Tag Archives: leaders

Small Steps Drive Significant Change

Last week, I had the pleasure of working with a national retailer whose leadership team has established some bold goals to transform the culture and reinvent the customer experience. It’s a heady vision that, given their size and structure, will likely prove to be ambitious.

Yet, given the distance this organization must travel and the importance of the initiative, it’s not calling in the brass band, turning the organizational chart on its head or asking associates to ceremonially sign on to the new mission. Rather than taking big steps in the direction of the goals, the organization is consciously and deliberately taking small steps.

The first step leaders have chosen to take is modest and simple: They’re preparing store managers to have 10-minute conversations with their associates. That’s it. And they are banking on those small steps driving significant change.

The Small Step Advantage

The natural assumption that too many leaders make is that big change requires big steps. And certainly that’s one strategy. But the history books and business journals are littered with stories of audacious, big, visible change efforts that failed miserably despite elegant execution and colossal investments of time and money.

Small steps are a powerful and effective alternative for a variety of reasons.

  • They are doable. Leaders and employees alike operate in a time-starved environment where every minute matters. Give them a 17-step process, and it will likely be discarded before step 4 is even read. Undoable, unrealistic requests breed ambivalence and resistance, which create their own inertia to change. But suggest a small action that can be embedded into the workflow, and implementation is far more likely.
  • They are sustainable. Most change requires a long-term commitment on the part of management and employees alike. Genuine transformation doesn’t occur quickly. As a result, everyone must pace themselves. Big requests, extensive demands and complicated actions may be implemented briefly; but people quickly tire, burn out and turn their attention to other matters. By contrast, smaller, incremental steps can be maintained over time, enhancing the chances of ultimate success.
  • Missing one or taking a break isn’t a showstopper. When what’s expected of others to support change is substantial, it becomes a bigger piece of the puzzle. Lose a few pieces, and the picture becomes much less clear. But when more people are contributing in smaller ways over time, missing pieces create less significant gaps.
  • The effect is cumulative and reinforcing. Small steps beget more small steps, with each building on the other. When leaders or employees take action and experience positive results, the satisfaction creates an upward energy spiral and encourages more of the same behavior. Over time, these small steps can contribute to a self-reinforcing tornado of commitment and action in support of the desired change.

So the next time you’re faced with implementing an ambitious change, challenge the natural inclination to think big. Instead, think small – doable and sustainable. And consider:

How do you eat an elephant?
One (small) bite at a time.

Innovation in Insurance Begins to Refocus

With today’s fast pace of change, innovation is no longer a nice-to-have initiative, but rather a must-have, strategic mandate that is defining a new era for insurance – and separating future winners and losers. Today, it is not any one thing that is creating change, but the convergence of many things that are creating a seismic shift.

Strategy Meets Action (SMA) has actively tracked and promoted innovation in the marketplace for several years and has been publishing formal innovation research since 2012. In our latest report, Innovation in Insurance: Expanding Focus and Growing Momentum, we see continued progress, but with a refocus. SMA believes this reflects the realization that modernization of core systems is a foundational requirement for innovation.

At the same time, insurers’ innovation approaches and efforts are broadening. Insurers are getting outside-in views, engaging in open innovation and developing an ecosystem of outside resources to fuel the innovation journey. This move reflects a best practice from outside the industry: acknowledging that no business can expect to harness the future and all its conceivable possibilities on its own.

Within their ecosystems, insurers are primarily engaging with agents, business partners, software partners, customers, other insurers and a supply chain as catalysts for innovation. However, more outside-in relationships with high tech, other industries, futurists, venture capital firms and academia are beginning to take shape, as well. The ecosystem is gaining importance because leading insurers recognize that day-to-day operational demands mean there is a lack of time and resources for tracking, assessing and putting the implications for insurance into context. Also, the whole network benefits from the integration of new thinking as the input of the outside organizations helps to break down legacy assumptions.

