All posts by Mark E. Schwarzmann

Mark Schwarzmann, our founder and principal, brings over 25 years diverse experience, including four years as a Board Member and Membership Committee Chair at the American Council of Life Insurers (ACLI). He has run businesses in very large organizations (GE, American Express, and Ameriprise Financial) and small, entrepreneurial enterprises (Allfinanz and the GE Capital – ResCom joint venture). This diverse background, work with corporate boards, industry analysts, rating agencies, and related policymaking exposure provides an uncommon perspective. He is also remains involved in community arts organizations across the country.

Less Obtrusive Renewable Energy

As a sailor and one-time worker in GE Power Generation, I have always marveled at our inability to harness the power of the seas. It looks like technology is finally getting to the point where we may see it happen. I have seen predictive articles for years, but this one shows some real promise and commitment. Imagine, unobtrusive, to us at least, power generation equal to 1/3 total US energy usage from the tides – no dams, no fights over views, no waste. Time will tell what environmental impact studies will say about how these interact with fish and other sub-sea creatures, but it is very promising on the surface (literally!).


Leadership in Uncertain Times

With the continuing sluggish economy, stubborn unemployment and seemingly intractable partisanship in Washington, it seems more and more certain that this environment truly is the new normal. Just what does that mean for leadership and your personal leadership style? Should you and your business continue to play it safe, stay on the sidelines and hoard cash? With records on Wall Street, corporate profitability and corporate cash hoards, that has been the case so far. I argue it is time we begin moving forward. Face reality, the partisanship in DC is not likely to diminish any time soon because, whatever their logic, the never-ending push for the next election cycle makes demonizing the opposition a favored strategy in both camps.

So, take continuing uncertainty and lack of movement on the truly important issues (like tax reform, entitlement reform, Government spending, National debt, etc.) as the norm and begin pushing forward. Treat uncertainty as the sure thing and focus on growth. Go ahead, revisit your vision for the organization, odds are the world is quite different today than it was when you last thought boldly. Build out that path to your vision, and, yes, build some triggers in there for changes in the Federal equation – I am not suggesting that ignorance is bliss. The key is not to confuse your message to the organization with those triggers. Paint that path forward, fund it, be bold and be committed. You may even get a jump, a large jump, on your competitors if you embrace this now.

Leadership in a Matrix Organization (or any other)

Following on to my last post it seems worth expanding on the tactical elements of leadership in a matrix, or any other organization. The key to successfully engaging your entire team is multi-faceted. It begins with ensuring that each of your team members knows that they are valued contributors to the process. Looking back, that means their voice and insights are included in steps #1 Truly know your business and #2 Find the key intersections. Each team member must also be fully part of the dialogue that generate step #3 Define a vision and step #4 Paint a picture. From this immersion and level footing, each team member becomes fully invested in the process, the vision, and achieving the goals. They become emissaries for the business within their functional areas, geographies, or related business units. Their investment in the process ensures that when they represent the interests of the business, they do so with a firm grasp of the underlying reasoning that supports the chosen direction. This team of advocates – hopefully zealots – furthers the goals of the business by automatically driving step #5 Stay committed. Their commitment to the process and its outcomes keep them active, vocal advocates, and ready ambassadors to their larger constituencies – whether that be their senior management, broad organizations, clients, partners, etc. Using the process in this way provides you with an assurance that the business is on a thoughtful path, with broad support and multiple feedback mechanisms to stay on track. Each team member owns the vision, is enthusiastic, and has a commitment to achieving the goals. You have laid a winning foundation for your business.

Holistic Business Leadership, even in Matrix Organizations

I so often find myself addressing the basic tenets of leadership that it seems worth outlining my core principles here. Foremost, create an atmosphere of trust and openness. Lead from the front, and be sure you and your team are accessible and engaging. Make all your constituencies – clients and prospects, employees, vendors, and investors – feel a part of the company’s mission. Let everyone have a voice, and work with your team to assess and internalize those inputs. With that foundation, I say you jump into my five steps for setting your business up for great performance:

  1. Truly know your business – sounds ridiculous, I realize, but get underneath the hood and identify the key drivers financially, environmentally (in your markets), and from a business process and personnel perspective. Understand your business.
  2. Find the key intersections – from this sound starting point, identify areas where strengths and opportunities intersect. These are the ultimate leverage points, the vital few things that will truly accelerate business growth.
  3. Define a vision – how will your organization look in five years? How do you want others – customers, investors, employees – to think of your business at that point? In other words, where are you going? This should be quite resilient and static once you have defined it.
  4. Paint a picture – perhaps the toughest step is translating and articulating the vision in a way that it becomes accessible, understandable, actionable, and, most importantly, embraced by those constituencies.
  5. Stay committed – persistence, consistency, communications, awareness, and adaptability are all essential elements during the execution phase. Strive for operational excellence as you implement your tactical plans in support of the vision. Closely monitor progress and performance, adjust as needed, and keep your constituencies engaged and apprised as you notch victories or course correct over time.

This is an evergreen process. While it certainly makes sense to work through it once, steps four and five are iterative on top of a reasonably static vision from step three. Also, keep working steps one and two, offline if you will, to ensure you stay on top of developments and new opportunities. Keep your pipeline of great growth ideas current and full, and refresh your vision as needed to reflect new realities. A well-defined vision should rarely need major overhauls; in fact, layering in new initiatives from your current step two into step four should not even require tweaking your vision. Try it, share your thoughts, or contact me to go deeper.

