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Wisdom Insurance – the NBA’s Modern Elder

by | Jun 13, 2021 | Modern Elder, Open Leadership

Knowledge speaks, wisdom listens.
From an earlier post: 6 Components of Wisdom

Love this from Chip Conley (past guest on WhatComeNextLive here) on his Wisdom Well blog

..let me introduce you to the Miami Heat who recently got knocked out of the NBA playoffs. At 40 years old, Udonis Haslem makes $2.5 million a season to play for the Heat, yet has played just 15 games in the past three years. He played 3 whole minutes this season. That’s $833,333 per minute!!!!!! What a waste, right? Send Udonis out to the NBA old folks home!

Yet, the team deeply values his role as a mentor, culture-creator, and a stable presence for the younger players as evidenced by this recent article. As one former player says about Udonis, “You’re undervaluing seat belts in a really expensive Ferrari. Nobody ever cares that there are seatbelts in a Ferrari, but Udonis Haslem is the seatbelt — if anything goes wrong, he locks them up.”

Maybe we need more OG’s (Original Gangsters) in professions that skew young? What are some professions that could use a little more wisdom?

Chip Conley

During the beta season of the Modern Elder Academy in 2018, I went there and spent time with Chip and amongst a cohort that has meant and still means a lot to me (we still have a “circle” call every week, over three years later), Chip and I bounced some ideas around and coined the idea of “Wisdom Insurance“.

One “Wisdom Insurance” idea I have shared and worked with several large corporations on parallels his NBA example above. Udonis Haslem makes a fraction of the salary he would have earned earlier in his career, yet still a significant amount and he remains energised to be part of the team as long as he can add value, whether on court or not.

The idea I have shared and that several corporations have implemented is to consider the future for their top leaders once they hit the age where they would typically consider retiring (or “being retired” by the company!) in order to a) move on to the next phase of life, and/or b) make room for rising stars to take their place. To me, this can be a loss for both the individual and the company. The individual may have passion for the company and decades of experience, so to simply switch that off overnight seems like an odd binary choice between “employed” and “retired”. What if, instead, they “rewire” to a space where their role is a floating one, as mentor, coach, guide to key leaders and areas of the business. Give them freedom by removing their profit centre/business unit responsibilities, take pressure off the company and off them by (say) halving their remuneration cost. They will still earn significantly, yet have the freedom to roam and be pointed at people and business units that could use their support.

To give a hypothetical example, of wisdom insurance, imagine a c$1bn company chose to commit $1m a year to this “wisdom insurance policy”. It could look like this:

  • Select four leaders are top elite remuneration level, say $400-$500k remuneration on average
  • Instead of switching them off (retirement), instead rewire them to earn £200k each, so an annual budget of $800k
  • With the remaining $200k, allocate them a shared Executive Assistant, a travel budget (this idea predates Covid!), and, key, shared access to a top coach that can support all of them with moving into a coaching/mentoring space.

Udonis Haslam is $2.5m of Wisdom Insurance annually for the c$1bn enterprise that is the Miami Heat, now imagine FOUR leaders roaming around a large corporation with decades of experience, all of only $1m? Wow, what an amazing ROI such Wisdom Insurance creates!