Actuaries as Entrepreneurs – Have you got what it takes?
Are you radical? Visionary? A risk-taker? Then the common perception is you have what it takes to be an entrepreneur. But is there more in the make-up of an entrepreneur than just these characteristics, and can they be learnt or must you be born with them?
Googling entrepreneurial skills generates a relatively consistent list. According to Forbes, The New York Times, The Sydney Morning Herald and www.entrepreneur.com (yes there is even a website for budding entrepreneurs) the list includes: passion, vision, tenacity, willingness to take risks/not afraid to fail, self-belief, can see the big-picture, skilled analytical problem solvers, willingness to work hard, determined, flexible/adaptable and effective with people. We can see these traits in some well-known known entrepreneurs we frequently read about.
Mark Zuckerberg (with fellow co-founders) launched Facebook whilst they were still at Harvard. He is renowned for having the passion and determination to bring his innovative social media idea to fruition. Steve Jobs’ tenacity and absolute focus and dedication were key to his success at Apple. Whilst Steve was not particularly well known for being effective with people, many other entrepreneurs credit communication, networking and collaboration as being key to their success. Oprah Winfrey epitomised these skills, creating not only a very successful talk-show program but also founding the thriving Harpo Studios.
Closer to home, Aussie Janine Allis, founder of Boost Juice, was passionate about bringing fresh juice to the broader market and credits her success partially from networking and collaborating with others, learning what she could from other people. Dick Smith combined his passion for Australian owned foods with his determination and ability to think differently to set up a number of businesses including Dick Smith Electronics, Australian Geographic, Dick Smith Foods and film production company Smith&Nasht.
A number of actuaries have been entrepreneurial, identifying an opportunity, envisaging a way to take advantage of that opportunity and then having the self-belief and determination to take a risk and set up a company to target the opportunity. Some examples include – John Dewan in Chicago who set up a number of companies that captured and summarised real-time sports statistic data. Mike Miele saw the opportunity to provide consulting services to pharmaceutical companies to help them better meet the needs of Managed Care Organizations. He founded Capitated Disease Management Services in 1995. In Australia, in the early 90s, Mark Schneider co-founded Classic Solutions that developed the MoSes financial platform used by more than 300 companies in the insurance industry. More recently in 2002, Adam Driussi co-founded Quantium, a company specialising in data analytics.
Can these skills be taught?
Can entrepreneurship be taught or are you born with these skills? Over the last year, whilst looking for suitable interns to work for our company, I was surprised to find there are in fact a number of degrees and post graduate courses at some prominent Australian Universities offering courses in entrepreneurship. Sydney University offers a degree in “Strategy, Innovation and Entrepreneurship” and Melbourne University offers a Masters of Entrepreneurship. Tertiary educators obviously recognise the growing demand for these skills and feel that they can be taught.
Revisiting the list of entrepreneurial skills, it is evident some actuarial skills are transferable. Analytical thinking is a fundamental facet of actuarial training – being able to consider a problem from different perspectives in order to solve it. We are taught to consider the big picture and to convert complex concepts into simple messages. The attributes of being hard working and able to focus for prolonged periods should also resonate with actuaries; any actuary who has laboured through the actuarial exams, often whilst working, (and some of us also had babies), can attest to having the ability to focus and work hard!!
Which does leave a number of other soft skills – visionary, adaptability, communicating, networking, passionate, risk-taker/ not afraid to fail. Some of these may not come naturally to actuaries and our training may in fact hinder the development of these skills. For example, being a risk-taker. As actuaries, we are taught to be risk averse, to carefully consider all the implications and have sound reasoning to back our recommendations. So, this skill might be a challenge for some of us. Mentors or bosses can help actuaries to develop these soft skills. People around us with strong soft skills can provide inspiration. Many organisations (including employers) offer courses and training for these skills. The Actuaries Institute Leadership and Career Development Committee is charged with helping actuaries develop these skills, running initiatives such as the mentoring program and leadership forums. Perhaps the first step is to recognise your own areas of weakness – with the Actuaries Institute’s Capability Framework Assessment Tool being a good place to start.
Entrepreneurs are often credited with being able to identify an opportunity and then quickly evaluate the risk and reward of pursuing that opportunity. The current environment we actuaries find ourselves in is ripe with opportunity. In the general insurance industry there are new emerging technologies – driverless cars; new risks – cyber insurance; new considerations in insurance arrangements – peer-to-peer insurance. The PHI industry has a particularly challenging environment with asymmetry of information, overwhelming product complexity, and disengaged customers due to substantial premium increases. In financial services, technological and regulatory changes are disrupting established business models and creating opportunities for those who truly understand value to guide their employers and clients through this change. There is also the whole data analytics, big data space where we seem to be just at the tip of the iceberg. It is an environment where we need people who can be innovative, think differently and not be afraid to try something new.
I would suggest that while developing and running your own business will surely test and hone your entrepreneurial skills, these can also be developed within your current organisation by bringing a new idea to fruition, being innovative in your thinking, using your passion to influence your colleagues to consider different solutions. For these types of people to be effective it does require the organisation to be flexible and have a culture where it is OK to try something new and fail. In a recent Actuaries Digital interview, Hollard CEO Richard Enthoven talks about how “allowing people to fail” has been key to the company’s success.
So the challenge is, can more actuaries take the analytical skills, big-picture thinking and hard work ethic our training equips us with, and combine these with passion, vision, adaptability, having a go and not being afraid to fail, to become the entrepreneurs of the future in this emerging world of opportunity? Do you have what it takes?
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