The expanding focus and growing momentum for innovation is reflected in some key survey results, including:

  • More than a fourth of insurers (26%) have focused on innovation for five years or more, and 33% have focused on it for two to five years. That puts 59% of insurers focused on innovation for the last two years, highlighting the growing momentum. A majority of further 32% have made innovation a focus for two years or less.
  • Innovation leadership and organizational approach takes many different forms. Only 7% of insurers have a dedicated innovation area. More than half of insurers (51%) have no single area of the organization leading innovation. Nearly 28% of insurers have their strategy or R&D leadership/areas lead innovation. SMA believes this reflects the resurgence of strategy and R&D to provide an enterprisewide approach for innovation, maximizing the strategic impact and value of innovation initiatives to the organization’s Next-Gen Insurer vision and strategy.
  • Encouragingly, more insurers believe their investments are positioning them well ahead on the innovation journey as market leaders (9%) and movers (33%) as contrasted with those that are at the early stages of the journey as mainstreamers (22%) and those at the very beginning stages or not focused on innovation as laggards (9%). SMA believes this reflects the broadening focus of continued implementation of modern core insurance systems and innovation.
  • The top four industries influencing insurance in the next year are: healthcare (46%), with the potential influence of the healthcare insurance exchanges; high tech (45%), with the potential of Google, Amazon and Apple entering or disrupting insurance; telecom (32%), with the race for the customer’s connectivity, data and services; and government (32%), with some states aggressively piloting new technologies such as driverless vehicles.
  • The focus and business drivers for innovation are changing, reflecting the shifting landscape of influencers, threats and competitors for insurance. Enabling growth (42%) and profitability (30%) moved into the top spots, up from second and fourth in 2013. But a bigger shift has also emerged, reflecting the demands of the digital revolution and outside industry influencers. In 2013, improving existing products and providing great service were in the top six. In 2014, there is a shift in focus to developing new products and engaging and strengthening customer relationships, which is directly related to meeting the new expectations of customers.

A new future is rapidly unfolding, and the pressure is on. Innovation can never cease. It must advance with urgency. Each and every day, insurers must recommit to their innovation journey and the culture they have created for it – and avoid falling into an operational trap.

As Charles Darwin said: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Innovation will be a journey of great disruption, great opportunity and great change. Have you started your innovation journey?

Who Owns the Customer Experience?

Who owns the customer? For insurance companies that work through intermediaries, it’s a controversial question that often stirs spirited debate between carriers and producers. But there’s another question that’s even more important: Who owns the customer experience?

Regardless of who insurers think owns the customer, the reality is that key parts of the policyholder experience are shaped by external parties—the agents, brokers and financial professionals who distribute insurers’ products.

This presents a difficult challenge for insurance companies, many of whom have kicked off customer-experience improvement initiatives in recent years. After all, how do you holistically manage the customer experience when you don’t control it in its entirety?

Some carriers skirt the issue by focusing on what they do control—customer touchpoints such as billing, correspondence, 800-line interactions, etc. That’s a reasonable approach to start with, but it has its limits.

Consumers don’t always know where the lines are drawn between carrier and agent, where the handoffs occur between the two parties. Their experience, and overall brand impression, is shaped by a wide array of touchpoints spanning pre-sale to post-sale, field office to home office.

For this reason, it’s neither practical nor prudent for carriers to ignore those elements of the customer experience that are administered by their field producers.

But how can a carrier insert itself into aspects of the customer experience that are clearly overseen by the producer? How can the insurer propagate customer-experience best practices beyond the walls of its headquarters and into its field offices, where so many significant consumer interactions occur?

Whether the company works with captive agents or independent brokers, this can be a thorny issue. Many financial professionals consider themselves to be entrepreneurs, and they have strongly held opinions about how to run their businesses.

Overcoming that sentiment requires some diplomacy. If producers sense that the carrier is encroaching on their territory, dictating the “right” way to do business, then friction will ensue, and the insurer’s customer-experience improvements will be relegated to the home office—a poor outcome for carrier, distributor and their shared customers.

So, if you’re an insurer looking to engage your field force in a constructive effort to improve the customer experience, consider these five tips:

1. Acknowledge shared ownership

Disarm territorial sensitivities by readily acknowledging that you don’t own the whole customer experience. Neither the carrier nor the distributor can claim such ownership, because each plays an instrumental role in shaping policyholder impressions.

Such an admission by carrier executives sends an important signal to the field, opening the door to a more collaborative approach for shaping the customer experience, from pre-sale to post-sale.

2. Make the case for action

Demonstrate to field partners, in a vivid and compelling way, why focusing on an improved customer experience is smart business.

