Shivan S. Subramaniam, chairman and C.E.O. of FM Global, a commercial and industrial property insurer, says that
everyone at his company, from top executives to file clerks, knows about its three K.R.A.'s, or “key result areas.”
What were some early leadership lessons for you, when you first became a manager?
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.”
Those three goals — did you inherit them when you became C.E.O.?
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.