Interview: Dean Connor, Sun Life Financial
Dean is the CEO of Sun Life Financial.
IBR: You spent nearly three decades working at Mercer, how did you know it was the right time for a career change?
It was a very interesting time. I loved my time at Mercer, I learned a lot, I worked with great people. I was working in New York in 2004, around the time New York Attorney General Eliot Spitzer was going after lots of firms in New York, and that included the sister company to Mercer, Marsh. It resulted in a new CEO at Mercer and a new CEO at the parent company MMC. To be honest, I woke up one day and I thought: “Are these the people I want to spend the next 10 years of my life working with?” But once I found the right question, I instantly knew the answer. I decided to work somewhere else.
IBR: Now that you are at Sun Life, what would you say Sun Life is trying to do differently than other insurance companies?
The first area is obsessing about clients. I use the word “obsessing” and the word “clients” very deliberately. You know lots of companies say we’re client centric, client focused, or customer focused, but we are taking it to a whole other level. It’s a step change where we are truly obsessing about our clients and obsessing about the client experience. We changed from “customer” to “client”, and it may seem like a small change, but we did it quite deliberately. A client is somebody with whom you have an ongoing professional relationship that is based on trust, whereas a customer is someone you might transact with once and never see again. We were trying to signal to all of our people around the world that this is such a big step change in obsessing about clients that we are actually changing the name from customer to client. Along the way we changed everything–not just one thing–we changed the key performance indicators that we track and we changed what we talk about. When we are around the campfire with our employees, we are telling more client stories. We changed our annual incentive plans so that for all 30,000 employees around the world, 25 per cent of annual incentives depend on our client scores that we measure twice a year. That’s a huge change. Now that’s the first area, obsessing about our clients.
The second area is talent. Again, everybody says they’re focused on talent; talent is the most important thing to drive success, but I would say we are really working hard on that. One of our mantras is every person we hire must upgrade the average. It sounds easy to do but it’s actually hard. It’s hard because, you’re manager of underwriting for example, and you have two vacancies and you desperately need to get them filled and there’s not a lot of underwriters out there in the market and somebody comes in who can do the job–doesn’t upgrade the average but can do the job tomorrow. That’s very tempting because you have goals you have to deliver on this year. To say to that leader, no we want you to wait and keep looking and find the person that’s going to upgrade the average, now that’s hard to do. The thought behind that is, think about 30,000 people, think about 10 per cent turnover, so every year we go out and hire 3,000 people and over the next five years we are going to hire 15,000 people. Depending on who we let into Sun Life, we could dramatically change this place for the better or for the worse–I’d like to think for the better. It’s not just about recruiting, it’s also about developing people within, helping them be the best they can be, giving them coaching feedback, giving them opportunities, helping them grow. Just this intense focus on talent.
The third thing I’d say that’s different is, when I became CEO eight years ago we fundamentally changed our business mix. We declared our strategy in four pillars: Canada (where we do all lines of business), asset management, Asia (which although we’ve been in Asia since 1892, we’ve never really declared it as one of our core pillars and no one kind of knew where we stood on it), and lastly the U.S. (where we focus on group benefits and the work site). In doing that, we closed down two other businesses, life insurance and annuities, which we’ve been doing since 1895. We basically narrowed the business in the U.S. to something we could be really good at, focused on group benefits and got rid of the businesses that had a ton of risk and lower return. I would say we did that ahead of just about every insurance company in the industry and as interest rates have fallen, it has turned out, in hindsight, that those were good moves.
IBR: What were some of the key strategic elements that helped Sun Life grow its brand in the U.S.?
I would say it’s focus. You know when you’re trying to be all things to all people, sometimes, you’re nothing to anybody. So just the act of getting out of annuities, getting out of life insurance, and then doubling down on the employee benefit space really helped us. It helped solidify our brand in that market and made it easier to recruit people. We kind of said to people we–unlike many U.S. insurance companies that do lots of different lines of benefits–we are majoring in group benefits, that’s what we do, and that’s what we are focused on, becoming the best benefits company in America, come join our team. Same with brokers that we distribute through. So I would say the biggest thing is focus.
