Businesses that want to sustain long-term success must pay more attention to managing business cycles and their corporate culture, in addition to executing effective capital and risk management strategies.

And Brian O'Hara, CEO of XL Capital, stressed that proper execution of strategies to manage these elements in a company has never been more important. He was speaking at the 40th annual 'Benchmarks of Success Seminar' of the International Insurance Society (IIS) in London last week. Mr. O'Hara was a participant on a panel which included John Coomber, CEO of Swiss Re and Douglas Leatherdale, chairman of the IIS.

In terms of cycle management, he said that cycles are created and driven by the actions and behaviours of managements and underwriters, as well as being influenced by economic factors such as interest rates. He added that external pressures for companies to follow the market and the competition are powerful, and managements are also keenly sensitive to the expectations of owners and analysts.

"But customers are better served with consistency of product," said Mr. O'Hara. "Consistency requires a fundamental approach to the business ? pricing for exposure and disciplined underwriting regardless of the market, competitors and the customers' short-term wishes."

He said that underwriting must be proactive not reactive, and should focus relentlessly on exposure, not just recent experience.

"Managing the process requires changing behaviours and basing decisions on the best judgement of the underwriter. That means the need for technical underwriting skills and more importantly an underwriting culture is absolutely critical."

But he cautioned that "all the underwriting processes, initiatives and controls in the world will fail if the senior management's focus, message and compensation system are flawed."

Addressing the issue of corporate culture Mr. O'Hara said that management should see a firm's culture as a key differentiator in an increasingly competitive business environment.

"Products are highly visible and easily copied. Your people and your culture are not so easy to reproduce," he said. He added that investing properly in a company's intellectual capital via effective training and development programmes to foster a performance-driven culture creates a competitive edge for an organisation.

And building a team of technically qualified and experienced employees ultimately supports proper execution of strategies related to a company's goals in all areas, including effective capital and risk management.

"Execution has become the new business mantra," said Mr. O'Hara. "Corporate trait by corporate trait, companies are growing their own execution cultures."

He said that the attributes of successful execution ? "building an organisation focused on getting things done" ? include a clear vision, mission and business plan, a focused business model, non-bureaucratic decision-making processes, expense management, strong consistent earnings and a diversified earnings stream, branding and customer service.

"Execution capability needs to be embedded in management processes, relationships, measurements, incentives and beliefs," he said. "Superior and consistent execution occurs (in a company) only when the actions of individuals within it are aligned with one another and with the overall strategic interests and values of the company.

"Execution is reflected in performance; what every employee does every day, aggregated across the organisation."

Mr. O'Hara added that the best organisational designs are adaptive and self-correcting and these can take years to put in place.

"But organising to execute is a true competitive advantage," he said.