Adam Bryant conducts interviews of senior-level executives that appear in his “Corner Office” column each week in the SundayBusiness section of The New York Times. Here are a few insights provided during an interview of Shivan S. Subramaniam, chairman and C.E.O. of FM Global, a commercial and industrial property insurer. He says that everyone at his company, from top executives to file clerks, knows about its three K.R.A.’s, or “key result areas.”
To read the complete interview and Bryant’s interviews of other executives, please click here.
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Bryant: What were some early leadership lessons for you, when you first became a manager?
Subramaniam: One is that people don’t necessarily do things the way you would do them. And if they don’t follow precisely the way you think about something, that doesn’t necessarily mean that they’re wrong. That took some maturity to understand — also, that not everybody will behave the way you behave.
But the bigger picture is to make very sure that everybody in the company has the same goal in mind. That was always the more important thing I learned over time. It matters less what people do or how they do it, but do we all agree on the same goals?
Over the years, that has led to us having very simple goals at our company. We call them “key result areas” or K.R.A.’s. We’re multinational — we’ve got 5,100 people, 1,800 of whom are engineers. We’re very analytical. But we have three K.R.A.’s, nothing terribly fancy. And everybody focuses on them. One is on profitability. One is on retention of existing clients. And one is on attracting new clients. That’s it.
You can talk to people in San Francisco, Sydney or Singapore, and they’ll know what the three K.R.A.’s are. All of our incentive plans are designed around our K.R.A.’s, and every one of those K.R.A.’s is very transparent. Our employees know how we’re doing. And, most importantly, they understand them, whether they’re the most senior manager or a file clerk, so they know that, “If I do this, it helps this K.R.A. in this manner.”
Bryant: Those three goals — did you inherit them when you became C.E.O.?
Subramaniam: We went through a major transformation in 1999. We put a five-company merger together. And that’s when we had to focus on these kinds of things, because everybody had a different way of looking at things. That’s why these K.R.A.’s really resonated well.
We had people who were in fairly small to medium-size companies, and now they were part of a large company. They wanted to still be treated the way they were treated when they were in a small company. The kind of communication system that we developed helped enormously.
Bryant: What were some other big influences?
Subramaniam: When I worked for one of our predecessor companies, I took a leave of absence and went to M.I.T.’s Sloan School of Management. I came back, and the company went through a major change and hired a new C.E.O. to run the company. He got to be a very, very important person in my life at the time. I was an analyst assigned to the C.E.O. So he would say, “Go look at this” or “Find out that.” I would crunch the numbers, come back, and work with him.
I learned many things from him. He took a long-term view of virtually everything, and he would be very measured, whether it was good news or bad news. Sometimes you could tell that he was angry, because we were going through a crisis at that time, but he would just make very sure that he didn’t react. Privately he might spout off. But in any meeting where there were more than two or three people, he would be very measured and sensitive about how he reacted.
And yet he was known as a tough guy. He kept us focused. He’s the one who really started to teach me about the importance of simplicity. Things like, “If you can’t explain it to me in a couple of sentences — what the idea or what the concept behind it is — it’s obviously something you don’t know how to do. If you’ve got to write a whole page to describe something, that doesn’t make a lot of sense.”
Bryant: What about leadership lessons you learned early in life?
Subramaniam: I tend to be a little more of a risk-taker than most people, because I was one of those kids who came to the United States in their 20s. I didn’t have much money, so I had to survive and do things and get along. I got a job at a manufacturing company in Brooklyn and went to school at night. It’s just an environment where you’re taking a lot of chances, so later on, when you do need to take a chance, you’re a little more sensitized to the ability to do it.
Bryant: And your parents? What about them influenced you?
Subramaniam: My father was in the merchant marine and helped start the first merchant marine academy in India. This was right after Indian independence, so everything was new. Every two or three years we would move, and that also made me less averse to taking risk. That’s how life was. Every new place, we had to start all over again. I wish we had had the Internet and text messaging back then, because I would have kept in touch with everybody.
Bryant: What lessons did you learn from your father?
Subramaniam: Not lessons as such, but there were things that made an impression. We would have kids over from the academy on Sunday night for dinner. He wasn’t too taken in by the power of his position. He was very down to earth about those kinds of things. He would go and play sports with everybody else in the evening, and he’d be happy doing that. And those were all things where, essentially, he had a sense of humility about his job.
And I think that happens even for me today. At FM Global, I try to eat lunch with everybody. There are no special executive dining areas or anything like that. I get my tray along with everybody else. If there’s a seat open anywhere, I’ll sit down at lunch and talk with people.