Memorial Day Thoughts

Plenty of online tributes to our veterans over this Memorial Day weekend. Many are touching. As I tweaked my site today to add a photo of a windjammer on Penobscot Bay in Maine, it seems appropriate to add my own thoughts. My father, who loved his Friendship Sloop and sailing in Penobscot Bay and Chesapeake Bay, served his country. We often trivialized it, as did he, saying he did his two years and retired a PFC. Truth is he played his part, probably more important than anyone would like to admit. As he got older, he became more nostalgic and truly valued the role he played and the importance of service – he was also a lifelong volunteer fireman. Ultimately, he chose to be interred in a National Cemetery near his adopted home in Jacksonville. In hindsight, more power to him, and thanks to him and all who have served, no matter the role. No role is trivial as they come together to deliver to us the ability to freely post what we will on websites like this, and there is nothing trivial about that. Enjoy your Memorial Day, but don’t forget why we remember.

Thanks to all who have served and sacrificed, and the loved ones they left behind. We can’t say it often or emphatically enough.

ETF Market Developments

Watching ETF markets develop is interesting. Two recent articles are caught my eye. The most recent,, addresses the rise of actively managed mutual funds as buyers of ETFs, citing hundreds of actively managed funds and 21 of the 25 largest fund complexes as holders. Reasons, they say, vary from parking new money to niche positions in allocation funds to core positions in some allocation funds to core positions in target date funds. I still wonder, despite protestations otherwise, just how embedded ETFs impact the cost structure for the holder of the actively managed fund. No doubt there are good reasons for these moves, parking funds and cost competitiveness against actively managed funds in a fund of funds scenario amongst them, but what about the cost?

The second article,, adds another compelling argument for why actively managed funds might be interested in targeted ETF investments. They talk about how low volatility ETFs tend to outperform high volatility over the long term. Yes, I and they acknowledge that cherry picking time frames can make all the difference, and I encourage the skeptics to go there and dig deeper. I bring it up here because I think it is a good illustration of how a particular ETF can serve a meaningful purpose in these actively managed fund scenarios by providing reasonably strong upside potential over time without the downside swings even strong markets demonstrate.

Love to hear what you think about ETFs in actively managed funds and the notion of using these low volatility ETFs in some of these situations.

Longevity Risk and Retirement Savings

As a former life insurance company CEO I often proselytize about longevity risk – the fact that we are living longer than ever before, and so need to plan for longer time in retirement. I worked with the American Council of Life Insurers and state regulators to bring longevity insurance to market and with my own product and finance teams to bring sustainable, reasonably priced income for life benefits to our variable annuity product line. Two recent pieces prompt me to comment on what Larry Fink, CEO of BlackRock, rightly calls longevity risk “the defining challenge of our age.” Understanding this and taking steps to address it are paramount to Americans of every age. Interesting context for the video comes from Mary Beth Franklin’s piece in Investment News. She points out the dramatic impact the Great Recession had on existing savings, particularly for late boomers and Gen Xers. Of course the recovery has helped, with markets rebounding nicely, but so many drained what little savings they had that recovery is a relative thing. This backdrop only amplifies Larry’s comments. He covers a broad series of underlying issues from the aging workforce to lower birthrates to the overwhelming costs of entitlement programs. He talks about the shift from Defined Benefit plans to Defined Contribution plans, and the tendency for individuals to invest more conservatively than institutions, worrying about the short-term, when saving for the long-term. Of course, he highlights the need to focus on this now – individually and as a society. One solution he suggests is mandatory retirement savings, citing Australia as an example to consider. Really interesting talk, well worth your time. Now, if we can only move down this path. The sooner we begin, individually and as a nation, the easier this discussion will be. I believe a balanced approach which brings constructs, tools, and even products from the insurance industry (like lifetime income riders or their underlying hedging strategies, longevity insurance, and tax deferral mechanisms), asset management tools, and intelligent legislation can ensure the best possible outcome.

Motivating Sales Teams

I came across this article the other day, and it sparked some deeper thought on getting and keeping your sales team on the same page as the organization. I love the core premise of the piece: that compensation is just one piece of the sales motivational puzzle. I am particularly fond of Colleen’s points #3 – Protect Your Team, #4 – Reward Your Team verbally or with an e-mail, and #5 – Separate the Manager from Selling. This goes to creating a supportive environment in which your sales team is positioned to win. I tend to agree with her point #6 – Have a commission plan that rewards your team for the behaviors you want. It goes without saying, but her sub-points about keeping it simple, ensuring everyone understands and encouraging team behavior are good. I think there is an important elaboration, though, and I would make it point #1. Consistent with my core philosophy that truly high performing organizations start with a well reasoned, well articulated strategy, your sales organization is an important part of that downstream messaging. Clearly translating your organizational vision into direction and implications for sales and marketing keeps everyone working toward the same goal. Ensuring that sales compensation plans dovetail with that messaging is vital. Finally, stay in front of the sales organization. Be visibly supportive and engaged, and use that time to keep reinforcing the overarching goals for the organization and the vital role the sales team can, and is, playing in making the vision reality.

What sparked my thoughts:

Mark’s Observations

Welcome, today we are starting a new process of adding content more regularly in the form of Mark’s Observations. Right here on the landing page we will present a variety of opinions ranging from thoughts on the economy to effectively building corporate strategy to trends in products and distribution. We will not limit ourselves at the outset, simply venture to provide you with thoughtful and useful content which will keep you coming back for more. We encourage your participation, here with your comments and by sharing this content through social networks like Facebook, LinkedIn and Twitter. Let us know what you think, that you appreciate our work, and what we can do differently to serve you better.