage points.
A Changing Landscape with Challenges and Opportunities
The big trends disrupting the industry are not going away; they may even intensify. Mobility trends, from electric vehicles to autonomous vehicles, are changing auto insurance and have the potential to disrupt the sector. Natural disasters are becoming more frequent, severe, and volatile, expanding the gap between what is protected and what isn't.Some economies in Latin America and Asia have the potential for growth and may enter conditions that allow for greater insurance coverage. The aging global population and evolving customer purchasing patterns present opportunities for carriers to rethink their offerings. And evolving technology, especially AI and generative AI, can further spur innovation.
Three Archetypes to Find and Enable Growth
Individual carriers are making choices and shifting their business models. We see three major carrier archetypes emerging.Core, at-scale players focus on insuring traditional coverage. Leading carriers use their national scale, broad distribution network, and brand strength. As competition increases through various means, they need to ensure technical excellence.
Innovators expand coverage through specialized products. They sell specialized products through newer channels and insure new risks that the industry has not yet addressed, such as EVs or high-risk home exposures.
Targeted players differentiate through marketing, distribution, and servicing. They rely on their strong brand and networks in traditional product segments to meet customer needs and offer excellent customer service in a specific geography, through a specific channel, or to a specific segment.
These archetypes are not mutually exclusive. Future winners will likely leverage their core position to expand into adjacent areas while innovating in specific niches. This requires a comprehensive growth system. Overall, the industry's outlook is positive, and players will seek to innovate and expand coverage for profitable growth.