The field may acknowledge that happy, loyal customers are good for business —but do they truly grasp how powerfully the customer experience can influence the top and bottom lines? Particularly in the insurance industry, given the economics of up-front commissions and long product tails, small improvements in retention can have a surprisingly significant impact on profitability. Even just from a sales standpoint, an increase in qualified referrals from positive word-of-mouth can be a game changer for any insurance agent/broker.

Perhaps one of the most convincing illustrations of how a great customer experience drives business results is an analysis of stock market performance for customer-experience “leaders” and “laggards”: For the past six years, customer-experience leaders generated a total return that was three times higher on average than the S&P 500.

This is the kind of head-turning data that insurers should put in front of field producers who are skeptical about investing time, energy or money into improving the customer experience.

Whether you’re a public or a private company, the message here is clear: A great customer experience pays off, paving the way for higher revenues, lower operating expenses and better overall financial performance.

3. Educate and equip

Given their entrepreneurial disposition, most agents and brokers won’t take kindly to having the mechanics of their organization’s customer experience dictated by some far-removed insurance company.

Instead of prescribing solutions, carriers would be better served providing tools and education to their field offices. In this way, the insurer can help equip its producers with the knowledge they need to effectively diagnose, and then differentiate, their organization’s customer experience.

That’s a much better solution over the long term, as it helps the field office embed customer-experience management best practices into its operations, as opposed to just tweaking a few isolated customer touchpoints.

Note that this is about more than just traditional “customer service” training. It’s about giving the field office a strategic understanding of the operating principles that customer experience legends rely on to create raving fans.

What great companies like Amazon, Apple, Disney and Costco have in common is an ideology around the design and delivery of their customer experience (see the sidebar that follows). Help your field understand and embrace a similar ideology, and you’ll influence their business practices for years to come.
4. Open the feedback spigot

One example of an ideological component that customer-experience legends share is a commitment to soliciting and acting on customer feedback.

Oftentimes, there is an arrogance in organizations— a belief among executives that they know what delights and what frustrates their customers, what will strengthen their brand experience and what will weaken it.

But as J.C. Penney learned during its recent meltdown, businesspeople can have a myopic view when it comes to understanding what truly makes customers happy.

Help your field offices avoid that pitfall by supplementing internal views with external ones. Carriers can use their purchasing power to bring robust “voice of the customer” survey programs to their affiliated agents and brokers. At the very least, they can offer field offices tutorials about feedback instruments.

Armed with these feedback instruments, your field offices can cultivate customer insights that will help them first shape, and then continually recalibrate, their experience improvement efforts.

5. Co-create the experience

For some parts of the insurance customer experience, field and home office interactions are so intertwined that it makes sense to tackle them with a united front (application and underwriting being a classic example).

This is perhaps the highest step on the customer-experience management maturity curve, where manufacturer and distributor work together to shape an experience that’s impressive and seamless.

Assuming all parties have been educated in the same customer-experience engineering principles, it can be valuable to bring field producers and home office representatives together to dissect, diagnose and redesign a particular piece of the policyholder journey.

By incorporating field and home office perspectives up front, a joint experience design effort is likely to yield a better outcome for all involved.

In today’s social media-connected, information-rich marketplace, customers are more empowered than ever. Nobody truly “owns” them.

But ownership of the customer experience is a different matter altogether. Great companies do take ownership of that, by very deliberately managing the many touchpoints that shape customer perceptions. Great companies even seek to influence parts of the experience that, on first blush, might seem out of their scope. (Consider how Amazon famously obsesses over the experience of physically opening a package once you receive it from their shipping partners.)

For insurance companies that don’t sell directly to consumers, the path to a differentiated customer experience must cross through their field offices—hence the importance of involving and influencing that key constituency. By deftly engaging distributors in the customer-experience improvement effort, insurers can make progress on two important fronts—creating a more positive impression not just on their policyholders, but also on their producers.

The 'Secret Sauce' of Customer-Experience Legends

Companies that do customer experience well tend to use a specific set of operating principles to help shape their customer interactions, from sales to service. The principles that elicit customer delight are remarkably consistent across industries and even demographics.

