Edition

Dare to Lead

By Bryon Robidoux

The Stepping Stone, January 2024

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On Oct. 17, 2023, the Joint Risk Management (JRM) and Leadership & Development (L&D) sections held their regular book club session. The book of choice was Dare to Lead by Brené Brown. We had a great conversation among 20+ participants scouring the book and relating it to our work and personal lives. Hearing how the book helped people navigate complex leadership and life issues was outstanding.

Dare to Lead is a great midpoint between the hard skills you might expect from JRM and the softer skills of L&D. Now, I agree with Simon Sinek when he says that calling them soft skills diminishes their importance. They are not soft skills they are human skills. Find me one company with superior risk management that does not have excellent people skills to back it up. As a leader and risk manager, motivating and getting the most out of everyone involved is vital.

Rumbling with Vulnerability

Brené defines rumble as “a discussion, conversation, or meeting defined by a commitment to lean into vulnerability, to stay curious and generous, to stick with the messy middle of problem identification and solving, to take a break and circle back, when necessary, to be fearless in owning our parts, and to listen with the same passion with which we want to be heard. Vulnerability is an emotion we experience during times of uncertainty, risk, and emotional exposure.” 

To rumble with vulnerability is to deal with the messy side of leadership, even when it is uncomfortable. When you are not rumbling with vulnerability, you are armored and protecting your feelings, and this can lead to operations or risk management issues.

For example, in our profession, we take a lot of exams. We pride ourselves on being intelligent and understanding the details of tricky problems. But this can also lead to real risk management issues for the fear of admitting that you made a mistake or do not know how to solve a particular problem. We must be vulnerable and be willing to accept that mistakes happen, both large and small. If an enormous error is made, this is more of an operational risk management rather than a personal issue because it implies that the proper controls are not in place. Solely blaming the individual is poor leadership and bad governance. Being armored makes it desirable to find a scapegoat.

As managers, it is imperative to admit your mistakes. If you want your direct reports to feel safe about admitting mistakes, then it is crucial to demonstrate the behavior. Otherwise, claiming a safe environment can feel like lip service. It’s easy to say that it is a safe environment to raise concerns, but culture and actions can say the exact opposite. Rumbling with vulnerability and admitting mistakes to your reports puts substance behind your words.

Living into our Values

It is essential to understand the values that you live by because they guide your behavior. Brené has an exercise to help you identify your values and narrow them down to just two to help you understand them at their core. Regardless of your values, you must be willing to live by them and practice them, which is essential at the personal and organizational levels. There must be rules and consequences to hold you accountable for your values. Daring leaders who live by their values are never shy about challenging topics. Bold leaders must be able to give and receive feedback. Now that there is safety and understanding that everyone makes mistakes, we must be willing to deal with feedback to correct these mistakes.

Brené gives ten rules for giving feedback, and I will provide a few examples. Brené knows she is ready to give feedback when she is ready to:

  1. Sit next to the person instead of across from them because otherwise, the conversation appears adversarial,
  2. Put the problem in front of her instead of between them so that they see the situation from a similar perspective,
  3. Listen, ask questions, and accept that she may not fully understand the issue,
  4. Acknowledge what they do well instead of just picking apart their mistakes, which can be demotivating,
  5. Own her part of the blame.

It is difficult to give feedback because you can be afraid of how someone will interpret it, but it is always more difficult to receive feedback. Now, this is one of my criticisms of the book. Brené does not give ten rules for receiving feedback. The section boils down to saying that you must keep an open mind on the feedback and realize that you are receiving so that you can grow.

According to the “Choicelogy” podcast episode “Fail Better,” we learn much better from praise than negative feedback because our ego is involved. Giving negative feedback is little better than giving no feedback. Recipients will likely ignore it because it is associated with pain. Pointing out how you have made similar mistakes is better (maybe someone else), as it allows the ego to be removed from the situation so the message is better received. Furthermore, this research invalidates the dung sandwich of “lead with good news followed by bad news followed by encouragement.”

Now, you could argue that if you let down your armor and rumbled with vulnerability, you should be able to withstand the criticism, but I would disagree. When Brené receives feedback from her staff, there is no power dynamic for her to be concerned with. She has total control. She can accept or ignore feedback. When she gives feedback, she has all the power in the relationship, which significantly explains her top-down perspective.

I am probably giving you a glimpse into my psyche, but I believe Brené’s perspective is due to her sitting at the top of her organization. However, giving and receiving feedback can be quite different depending on the power dynamics. How do you provide feedback to managers who possess the power? Hence, the backdrop for the MeToo movement. There are times when issues need upward management when the power dynamic is not in your favor. Receiving feedback is more difficult when you do not possess the power because your livelihood is on the line. Hence, I prefer the methodology of the “Choicelogy” podcast because it removes the ego and neutralizes the power dynamics.

Learning to Rise

How should we behave when discovering someone else has made a mistake? The answer to this problem comes from the Learning to Rise section of the book. When someone else makes a mistake or is not acting as expected, it is easy to jump to conclusions and make up an emotionally satisfying story. As actuaries, we make assumptions to help us solve problems. Our brains are prediction engines designed to fill in the gaps automatically. It is easy to think someone is incompetent or up to something. It is easy to become frustrated or angry. Brené calls this the “Shitty First Draft (SFD).”