IBR: Since technology is such a big part of business today, how has technology changed the way Sun Life is doing business since the time you joined and were there any changes that were difficult for you to lead the company through as CEO?
You’re right, technology is a huge change and a huge opportunity. One of the things that we are building out as part of our digital strategy is the technology so we can be personalized, predictive, and proactive with our clients. So, we can say, “Hey Rahul, congratulations on getting this new job. People normally look at their life insurance or their pension around that time. Here’s five ideas on how to do that. Click here to buy some inexpensive life insurance”. Or to say, “Liam or Alexander, congratulations on the birth of your child. You know this is the time when people look at their life insurance or health insurance. Click here to look at it.” So, the technology to build that out, the data required to build that out is complicated; privacy rules, finding that right line between creepy and cool–you know what I mean. We don’t want to nudge people on stuff where they go, that is really personal, how did you know that about me. That has been a huge change and we are driving that change, we’re ahead of many of our competitors on that front and we’re taking that idea around the world. Our bot, her name is Ella, nudges our plan members and our clients on trying to take action. There’s lots of actions, that are not all about selling them more; lots of them are about learning more about the benefits they already have. For example, did you know that your company gives you a pension and you’re leaving free money on the table by not joining the pension plan? Free company money. So, nudging people to get the most out of it, that’s one big area of technology change.
Cyber security is another big area. Most companies would say it’s not whether you are going to get hacked, but when. When you do, how do you react and how do you manage client data and client expectations? The amount of time and energy we spend on cyber is big, that’s another big change.
Another thing that has changed is the investment required in technology has gone up and up, for all the mobile apps we have built. We’re now building natural language processing and voice apps for our clients to interact with, voice bots, all of that requires big investment. One of the changes is the need to leverage that across the organization so that each business is not trying to build on its own.
On the second part of your question, changes are difficult to lead the company through. I would say this education process for our business leaders, it takes a lot of effort because not everybody learns at the same rate. Not everybody is aware of artificial intelligence and machine learning and what that can do, what kind of datasets you need, how you can apply that to real problems in your business. For example, we started some bootcamps for our P&L leaders around the world on data and data analytics, so just training bootcamps to get them up to speed. One of the fundamental questions we are asking them is “What data would you die to have in your business?” When you first ask that question a lot of people say, “Well I’m not sure really, I haven’t thought about it”. Well today, the leaders at Sun Life have thought about that a lot and are working hard on building all that out. I wouldn’t call them difficult changes to lead but you realize that people learn at different rates and come up with ideas at different rates.
IBR: Moving forward in the next five years, what type of challenges do you see Sun Life facing?
Well I think one is regulation–the regulation of financial services. It’s almost like the repercussions of the global financial crisis are not all over yet; there’s still things that keep coming through. So additional regulation from regulators around the world. Like many other organizations, there’s geopolitical risk–look what’s going on in Hong Kong right now, look at some of the challenges in Europe with Brexit, as well as the divisiveness in societies today being sharper than ever. So, those are all things we think about; now having said that, at Sun Life, we’ve been doing business for 154 years–we’ve survived two World Wars, a Great Recession, the Great Depression, and many other recessions in between and lots of political uncertainties. So, I’m sure we’ll come through all this in okay shape.
The other challenge I would point out is low interest rates. Low interest rates are challenging for a life insurance company because, basically, we take money from people today and we promise to give it back to them years in the future, either through a pension, life insurance payable when they die, a critical illness, disability, health payment, or whatever the case may be, and if you can’t earn much interest on those investments when you’re holding them, that affects what our clients get and that affects the way these products work. That has been a real challenge for insurance companies and I think it will continue to be for the next five years. On the flip side, it’s also a challenge for our clients who are trying to save for retirement in a low interest rate world; we’ve been building out businesses to help support them, to help them earn more through real estate, commercial mortgages and things like that which have much higher yields.
