August 2015

From The Chair

By Thomas L. Totten

Tom2 On Friday, July 24, I had the pleasure of having my Board of Directors approve its first startup under the corporate umbrella, an achievement of intrapreneurship. This path was started in 2006, and enhanced in 2008, based upon a conversation I had with our retiring CEO and actuary Daryl Dean. He told me an interesting story regarding retirement and how dollar cost averaging is great accumulating, but it stinks when you are “decumulating.”

This conversation was followed by another conversation with my retiring father and when he should start taking his pension benefit. I recommended he delay retirement due to the past history of longevity within our family. As I anticipated, he completely ignored his pension actuary’s son advice for his own reasons. One had to do with his company and its situation, but I am sure the second had to do with his son (whom he remembered sticking a paper clip in electrical outlets when he was younger).

Ultimately, these conversations led to the formation of the new company and its mission regarding retirement. However, while the mission may be retirement, the plan was put into play using three different books to which my studies had led me. They are also the reason for this article. The Innovators Dilemma by Clayton Christensen (the founder of the theory of disruptive innovation), The Lean Startup by Eric Ries (an application of the theory to some extent) and Made to Stick by the brothers Chip and Dan Heath.

The Innovators Dilemma gives a strong theoretical basis to how companies can achieve disruption. I love theory since it can explain observed phenomenon and hopefully is also substantiated with causal information. The Lean Startup is more applied and less theoretical. It shows how experimenting can help you determine the cause of an action by a customer. Finally, Made to Stick gives a nice marketing touch to the whole product and how we can use simple, concrete tools to help people buy our product. If you haven’t read these evidence-based books, I highly encourage you to do so.

Finally, as a somewhat unabashed Clayton Christensen fan, I recommend an article he wrote for Harvard Business Review that summarizes a speech he gave to graduating students: You won’t regret reading it.

Thomas L. Totten, FSA, Ph.d., is a consulting actuary. He can be contacted at