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Verisk’s Scott Stephenson Steps Back So That Employees Can Step Up

9 Jul 2020

Last year, Verisk Analytics CEO Scott Stephenson met with about 20 employees to discuss staffing. They brainstormed how to hire hard-to-find software developers.

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Stephenson listened as a manager described some of the newcomers they were recruiting at Verisk (VRSK).

"We're bringing in people with piercings, tattoos and body art," the manager told the group, Stephenson recalled. "It shows we're willing to think differently."

Stephenson's reply surprised the manager — and caused a bit of a stir.

"I appreciate the difference you're trying to bring in assembling the team," he said. "But around here, we don't describe people by talking about what they look like."

The comment hit home. Everyone understood Stephenson drew a line in the sand. "You could've heard a pin drop," said Stephenson, 62, who became the Verisk CEO in 2013. "It was one of those moments where you have to defend the organization's values."

Tap Growth Like The Verisk CEO

With about 10,000 employees, Verisk is a data analytics and risk assessment firm based in Jersey City, N.J. Stephenson, who joined the company in 2001, is chairman, president and CEO.

Cautioning his colleagues about how they refer to people — and to avoid characterizing others' appearance — required a delicate balance. He didn't want to let it pass, but he was careful not to come down too hard.

"I don't think (the manager) thought I was being critical of him," Stephenson told Investor's Business Daily. "It wasn't ad hominem," but sometimes a leader needs to make a point and not mince words.

And the results of Stephenson's style are powerful — helping the company sail through the coronavirus bear market and recession. It's on the IBD Long-Term Leaders watchlist, a collection of companies with durable growth and price performance.

Verisk's shares have jumped more than 180% since April 2013 when Stephenson started as CEO, outpacing the S&P 500's 100% rise. The company's adjusted net income is on pace to hit $787 million this year, more than doubling with Stephenson as Verisk CEO. And revenue is expected to reach $2.8 billion this year, up more than 70%.

Trust Your Staff Through A Crisis

For the Verisk CEO, leadership is largely an exercise in striking the right balance between two opposing forces. Take crisis management, a timely topic in a pandemic.

In a crisis, leaders may micromanage a fraught situation — giving orders and making decisions. During non-crisis periods, they may be more hands-off and let the business — and its workers — exercise more autonomy.

Stephenson calls this "loose/tight" leadership: The honcho is loose in normal times — loosening the grip and not working as closely with next level managers. But management tightens when major shocks disrupt the status quo, wresting control and decision-making from employees accustomed to operating just fine on their own.

He prefers the opposite approach. "I believe tight/loose is a superior way to go about it," he said. He remains close to employees in normal times, learning what they're doing, why they're doing it and how they prioritize.

When a crisis erupts, his goal is to have previously empowered employees sufficiently — by tightening his supportive coaching and oversight before the crisis hit — and earned their trust. This allows him to step back and let employees tackle complex situations and make high-stakes decisions without his calling all the shots. He can loosen up when stakes are high because he has mentored his team well. This motivates workers to take ownership of tough challenges while creating personal and professional growth opportunities for them.

"It's mental math of what leads to effectiveness," Stephenson said. "As a company, we'll write many algorithms and untold lines of code. But I won't write a single algorithm or line of code. I'll enable and support those who do."

Lead Like Your Top Boss

Stephenson's affinity for the tight/loose approach to leadership reflects his experience climbing the corporate ladder. Early in his career, he worked at Boston Consulting Group and reported to two bosses, at different times during his tenure there.

"My performance was less than stellar in both cases," he said. "It wasn't for lack of effort. But I didn't understand what needed to get done and what each supervisor wanted."

The first boss gave Stephenson a to-do checklist and left him alone. The second manager engaged the young consultant, coaching him and guiding him to improve.

"I could feel myself getting better in real time, developing the muscle groups to contribute to projects," he recalled. "(The second boss) entered into my process, while the first one made no contribution to my own process."

Urge Others To Dig Deeper

Years later, as Stephenson earned a string of promotions at Verisk, he sought to enhance his employees' performance by spurring them to grow and learn on the job. Eventually, however, he managed too many people to stay close to each one.

"That's when you have to model a set of principles," he said. "You write your big ideas, keep talking about them and referencing those values all the time."

One of the principles involves innovation. Part of Stephenson's role is to spark entrepreneurial thinking.

When brainstorming with his team, he treats fresh ideas as a springboard to dig deeper.

"The easiest thing in the world is to start out being critical, say no and come up with reasons why that's not a good idea," he said. Instead, he poses questions such as, "How much opportunity do you see here?" and "How many customers might this reach?"

Share The Credit Like The Verisk CEO

To encourage more creative input from his team, Stephenson prefers to listen and let everyone chime in before sharing his conclusions. He resists snap judgments so that participants feel comfortable proposing innovative ideas in a supportive environment.

"He'll listen as we go back and forth and at the end he'll say, 'I have a thought on this' and (after hearing the idea) we'll all go, 'Yeah, that's it,' " said Phil Bourne, dean of University of Virginia's School of Data Science, who has participated in many meetings with Stephenson. "He says it in the right way at the right time, after everyone has had their say. It's enabling rather than dictatorial."

Like many successful leaders, Stephenson models what he wants from his team. By enthusiastically embracing unglamorous work, he motivates employees to roll their sleeves up and excel.

Mark Kistulinec recalls Stephenson's entrepreneurial drive when they worked together in 1995 to launch Boston Consulting Group's Atlanta office.

"Scott led by example, knocking on doors and building durable relationships in the community," said Kistulinec, now a BCG senior partner. "He did a great job at that and inspired all 10 of us" in the new office to follow his lead.

Kistulinec also appreciated his boss's care of the team. Rather than hog the spotlight, Stephenson enjoyed setting the stage for others to thrive.

"Scott coached me to break in a new client," Kistulinec said. "He took a back seat and gave me more of the credit than perhaps I deserved. He shared credit very generously."

Verisk CEO Stephenson's Keys:

  • Chairman, president and CEO of Verisk Analytics, a data analytics and risk assessment firm on the IBD Long-Term Leaders watchlist.
  • Overcame: An early experience reporting to a hands-off boss who showed little interest in supporting Stephenson's success.
  • Lesson: Continually look for opportunities to reinforce organizational values to employees at all levels.
  • "People need to be reminded of the values and how those values are important to what we do."

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This content was originally published by Investors Business Daily. Original publishers retain all rights. It appears here for a limited time before automated archiving. By Investors Business Daily

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