Below are three examples of such principles, which fans of Amazon, Disney and Ritz-Carlton are sure to recognize:

1. Make it effortless

Be it at point of sale or point of service, the less effort customers must invest to accomplish something with your company, the more likely they are to be loyal to your firm. Look for opportunities to minimize the amount of physical and mental effort that people must expend to, among other things, understand your value proposition, navigate your product portfolio, interpret your customer communications and secure post-sale service. (Case in point: Amazon’s patented One-Click purchase button, which makes it absolutely effortless to buy from them.)

2. Capitalize on cognitive science

Customer experience is about perception, and there are proven ways to leverage principles of cognitive science (i.e., how the mind works) to improve people’s perceptions about their interactions with your business. One example of this is giving customers the “perception of control,” because it’s human nature that we feel better when we’re in control of things and ambiguity is removed from our lives. Something as simple as clearly setting expectations for customers can make all the difference—e.g., how long will I be standing in this line, how many steps are in this purchase process, when will I next hear from you? (Case in point: DisneyWorld’s FastPass, which lets park guests avoid standing in line for popular attractions, making them feel like they’re more in control of their vacation.)

3. Be an advocate

It’s rare that people see companies paying more than lip service to the concept of putting customers first. For this reason, when people come across a company that truly advocates for its customers in a very tangible way, it cultivates stronger engagement and loyalty. One decidedly low-tech but highly effective way to accomplish this is by fostering a workplace culture of exceptional ownership. When your front line—the people actually delivering the customer experience—take personal accountability for owning every request that comes to them, it projects a refreshing sense of advocacy that will distinguish your firm from the “not my job… pass the buck” mentality that customers typically encounter. (Case in point: Ritz-Carlton, whose staff, when asked for directions within the hotel, will refrain from pointing guests in the right direction—instead, they personally escort them, to ensure the guest gets exactly where they need to be.)

This article first appeared in LOMA Resource.

The Opposite Of Leader

Sometimes, a description of what something is not helps to also describe what it is.

This past week, we had another Lead Change Tulsa breakfast dialogue and the topic was Effectively Leading Diverse Organizations. Over 40 people, many new to Lead Change, joined us for this discussion.

Teri Aulph (@TeriAulph) generally enlists the panelists and we allow each to open the dialogue. Chery Gegelman (@GianaConsulting) moderates and facilitates with grace and involves everyone in the room to the extent they’re comfortable. Their skill at managing these events enables me to relax and think.

This day, I chose to study the people because the group was more different from me than any other breakfast discussion we’ve had. The topic of diversity almost by itself brings out a more diverse crowd. The stories and the ideas shared opened my mind and challenged my thoughts.

What makes a leader? What path were these people on to develop as leaders?

“Diversity is simply hearing every voice.” Teri Aulph

As a committed contrarian, I was reminded of ideas I’ve shared before about followers and leaders, about acting out roles vs. who we really are (character), about positional authority vs. character-based authority.

In some way, everyone in the room was a leader, and yet everyone enlisted to both share and learn. Everyone looked to grow and help others grow, stretch and help others stretch. We all instinctively knew that simply being better made our community a little better, but that wasn’t enough.

The stories of many of the panelists and of the attendees were about times when their opinions didn’t matter, and when they felt all alone or when they had been pre-judged and shut out. Then I thought about a book I’ve recently read titled Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them All by Jim Collins and Morten T. Hansen. One chapter in the book is about luck and the authors identify that a key distinguishing factor between the great companies and the not-so-great companies is their “return on luck or ROL.” Great organizations “got what I would describe as a better return on luck…” both good luck and bad luck.

Every person in the room came from a less-than-ideal circumstance. But every person in the room chose their response to their circumstances, their heritage, their surroundings and the behavior of others. Every person in the room chose to be a leader and lead themselves and their reaction to each situation. They could have chosen the mindset and resignation of victim, but instead, chose to take responsibility for their attitude and their actions. They led themselves into a different mindset, chose a non-standard response, and made a positive difference!

Victim is my new word to describe the opposite of leader. No one likes being a victim, but I catch myself blaming others for my circumstances and my position and at that moment I become a victim. When I remember I can always choose my attitude and my reaction, I become a leader, at least of myself.

This group of people chose not to be victims. I’m better for simply spending 90 minutes in their presence appreciating their stories and believing I have the power to choose.

Today, will you be a victim or will you take the lead? When do you catch yourself withdrawing from the role of “leader?” What would you call that if not “victim?” What other words might you use to describe the opposite of “leader?”