Case Study: Manulife, Hong Kong “If you treat people badly, there have to be consequences”

08 July 2016

Author: Robert Jeffrey

Case Study: Manulife, Hong Kong

How one of Asia’s best-known insurers has shaken up the way its managers lead others

There’s little chance of missing Manulife’s Asian headquarters. Its name glares from the top of a 50-floor tower so starkly it is the first thing you read as you cross into Hong Kong Island, an imperious corporate font among a sea of garrulous neon. Yet reach the base and it becomes clear its location is also strategic. Not for the city’s most notable insurer the faceless security of the financial district (though it also has a larger location in Kowloon): Manulife jostles with the high-end shops and teeming streets of Causeway Bay, where the people are.
The symbolism wouldn’t be lost on David Thomas, senior vice president and chief human resources officer for Asia. The business, he says, is only as good as its people: “You can have the best strategy in the world, on paper. But unless you’ve got the talent to execute, it’s not going to go anywhere. Unless you have a compelling employee value proposition, you’re going to be thwarted. Unless you can convince people who are already here that this is the best place to work, you’re always going to be liable to lose people to very active competitors.”
There are around 10,000 of those people across 11 countries in Asia, where Manulife offers traditional protection products as well as wealth and asset management. The Canadian-founded business has been active here for almost 120 years and leads in many of its markets. But the office Thomas surveys from his sit-stand desk only offers a glimpse of the story. Manulife, like its rivals, relies on a small army of 60,000 door-to-door agents to sell and service its products. While it’s undoubtedly proud of them (unlike its rivals, says Thomas, its agents are all directly employed and are rigorously trained and selected, because “you only need one or two bad hires and suddenly you have huge reputational risk”), the times are changing.
Customers increasingly want to buy insurance products online (often through comparison services) or via their banks. And insurers have huge amounts of data at their disposal, and a clear requirement to market themselves beyond the friendly face at the door. It means Manulife’s Asian division – which enjoyed a 36 per cent rise in revenues amid record sales in 2015 – is hiring a new raft of marketers and data scientists. And it has been thinking deeply about who leads such a rapidly changing organisation.
In the past, says Thomas – who joined the firm in 2014 after 12 years with Standard Chartered – the business focused on recruiting the smartest actuarial scientists. “Many of those people became the leaders of our company. But we didn’t have people who were Olympic standard in general management or leadership skills, and that’s become a huge focus for us over the last four years, and an intense focus over the last two years. We’re looking for people who are not just technically strong but can build followership – who are effective leaders. In tight talent markets, a lot of employees are just as loyal, if not more so, to their leaders than the organisation.”
Manulife has identified 2,900 people managers in Asia, at all levels. And all of them, says Thomas, have been set clear expectations around both the technical aspects of leadership and the way they offer feedback, as well as the broader values of the business.
Part of that has also meant being more particular about who becomes a leader, he adds: “There’s a risk that, if we’re not careful, where we’re looking to fill a technical leadership role, we’ll focus on technical skills. Over the last few years we’ve been ensuring we do structured leadership interviews – we’re getting a lot of data around how they work under pressure, how they work with other people and what’s their value set. And we’re linking that to our recruitment process.”
Ultimately, he says, “if you have a manager who gets great financial results but treats their staff badly, there have to be consequences”. And that has meant the example needs to be set from the top. “In other companies, I’ve seen examples of where you get it right in the middle of the organisation, but cynicism happens because they don’t see the change in behaviour at the top,” he says.
The top 10 individuals in the business have all been tasked with embodying the new values, and setting a strong example, says Thomas. But such a shift isn’t always easy: “If you’ve been leading in a particular way for 20 or 30 years, and suddenly you’re required to empower more, or being asked to support innovation, it’s a big change. We’re giving a lot of personal coaching for leaders who are going down that path.”
HR’s most important role has arguably been to ensure this new mindset is reflected in performance management. “We were a ‘nice’ company and we didn’t like giving people feedback on where they needed to improve,” says Thomas. But that has changed as an ability to innovate and, crucially, a willingness to delegate and empower others have become key metrics on which individuals at all levels are judged.
That is also reflected in reward: “You can be hitting the ball out of the park in terms of what you deliver, but, if you are a pain in the backside to work with, that is going to be reflected in your compensation. The feedback we get is that they know we’re serious about the behavioural aspects of performance if it’s reflected in their pay.”
And, unusually for a financial services business, the concept of 360-degree feedback is also well understood at Manulife, and is being actively practised among almost 400 top performers. As Thomas says: “We want to drive collaboration across the company, rather than having lone wolves or people acting in their own interests.” It’s a mantra as bold as the building he sits in – but you’d bank on it coming to fruition.