CHANGE MANAGEMENT: Knowledge Transfer – Initiating A New CEO

Matt Harris faced challenge not normally associated with deciding whether to take job. AIG Inc, the parent company of AIG New Zealand which had offered him its chief executive role, was in the headlines worldwide after receiving US$85 billion lifeline by the Federal Reserve Bank of New York in September last year.
While AIG New Zealand was not directly affected by the financial woes of its parent, Harris knew the local organisation was closely tied to the parent company through brand image and public perception and he had to take that into account.
“I’d be lying if I didn’t say that the events taking place didn’t make me think long and hard about making the move,” he says. “But general insurance was the foundation of AIG back in 1919 and I had confidence that it would remain core to the business. It made my decision little bit tougher but I certainly have no regrets.”
Harris has been officially in the role since mid-December, taking over from Rob Ryan who, after three years in the local seat, has moved to Malaysia with the company.
Ryan says the common AIG branding globally was deliberate move, so when the US meltdown happened the challenge for him and the New Zealand operation was to show that the situation was the result of activities and business in the financial products division conducted in New York and London. “It had to do with complex financial instruments, and was nothing to do with any of the business and core insurance underwriting things that we’ve done here in New Zealand.
“As family member we were naturally concerned about AIG. However, while linked by our brand, the fundamentals of the insurance subsidiaries were unaffected. Our challenge was to make sure our clients, our brokers and our business partners clearly understood that.”
The company undertook communications blitz, talking proactivly, clearly and frequently with staff, brokers and clients.
“During crisis you don’t do anything different around your values and your behaviour, if anything changes it’s probably that time frames are concertinaed. You’re doing things lot more quickly or more frequently but the basic values and behaviours shouldn’t alter. It’s about providing rational and emotional reinforcement. Recognising that we’re aware of what’s going on, hearing their worries and concerns, rationally explaining why things are okay locally and demonstrating that it’s business as usual.”
Ryan refers to Chinese proverb: ‘When the wind blows, some people build shelter, some people build windmill.’ “Its about not being ashamed of what’s happening and getting out there to reinforce the local situation,” he says. “We had no reason to hide, so we went out there and promoted our business.” Ryan’s move to Malaysia was already public news when the September trouble broke.
Into this mix comes Harris. Fresh from stint working in India, he was keen to take up the reins of AIG New Zealand. Both men admit there’s been some impact on the business, “a few bruises but limbs still intact”. This year Harris will focus on business retention while continuing to develop new products and win new business.
He is pleased with the way the handover was managed, saying in an ideal world there would always be some crossover time – especially as long gap can create uncertainty for internal and external parties. And his arrival coincided with quiet time of the year in the industry, allowing him to spend some quality time consulting with brokers and employees before business picked up. Not something which can always be planned obviously, but nice if it can, he says.
The key to successful transition, they say, is keeping things simple.
“My view is that the most important areas to focus on initially are our people, the brokers and our customers. Understanding what each member of our team does and understanding the businesses of our brokers and customers so I can offer some continuity and platform for development, while working with them to identify mutually beneficial outcomes,” Harris says.
“The realities are that, coming from another company, there are going to be different systems, protocols, even different acronyms. You’ve got to accept that you just have to work that through in the fullness of time. Certainly Rob and I didn’t sit here ticking off list of one to 100 issues. It’s more important to focus on understanding who your customers are and the culture within the company.”
Ryan adds that it’s important for the departing party to be open and upfront.
“I’m very proud and bit possessive of AIG New Zealand. It’s an organisation that I’ve spent the past three years in and it’s very much part of me, so I want to make sure that it continues to thrive and prosper, so I need to provide Matt with all the information and all the facts. Undoubtedly Matt will put his own character on the organisation and I think any chief executive will do that. It’s not situation where the fires are burning or the flood waters are rising, so we don’t need any immediate hard pulls on the tiller. Matt will have good look for himself, then decide what he wants to do.”
Harris wholeheartedly agrees, saying longer-term strategy is obviously already in place for the company and it is his job to put his stamp on those activities and, over time, to identify new opportunities.
“At the risk of sounding too clichéd, the key point is that the company is always bigger than the chief executive or any individual. AIG New Zealand has been running for almost 40 years and we’re here to stay. So I’ll put my own stamp on certain areas obviously, but the core business will continue,” he says.
“There are number of development initiatives that Rob and the team had already embarked upon which I will continue to drive. AIG in New Zealand has always played at the corporate end of the market but, as people know, lot of the business base in this country is around the SME sector. Our push into this sector in recent years has been well received and I have strong ideas on how we can continue to position AIG in that space.”
The final word goes to the departing Ryan: “There’s no prescribed framework for handover, it’s just common-sense approach. And that’s important to give the market and staff ongoing confidence. Matt already has the skills.
“This is not an apprenticeship. It’s transfer of knowledge as opposed to transfer of skills.”