--For transformation to occur, key stakeholders must have the five C's in place: customer, capacity, competency, culture and communication.
Sixty-one percent of people say resources (a category that includes both cost and people) are the biggest challenge to digital transformation, according to a poll during an Accelerate webinar hosted by Equisoft. But life insurance companies can overcome this challenge by dropping their technology-first mindset and adopting a people-centric attitude.
For change to be successful at life insurance companies, key stakeholders must have the five C's in place: customer, capacity, competency, culture and communication. For life insurance companies looking to extract the anticipated value from their digital transformation, here are a few suggestions on how to improve each of the five.
Insurers cannot forget what drives these initiatives to begin with: the customer, both the agent and policy holder. Companies need to keep the customer at the center of decision making at all levels. This keeps both IT and business on the same page and working toward the same goals. Digital transformation cannot be a pure IT strategy; it needs to be a business transformation strategy. Organizations need to preserve products and processes that engage customers but also build new capabilities to support goals to scale and innovate to enhance engagement.
While technology is still a key component of digital transformation, the journey can’t succeed if employees don’t have the capacity to oversee the implementation and maintain the existing legacy systems during the transition and avoid compromising their other projects.
When it comes down to it, the human capital will end up absorbing the change being pushed by leadership. It may not always be possible to have a dedicated team to oversee the transformation, especially in life insurance organizations that are limited in people resources and budget. So insurance companies should consider looking to outside technology companies for assistance with the transformation.
Not only will this offset some of the heavy lifting typically placed on internal employees, but it may also help organizations think outside of the here-and-now to gain a bigger picture of how digital transformation fits into overall organizational goals — both short-term and long-term. Collaborating with external partners can also help with establishing a stakeholder chart, including analyzing who will be the most affected by the transformation and what needs to be done to make the transition smooth.
When you think about change in organizations, it’s not just about modifying workflows, it’s also about changing the skills that people need to leverage to get business done. An organization may be able to operate legacy systems, but it’s another matter to overhaul those and build updated or more modern solutions from scratch and educate others on how to use them. While organizations might have a set of people who are experienced in transformation, the organization as a whole is unlikely to share this expertise. Teams need to have the right digital skills and if those aren’t in place yet, an upskilling process must be set up before life insurers can even continue.
When faced with differing competency levels, a solution is to take the greenfield approach, either on your own or in collaboration with a trusted technology partner. With the greenfield approach, instead of modifying existing systems, the new platform is created from a clean slate without the need for new code to be written and with no restrictions or dependencies on legacy technology. This allows insurers to create an open environment for integration with innovative digital insurance technologies that streamline new business and underwriting processes. It also gives insurers time to roll out the change and adopt additional competencies required for success.
While this can be a good solution, companies need to make sure they understand how their system-by-system greenfield approach aligns with the overall digital transformation plan, shifts to digital thinking, ensures the flexibility of the new system and obtains buy-in from all stakeholders.
A more intangible key to a successful digital transformation is culture. When embarking on this kind of journey, organizations need to create a culture that embraces change, adaptability and resilience. Participants need to be okay with being uncomfortable and acknowledge shortcomings when they occur. If your stakeholders aren’t on board with technology change, then they’ll become roadblocks to your success instead of champions.
Implementing this type of change-oriented culture requires buy-in from organizational leaders, both at the C-suite level and the middle management level. Company leaders need to work toward creating and sustaining an environment in which people want to be part of change and pushing the business toward a more market-competitive position.
But most importantly, companies should empower employees to make decisions about the project and foster ownership over the change management experience. This gives the employees a voice and encourages them to become far more involved in the process. They'll be more inclined to think through what obstacles may arise, what opportunities the new solution may create and how best to take advantage of the transformation. These are all great outcomes for the organization and not always seen in some of the “top-down” initiatives.
To create this culture of change, life insurers need to make sure all involved parties are aligned around a shared digital transformation vision. Additionally, key stakeholder group representatives should be looped in as early as possible, especially during the planning and scoping stages. If everyone has had a hand in building the vision, it’s easier to foster enthusiasm for the project and overcome obstacles, should they occur.
See also: Insurtechs' Role in Transformation
Just as leaders need to foster a culture that’s accepting of change, they also need to openly communicate what the organizational goals are, how the company is working toward those goals and what additional asks are needed of employees. Transparency will ensure that employees understand their roles in this journey and how they can contribute.
Part of being honest is being forthcoming when mistakes are made. It’s this truthfulness that will establish a sense of trust within the organization and give leaders an opportunity to demonstrate initiative based on how they’re rectifying the situation.
Communication goes both ways. Leaders need to be open to receiving and incorporating feedback from employees to create a digital transformation pathway that works for everyone. Doug Lipp, the former head of Disney University, discussed the "walking the park" approach during his keynote address during last year’s Equisoft Elevate event. By frequently and consistently walking the park — or connecting with key stakeholders to gain a fresh perspective on where changes and improvements can be made — life insurers can learn about pain points in the value chain and identify ways that their digital transformation efforts can alleviate them. When you establish regular discourse as a default rather than the exception, you provide clear paths for employees and partners to share ideas and concerns.
Change management is what drives success, but communication is what allows you to create opportunities for your team to be successful.
Technology may be the impetus for digital transformation, but the people behind the initiative ultimately drive the change and determine the journey’s outcome. Change management, coupled with effective communication and a focus on people, creates opportunities for insurers to succeed. By placing your people at the heart of digital transformation, you can navigate the challenges of digitalization and harness its full potential.