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In My Opinion
SAGE Advice
By Grover Edie 

Over the past few months, I have been reading some books and doing some thinking about how companies succeed, how they fail, and why they do either. I enjoy reading such books and have read many over the years.

Some years back, I came up with my own sequence of priorities for an organization. It can also apply to an individual, and has evolved over the years. I would like to introduce it to you in its current form.   

The concept can be summarized by the acronym “SAGE.” SAGE stands for “Survive, Achieve, Grow, and Expand.” The order is important, not just to make the acronym work, but because that is the order in which organizations should consider the priority of importance.

Survival of the organization should be its first priority. If it does not survive, it has no chance of fulfilling the purpose for which it was created. If it does not survive, growth and expansion are moot. I am reminded of the safety speech that the airline flight attendant gives concerning the air mask:   

In the event of a cabin depressurization, a mask will fall from a panel above you. Place it on your face (etc.). If you are traveling with people who need assistance, such as children, make certain you put your own mask on before assisting others.

This last part of the talk reminds me that if I don’t survive, I can’t help others.

The next step is to achieve the goals and purposes of the organization. Remembering why the organization was established in the first place and achieving those goals is secondary only to the survival of the organization. For a stock company, it should be making a profit and returning value to the shareholder. For a mutual insurance company, it might be to provide an open insurance market for its owner and customers. A political party’s purpose is to get candidates elected that have a given political philosophy or meet a certain criteria.   

Growing the organization may or may not be important. Growth in this context means organic growth: increasing the activities you currently are performing, adding members or adding policyholders, and similar increases in what the organization is already doing or the customers it is already dealing with. When the CAS adds Associate members who have met the entrance requirements, we are experiencing organic growth. An insurance company adding policyholders in existing markets is experiencing growth. Growth only makes sense if the organization is already attaining its purpose, meeting its goals, and is reasonably assured of survival.

Expansion occurs when the organization takes on new territories, lines or types of business, or other activities outside its current scope of activities. Our entering into agreements with other national actuarial organizations, permitting cross recognition of actuaries, is such a venture. So is our expansion into enterprise risk management (ERM).   

A good argument could be made that ERM is growth, not expansion, which points to the “fuzziness” of the boundaries between these categories. The boundary between “growth” and “expansion” is not as important as the fact that neither should occur until the organization is fully meeting its objectives, and is assured of survival.

I have used this scheme for years in the workplace, and have watched certain companies that moved attention away from “survive” and “achieve” in favor of “growth and expansion,” only to falter and even fail.   

This sort of categorization, along with its priorities, can be used in other places. It even applies to your personal work. Survive entails keeping your job and your credentials, realizing there may come a time where you have to choose between which you want to retain. Achieve your goals must be a personal statement like “be a respected and sought-after advisor within my company.”Growth would involve increasing the recognition and requests for actuarial work in the workplace, and expansion might be to add other functional areas to your scope of management, such as state filings or ERM.

My purpose here is to remind us that, in our activities as an organization, we should:

  • Expand only if we are adequately handling growth, attainment of purpose, and survival.   
  • Grow only if we are attaining our stated purpose and insuring the survival of the organization.

Survival deals with the viability and credibility of the organization and its members. Are we seen as the experts in property and casualty actuarial pursuits? Are we becoming globally recognized as the preeminent resource in educating casualty actuaries and conducting research in casualty actuarial science? Are our members recognized as the leading experts in the evaluation of hazard risk and the integration of hazard risk with strategic, financial, and operational risk? Are we valued advisors?   

In other words, are we meeting our organization’s goals and are we positioned to survive?   

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