Transforming the insurance sector

David Greenwood, an accomplished independent transformation expert in the insurance sector, explains how to successfully deliver a transformation programme

Transformation is the new black, especially when it comes to all things digital. It’s in vogue and fast becoming timeless in its ability to enhance and improve the way in which organisations operate. However, in keeping with this metaphor, transformation can become continuous without really being noticed or valued. Unless bold, dynamic and resolute, it won’t make an impact. Transformation must be comprehensive. Where we once looked at just a change in technology or system, the change must address the ethereal concept of culture; the people, the behaviours, the working practice and the values of the work force. I like to make this point by likening transformation to giving a new car to a cyclist; this is only productive and sensible when there is the desire and purpose to drive the car, and the skills to do so. 

We tend to look at transformation as a long-term, organisation-wide enhancement of process to increase productivity and the overall robustness and efficiency of an organisation. But whilst we are planning to future proof our businesses, there is a level of uncertainty that must be factored in. As an industry centred on risk, it is ironic that often transformation is unsuccessful because the long-term strategic plan fails to factor in how quickly technology, regulation and industry standards move on. This has at times resulted in one transformation delivery rendered obsolete by a new, more pertinent transformation need. 

So how do we make sure that transformation does what it says, and we don’t find ourselves in what has been a common situation of unsuccessful programme delivery? How can we ensure the transformation doesn’t overrun, max out the budget, result in a cynical workforce and no real change? 

First and foremost, the principal management team must be aligned and have a shared vision. As the core drivers of the transformation, it is critical that every executive is not just engaged but is an advocate and has the same understanding of the programme. There needs to be consensus on what the objectives of the change are in all regards of the programme, looking at the technical processes and systems and the people management. This foundational layer must be established with an aligned management team working unitedly towards the same priorities. 

This first step won’t come without its challenges. Transformation can be an ambiguous concept that requires definition in scope from the management team. The objectives must be aligned to an action plan with a specified timeline of the journey and contingency planning – no transformation comes without a few hurdles to overcome so there needs to be allowance for this. Unlike delivering a project, a transformation roadmap considers the impact on every part of the organisation. From the organisational structure to the individual processes in procurement, finance or HR, there has to be sequencing to join the pieces of the programme together. 

A transformation does go further than organisation-wide however, it reaches supply chain-wide. Critically, many of the recent transformations across financial services, and increasingly in insurance which is playing catch up, have been digital. Legacy systems are being updated and digital products are being developed which are directly impacting third party suppliers and the end customer. This adds to the people strategy requiring not just the employees to be trained on the systems but everyone up and down the supply chain to engage in the change. 

Organisations need to make an individual decision on their priorities of the transformation. There is a trade-off to be made between time and money. Increasing the length of the programme allows for a more gradual roll-out, facilitating stakeholders to become more accustomed to the change which often comes with long-term successful transformations. However, this comes at the peril of financial investment and limits the opportunity to quickly remedy a necessary change. There is also the challenge of winning and retaining ‘hearts and minds’ over an elongated timeline. Plain and simple, it’s not an exact science. This decision will differ depending on the needs of each firm, and also the proclivity to adopt change. 

In the insurance industry, one of the main transformation programmes currently is around embedding a more agile and dynamic working practice which centres around a behavioural change. Undergoing a shift in people is challenging to say the least and requires years, not months, of incremental change. Adoption of change tends to be particularly difficult in the insurance industry where there are long-standing employees that are set in their ways. Without a doubt, communication is the key to addressing this; it is the oil that makes the machine run. However, the machine won’t run on oil alone. Feeding into this, there must be nudges. I have seen organisations change processes so they can’t be done as they were before, but the change shouldn’t always be top-down requirements. There needs to be an element of empowering employees and opening opportunity for participation in the transformation. For this, management need to know the right questions to ask to involve employees of all levels as a team. 

Measuring progress of a transformation is dependent on the vision of change. The objectives need to be measurable to evaluate success and determine if further work needs to be done. However, areas of change, such as colleague engagement, are abstract to quantify. Some organisations have used the idea of ‘happiness indices’, which granted do impact staff morale, but they aren’t indicative of long-term success. There should be set milestones and associated timescales to track progress and stages of development. And importantly, celebrate the successes; this will combat change fatigue and keep the workforce engaged and focussed. 

And to lead all of this? A seasoned independent transformation expert of course! Their experience of delivering transformation programmes time and time again brings a new perspective to the team. As an external hired expert to focus solely on the programme, they can immediately integrate into a business and have a distinct understanding of the situation and needs of the company but also have an impartiality from a results-focused view of the programme. An independent professional will undoubtedly help drive and deliver a successful transformation. 

For more information please contact Adam Gates.