Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of diversified solutions across senior-level executive search, leadership, assessment and development, team and organizational effectiveness, and culture shaping. Every day, we speak with leaders around the world about how they're meeting rising expectations and managing through volatile times, thinking about individual leaders, teams, organizations, and society. Thank you for joining the conversation.

Katharina Hesse: I'm Katharina Hesse. I'm a partner in Zurich and member of our Global Financial Services practice. Today I'm joined by Alison Martin, CEO, Life, Health, and Bank Distribution at Zurich Insurance Group. In this role, Alison leads one of Zurich's most strategically important businesses, including Life and Health Protection, partnerships with banks and financial institutions, and innovative solutions supporting customers' long-term financial security and wellbeing. She and her team are addressing some of the most pressing challenges for organizations and society, demographic change, evolving health risks, shifting workforce expectations,0 and the growing importance of resilience. Previously, you were a senior executive at Swiss Re and you held roles across risk, finance, and business leadership. Alison, welcome. It's a pleasure to have you with us. 

Alison Martin: It's great to be here. Thanks, Katharina.

Katharina Hesse: Thank you very much. As a first topic, first part, let's talk about the strategic value of resilience. Alison, how do you define personal resilience in today's context, and why is it becoming a strategic priority for individuals and employers? 

Alison Martin: So, I think of resilience very much as being not how you deal with the status quo, but your ability to deal with the ever-changing environment around you. So, having personal resilience means that you're able to adapt and, ideally even, thrive when the situations change. Sometimes people confuse wellbeing and resilience. I mean wellbeing is your baseline—it’s your psychological baseline—and resilience is what gives you the ability, under a stressed situation, to actually still be a high performer. And I think for organizations, that's obviously critically important. I mean the times today, as we think about from a risk perspective, the risk landscape has not gotten any easier. So, equipping individuals with the ability to manage through that is increasingly important. You know, we can go on to talk about the global risks report and how that sees things, but certainly societal fractures and wellbeing have shot up as business leaders think about risk.

Katharina Hesse: Alison, in your view, what are the major societal and workforce trends that are driving this growing trend for resilience?

Alison Martin: So, in the recent World Economic Forum Global Risks Report, you see societal risks have an increasing prominence than they previously have had. So, whether that's around people worrying about inequality, or around increasing polarization, the rise of societal risks is one that we've certainly marked. Now, I think for me, the interesting thing is actually when you look at the Executive Opinion Survey of the World Economic Report, because that's the one which looks at just what business leaders are worried about. So, if you look at the major economies, the G7 economies, they're worried about increasing inequality, they're worried about shrinking job opportunities. If you look at countries like the U.S., the UK, Canada, Germany, Australia—I mean you name it—they're even worried about wellbeing, the health of actual populations. Now, for these to have hit business leaders’ concerns, I mean on the one side maybe I could say that's not surprising. If you look at something like the OECD and the EU 27 report, they estimate that 20% of our population suffers from mild to severe mental health, and that costs us 12 billion working days a year in lost productivity. I mean the numbers are just astronomical. So, there's obviously a lot of underlying drivers for that, but that's certainly one of the main reasons, I think, that people are getting kind of increasingly concerned about this. 

One thing I was just going to add: The definition of resilience, obviously it's a lot of different things. So, it's your mental resilience, financial resilience, it's social, it's physical. And if we think of that financial resilience; there was a recent survey done [that found] nearly two thirds of workers don't feel that they're saving enough for retirement. So, we can also provide solutions to some of the concerns people have. 

Katharina Hesse: There's an interesting book about that topic, it’s called Leave With Zero. We'll talk about it in another podcast, maybe.

Alison Martin: It sounds interesting.

Katharina Hesse: Thank you so much for talking also about the data points that you build around these topics in resilience, linking them to performance, productivity, long-term competitiveness. I guess those are the data points that are quantifying the economic and business value of investing in this topic also as an organization, right?