Before we conclude someone is up to something or is manipulative, we need to understand the situation and get to the heart of the issue. We must stop ourselves from quick conclusions and dig deeper. We need to have empathy for the person and ask questions. We need to give the trust and respect that they did their jobs to the best of their ability. It could be that the person who made the mistake is armored and has their identity wrapped up in doing their job well. We need to give people psychological safety so they can admit the error without retribution. If people are afraid to admit mistakes, this is where the operational risk arises, which can then lead to expensive problems.

Curiosity

One concept I enjoyed in Dare to Lead, which is highly relevant to actuaries, is tying curiosity to vulnerability. It made me recall the January 2023 SOA Research Institute report, published in conjunction with Milliman researchers called “Fostering Innovation: A Guide for the Actuarial Profession.” This report summarizes interviews and discussion groups with select actuaries who have demonstrated innovative skills and among other outcomes, discusses some of the challenges with innovation in the actuarial profession.

In thinking about how free actuaries are to be curious, the section on traditional actuarial roles provided some interesting feedback regarding the difficulty actuaries in those roles face when trying to be innovative or creative:

[I]t is interesting to note that the stability and predictability of cyclic work may also be seen as a negative by employees in the workplace, especially concerning creativity and innovation… [I]nterviewees said there was a high tendency to follow rubrics and pre-established factors in traditional roles and organizations. Instead of thinking about improving processes, employees were expected to follow protocol and complete tasks as they had always been done. The actuaries’ supervisors and senior managers were not looking for risky innovation that might conflict with the interests of other key company stakeholders. Many shared that they found the company hierarchy frustrating because their bosses lacked the foresight and authority to utilize their new ideas to enhance existing processes.

In the same vein, participants expressed that it was difficult to innovate in their traditional actuarial workplaces because company leadership must be the ones to mandate change, not the employees. Even further, if a conventional actuary were to try to innovate independently from their supervisors, they risked overstepping authority and creating friction with coworkers and leadership.

As I think back to Dare to Lead, the fact that our industry is highly regulated, makes our profession—and the industry as a whole—very armored and afraid to make mistakes. As a profession, we do not have the psychological safety to be innovative, which gets engrained in our culture. It is no one’s fault. We have tons of responsibility to fulfill the promises that we sold policyholders.

Brené eloquently points out that:

Curiosity is an act of vulnerability and courage. Researchers are finding evidence that curiosity correlates with creativity. The brain’s chemistry changes when we become curious, helping us learn and retain information better. Curiosity is uncomfortable because it involves uncertainty and vulnerability. Curiosity is unruly. It disdains the approved pathways, preferring diversions, unplanned excursions, and impulsive left turns. In short, curiosity is deviant. We are scared to have hard conversations because we cannot control the path or outcome, and we start coming out of our skin when we don’t get the resolution fast enough. It is as if we would rather have a dysfunctional solution that leads to action than stay in the uncertainty of problem identification.

We are at a crossroads in our industry. We have evolved to create complicated products because of fierce competition from banks and outside sources. But internally, each company has an emerging risk, which we must mitigate. We have a challenging industry in that we sell products that might be on the books for 20, 30, 50, or more years. We have technology and processes that we must maintain for the life of these products.

We are caught in a cycle of ever more complexity happening at an ever-faster rate. As technology advances, regulators have us use more complex techniques to value our products and manage risks. As technology advances and competition fiercens, we create more varied and complicated products to compete and differentiate ourselves. As the product features become more complex, regulators require evermore complex techniques to manage the risk. Still, we also have the anchor of the past products, processes, and technology that we must maintain and support. These forces repel each other and make managing risk even more difficult.  

How do we rumble with vulnerability and keep the curiosity and innovation our profession needs to stay viable and competitive?

We must ensure that our risk management practices are not all about defensively protecting the company. When you boil down risk management practices, they mainly involve measuring and categorizing risk. This practice makes it feel like a defensive exercise, as witnessed in the dichotomy between current actuarial innovation and Brené’s descriptions of the requirements for curiosity.

We cannot take the Silicon Valley extreme of failing fast and breaking things because we have too much responsibility. But we should be creating risk management processes to create safety with allowances for creativity and innovation. The irony is that we inject risk into the system, thwarting our efforts by only playing defense. We must as a profession rumble with vulnerability and realize that we cannot know it all. We must look to other disciplines for help and sources of inspiration to help lead our industry into the future and adequately manage uncertainty.

Bottom Line

The topics above are just a limited view of what we discussed in the 90-minute book club meeting. Discussing these with actuaries from diverse backgrounds was great because these are the meat and potatoes of being an actuary. What gets lost in the exam process is that human skills are more important than hard skills, which our book club discussion topics helped drive home.

Communicating and coordinating with people allows you to gather the help and skills to complete tasks. But you will almost certainly fail if you believe you must know it all! Learning to lead others and be led by others is essential for leadership and developing your risk management skills.

The SOA Book Club has an exciting series planned for 2024. Watch for announcements for the next two sessions:

  • Feb/Mar: a book focusing on women in leadership, in celebration of International Women’s Day.
  • April: The Influential Actuary, by David C. Miller. You will get a chance to hear insights from the author on the discussion session!

Sign up for the SOA Book Club email list to stay on top of events and/or to indicate interest in volunteering.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.

Bryon Robidoux, FSA, CERA, MAAA, is assistant vice president at AuguStar Financial. He can be reached at bryon_robidoux@ConstellationInsurance.com or via LinkedIn.