IBR: Bringing you back to your time at Ivey–in what ways do you think your Ivey education has helped you succeed in your career and even as a CEO today?
I would say a couple things–one is that there’s a good element of critical thinking that you learn at Ivey. You read a case and you have to talk about the case; you very quickly get to see that the way you thought about it is either not right or not complete, or in some instances you were ahead of others in the way you thought about it. But it does teach you critical thinking skills and that’s important.
The second thing is because the Ivey curriculum covers so much ground in terms of case studies and industries you look at, you have to be able to learn about all these different types of industries. I left Ivey thinking, you know if I work hard enough, I will be able to understand just about anything if I stick with it. That comes in part from the two years of, you know, one week you’re doing a case on a company that builds yachts and then the next week it’s a company that makes contact lenses for chickens. It’s amazing–you ask people, even my vintage of 40 years later, we can still tell you a bunch of the cases we worked on. That tells you something, doesn’t it?
The third thing I would point out is there is a heck of a lot of volume of material that you have to digest, as you work through cases in particular. You have to learn how to read fast and digest information, sift and sort, and synthesize what’s important, and I believe Ivey helped me do that. In this job, the torrent of information coming to me as a CEO is enormous and takes effort to stay on top of. I think some of those skills come out of Ivey–I remember being swamped with case studies, trying to get through these 20-page case studies, three a night at some points; it was a tremendous amount of reading.
IBR: How would you say your perception of what it takes to run a business has evolved from when you were a student at Ivey to where you are today?
I have to confess, when I was at Ivey, I didn’t really think about what it would be like to run a business. I didn’t necessarily see myself as a CEO back then. I was just trying to get through school and get my first job; so I don’t really have a comparison. If I had wondered about it, I would observe that it is just way more complex than I could have ever imagined at the time. The other part of it is, the part that makes it easier. If you surround yourself with amazingly good people and you organize them in the right way, create the right culture–it’s not just about you, it’s about the whole team. I take a lot of comfort in the fact that we’ve got amazing people at Sun Life–if there are any issues, I hear about them quickly. We’ve got so many people who care about the firm as much as I do. We all care about it a lot, so even though it’s complicated, it’s much easier when you’ve got a strong team.
IBR: If you could go back and give yourself advice as a student at Ivey, what would you tell yourself in order to have a successful career?
First, at some point, go work outside of Canada, in particular go work in the U.S. or Asia, where the pace of business runs much faster and people take more risks. I was in my forties before I did that and in hindsight, I am so glad I did it. I moved to New York City, and there’s a buzz, a hum and a click to the business world there that runs at two to three times the pace that it does in Canada. I wish I had done that earlier in my career; that’s the first point.
The second point is that there’s a whole category of stuff they do not teach you around how to get stuff done. You can have two people, equally bright, and yet one person is able to get so much more done than the other person. They take big, complicated problems, break them down into smaller pieces, solve them sequentially, figure out workarounds, get other people to help them, redefine the problem, etc. How you get work done or how you get buy-in, is half the battle in business; and at least when I went to business school, they didn’t teach us a lot of that. So that’s not necessarily advice for the students, that’s actually advice to the Dean of the business school.
The third thing is that your number one job between age 16 and 25 is to open doors, because most people don’t know what they want to do when they graduate. The way you open doors is to get really good marks; pick your courses carefully because you may not know what you want to do later. It’s the summer jobs you get, not always going back and doing the same summer job, rather getting a variety of jobs that expose you to different things. Travel experiences, volunteer experiences, the networks of friends you develop and keep alive–all of that is opening doors. If you focus on opening doors, good things will happen, and it will take a lot of pressure off thinking about what you want to be when you grow up. I wish someone had said that to me when I was 20 years old!