Alison Martin: Yes, absolutely. I mean there's lots of different ways of thinking about it. I mean, we're an insurance company, and we do pay the cost of claims. So, one of the data points that is certainly very relevant for us is the fact that disability claims as a result of mental health of the workforce costs the insurance industry $15 billion circa per annum. I mean it's huge, but I think the important thing is what's the societal cost of that—to the individuals and to the businesses that those people work for. But as a number, I think that gives you an idea of some of the magnitude. Trying to look more positively at this, because I am an optimist, there was some interesting research done from Gallup data, which took 300 companies and was looking at the correlation between employee wellbeing, and the correlation then with customer satisfaction, with productivity of employees and, importantly, business performance. And, unsurprisingly perhaps, the correlation was very high. And then there was a very strong negative correlation to staff turnover. So, there is a very clear link that if you invest in supporting employee wellbeing and helping them build their resilience, then there's a huge payback for organizations. There was a little micro study done looking in a call center at higher wellbeing of the staff; what did that result in, in terms of additional sales? And there was a 12% improvement in sales, so there was a real impact. There were loads of studies done on students, very similar results. If you improve their happiness at the beginning of the day and [look at] how they performed repetitive tasks, there was about a 12% improvement there as well. So, there's a clear link, yes.

Katharina Hesse: That's very interesting. Let's move a little bit further into that topic: building workforce resilience in a disrupted world. How are major shifts such as AI adoption and increasing longevity reshaping or changing the workforce resilience?

Alison Martin: So, I think AI is certainly a topic that is causing a lot of additional stress to the workforce. You have many employees wondering what the impact is going to be on their roles. And I think as leaders, the obligation and responsibility sit with us to help bring people along the journey. AI is a really important tool—it's here, it's now, we will be using this in all businesses going forward. But that doesn't mean that people have to feel threatened by it, and actually the threat is more if they don't adapt, and if we're not supporting investing in re-skilling and up-skilling so that they're able to participate in it. Because the reality is, I mean you mentioned longevity, and with the changes to population structure, we are already facing population decline in many economies, particularly Western Europe today already. I mean, we compensate some of that through immigration, but not sufficiently. If you look at how the dynamics of the support ratio has changed—this is the number of the working age population who are supporting retirees. So, it used to be circa six, and now it's three, and it's going to be two soon, and this is before the Baby Boomers are fully exited, which is right now the Baby Boomers are exiting the workforce, that will be done in the next 15 years, and then we're really going to see a huge reduction in the workforce participation. And that means we must as we're thinking about how we're continuing to make productivity gains and how we're able to actually deliver great customer service, which is what businesses want to do. We all want to be high performing organizations. So, if we're not adopting AI to help compensate for some of the loss of the workforce that we're getting, how are we going to cope with that? So, to me, those two things actually, if you're taking a longer-term view, if you're looking out over the next 10, 20 years, it's a business requirement that we do this. 

Now, longevity has lots of other facets to it. I mean, I always feel I need to say this—people living longer is a great thing. It's not a bad thing that people live longer. It does, though, pose challenges to health systems and, as we know, there's already public debt challenges in many countries, so, an additional increase in the number of elderly people who have multiple health conditions, that's just an additional cost for systems to bear. And then with a lower number of working age, and [therefore] less tax revenues, obviously, there's a clear implication, and I think that's one of the things that's underpinning some of the businesses’ concerns around how health is being considered now and to what extent employers should get more involved in looking after employee health and perhaps stepping in a little bit more if they see government safety nets are reducing. 

Katharina Hesse: Absolutely. It sounds like there's both opportunities and risks for employers in these two topics, in AI adoption and longevity.

Alison Martin: Yes, absolutely.

Katharina Hesse: And I couldn't agree more on the generational, let's say, difficulties that we're facing, especially the Baby Boomers exiting the workforce. Interesting topic. In your view, how should organizations adapt to rising societal risks? You mentioned declining health, but also public service gaps and polarization. 

Alison Martin: As an insurer, we work in risk management. This is our bread and butter. So, I think societal risk is the same as any other risk. You need to understand what its potential implications could be to your business, and that means running scenarios and it means, importantly, measuring. For me, this is a really interesting part of the topic of wellbeing because for some, it may sound a bit fluffy, “why would you invest in personal resilience?” But actually, I think part of that issue is around measurement, and it's making sure there are really clear outcome-based measurements that people can point to, to say ‘well, if you invest in this, this is the outcome you're going to get.’ So, whether that's looking at reduction in absenteeism, improvements in productivity, etc., that can then really pinpoint to business performance. So, to answer the question about how you address societal risks— so, risk management starts with: Understand, measure, decide what kind of mitigating actions you're going to be able to take, or maybe you want to accept some of the risk, and then how do you build resilience? I mean, it's no different than talking about climate change or any other risk that we face, but I think this is an area that has not been highlighted—societal risks—as much as some of the other areas.

Katharina Hesse: Thank you. And Alison, can you share some examples of resilience initiatives, either within your organization or other companies, or through partnerships that have led to measurable improvements in wellbeing, engagement, and/or performance?

Alison Martin: So, one of the things that we're doing is we've partnered with University of Oxford's Wellbeing Research Center to look into defining a personal resilience index and drivers framework. So, back to my measurement point—which, I mean, we're all for data-driven insights, we work in the risk business. So, the idea of this is to really try and pinpoint: Okay, which of the different levers of personal resilience are going to be most impactful for your business? And then look what are quantifiable actions that can be taken to try and help you improve that? There's been so many studies done on different components, but what we're trying to do is bring it all together, to say actually, how could you get one overall index to give you an idea of the health of your population from a resilience perspective and then you can try and tie back and say what's my ability as a business leader to drive performance improvement?

Katharina Hesse: And that's for your workforce?

Alison Martin: So, that will be for our workforce, yes, but then we will be launching it externally as well. 

Katharina Hesse: Fantastic. Are there also actions that can be taken or that the employees can actively take as a result of that study? 

Alison Martin: I mean, there's lots of different components. If you think of the different elements of resilience, or whether we're talking about physical, or we're talking about sleep, we're talking about nutrition. One little anecdote on nutrition that I think is super interesting—it's not necessarily just what you eat, it's how you eat. So, the criticality of social interactions over food, it's well-known science that the more meals you're eating alone at your desk—so all of you Brits like me who eat a sandwich for lunch at your desk—that's not good for your social wellbeing. But each of these is backed by science on what are the micro things that can be changed. And then how can an organization, because it's all well and good having micro examples, but at an organization level, what does that mean? So, how do you invest in your canteen infrastructure so that you're encouraging a more social environment at lunch, as well as what are the nutrition choices you're making? So, I just give that as a little baby example, but there's lots, yes. 

Katharina Hesse: Thank you. And one of my favorite topics, what role do leaders play in talking about the importance of resilience and wellbeing, and how does this influence trust and engagement? 

Alison Martin: I think leaders play an absolutely critical role. Without role-modeling, I think any resilience initiative is simply going to be on paper and it's not going to actually come to life. Because if you look at some of the other micro types of interventions that can be done to improve resilience, it's taking those small breaks. It's not booking a three-hour meeting in one go and not having anyone get up and move. So, it's looking at okay, what's the recovery that people are able to get after they've worked on projects for kind of two weeks without sleeping enough. But leaders have to be willing to, (A) they want to measure some of these things, and then [B] they have to role-model: they don't book a three-hour meeting, they get up and they take a break, and they're happy to discuss and be very transparent about things like the importance of sleep. I'm a sleep geek. I will confess that now on this podcast. I want my eight hours of sleep. For me, that is what helps me recover and gives me the resilience to [face whatever] happens the next day. And there's always stressors in life, whether it's your kids or whether it's your work, but you need to be able to deal with it. So, you need to actually be willing to talk about that; to encourage other people [and say], it’s okay, this is normal life. Resilience is about accepting that uncertainty happens and you need to be able to adapt to it, and how do you put yourself in the best position possible to do that? 

Katharina Hesse: Thank you so much, those are such great examples. Do you do that and do you see the impact that it has when you talk about wellbeing and resilience?

Alison Martin: Yes, absolutely. But I think these are at micro levels, and what we need to do is be able to put it on a much bigger scale. And that's why I'm super excited about this personal resilience index, because being able to take it from being kind of small micro to actually something where we can roll it out at a much broader level and then, importantly, we can take it to our customers, and so we can help their employees on a broad base. So, I think there's lots more to come in this space.

Katharina Hesse: Yes, that's an example of how it's ultimately embedded in the company culture, right?

Alison Martin: Yes. 

Katharina Hesse: It's not about the policy, it's not about the break minute that you can take or a number of minutes that you can take, but really bringing it to life. And as a last area of focus, let's talk about the future of resilient leadership in society. Looking ahead, what should be the top priorities for employers, policymakers, and individuals to strengthen resilience more broadly?

Alison Martin: So, I think it's looking at it from a systems level, rather than trying to take a series of things on an individual basis. I'm going to go a little bit back to what I said before, that for societies, it's important to understand what we are trying to measure here, and then let's make sure we have the evidence and the data in order to do that. Now, some of the components clearly sit with the government and some clearly sit with employers, but it's about how the two interact. If I give an example of the pension provision systems. I mean this is one of the reasons for financial stress. A lot of employees remark that the fact that they're not sure about the safety of their pension in the future as one of the reasons causing stress. Well, employers have the option to try and help with that, working with governments. If you look at what Europe's doing with auto enrollment, which I think is a really important point to encourage all—to nudge all—citizens into actually also providing partially for their own futures, rather than just relying on the government. But this requires a kind of grownup conversation between employers, government, and also citizens around okay, who is going to be able to afford to pay for what in the future? And then the same is going to be true for healthcare, so it's not just around financial resilience. So, for me, it's looking at it as a system level, rather than just as an individual.

Katharina Hesse: Do you have more examples for these types of collaborations between business, governments, and research institutions potentially? Should there be more?

Alison Martin: Should there be more? Yes. I mean ultimately, if you think about the way that the information flow works between government, businesses, and citizens—let's look at it from an education perspective. So, we talked about the workforce changes and how that's going to give challenge, and a little bit about AI, but how are governments and employers kind of helping support what the education needs are, so that we are getting the workers into our companies that we want, that actually have the education skills that are going to be most relevant and useful for us? So, those areas where research institutions are absolutely critical in playing part of that role, because a lot of them are giving the education. So, how is that triangle actually really understanding the needs? I think here in Switzerland, I think it works really, really well. I think in some countries, perhaps they have a little more to learn about how you can have that kind of ongoing dialogue about, not just the needs of today, but the needs of the next five and 10 years, so that the people coming into the workforce have the skills that actually companies are going to need.

Katharina Hesse: Final question: Looking ahead, what one leadership capability or mindset will be most essential for executives navigating the era of rapid change, both in the workforce and in society overall?

Alison Martin: I don't think I'm going to surprise you, Katharina, with my answer here, but it's going to be a growth mindset. If you always believe that how you did it before is the way that's going to work going forward, I think that’s not the model that's going to be successful. So, being curious, wanting to understand what's the potential implications of AI going to have on our business model going forward? How can we deliver even better customer experience? How can we think about how we support our employees so that we help them build resilience, which allows them to bring the best version of themselves to the office every day? That requires us always to challenge ourselves and to be curious about okay, well what new things can we try? What can we measure?  And I'm a real believer in—Jan-Emmanuel De Neve, who we're working with at Oxford University, I will quote him. He said measure what you treasure. And I just think that's such a great line. That actually if you, if this is really important to your business—making sure that you are the high performing business who is going to win against the competition—then measure it, and then you can make sure that you're really having an impact.

Katharina Hesse: Thank you so much, Alison, for taking the time and also for your insight and perspective.

Alison Martin: It's a great pleasure. Thanks, Katharina.

Thanks for listening to The Heidrick & Struggles Leadership Podcast. To make sure you don't miss the next conversation, please subscribe to our channel on your preferred podcast app. And if you're listening via LinkedIn or YouTube, why not share this with your connections? Until next time.

About the interviewer

Katharina Hesse (khesse@heidrick.com) is a partner and a member of the global Financial Services Practice; she is based in the Zurich office.