Tag Archives: Steve Kronsnoble

3 Main Mistakes in Change Management

In my last blog, my engineer self admitted that the root causes for why core systems replacement projects don’t hit the mark in the business case are more likely related to people, not the technology. I stated that the business only changes when individual contributors each do their jobs differently.

Now let’s take a more detailed look.

There are many models out there that provide a framework for understanding change. One that we use frequently at Wipfli is the Prosci model, which is focused on understanding change at the individual level. Boiling it down to its simplest form, this model says the change must progress for each individual from awareness to desire to knowledge to ability to reinforcement.

Understanding that, Mistake #1 to avoid is measuring the need for change management based on executives’ paths, not their people’s. The executives responsible for the program and ultimately for the change management strategy, approach and investment are by definition the leaders furthest down their own change paths. That is, they are, in all probability, way beyond the awareness and desire stages. (Hint, hint: That’s why this core systems project is underway). And, not uncommonly, because of where they are, they may not understand the need to make a significant investment in change management.

Once you embrace the need for change management, there are an array of tools and techniques at your disposal. These include communications, sponsorship, coaching, training and resistance management. Mistake #2 to avoid is loading everything into communications as a one-and-done approach. In fact, I would guess that when most of us hear the term change management, we immediately think of communication. That’s good because change starts with awareness. But did you know that it takes something like five to seven communications for a message to be truly heard and understood by all? Remember that perfect project kickoff email you sent last week that summarized everything perfectly? Yeah – maybe 20% of your audience remembers it today. So communication must be multiple messages using multiple channels coming from multiple stakeholders.

Multiple studies over the years have reaffirmed the significant correlation between a project’s success and change management’s impact and, more specifically, the importance of the project sponsor’s role in both. Succinctly, the earlier the project sponsor is engaged in the project and the earlier the project sponsor embraces change management, the better the chance for success.

Mistake #3 concerns the project sponsor and her change management role. Just because you have a smart and engaged leader as your sponsor, don’t assume she knows what’s supposed to be done every week in a transformational core systems project if she hasn’t played that role before. For example, does the project sponsor know to build a coalition among the key managers and supervisors whom the affected employees will most want to hear from? At the end of the day, the employee will turn to his immediate boss and not the project sponsor to really get the WIIFM (what’s-in-it-for-me).

You get the idea. As much as agile project management and delivery approaches and methodologies have been embraced, used and hardened over the past 10 years, we need to do the same for change management.

Why Implementations of Core Systems Fail

As an engineer (at least that’s what my university degree says), I must say I like to solve problems. Big, ugly, complex problems can a great challenge.

We all know what has been happening with insurers’ core systems over the past several years. To respond to the challenging needs for product agility, customer-centricity and operational effectiveness, insurance companies are moving toward new core systems and away from the constraints of their legacy systems. And there are oodles of problems to be solved. Product modeling and patterns, configurability and customization options, integration and connectivity, external data sources, testing automation…it’s a tasty list, my friend.

And yet…and yet.

Even if these complex problems are nicely solved, many insurance companies fail to achieve the anticipated returns with their new core systems.

Over the past years of these types of projects, when we at Wipfli analyze the root causes, we find that the following risks have not been properly managed or mitigated:

1. Expectation risk – Are we all looking for the same things?
2. Acceptance risk – What could prevent us from leveraging this investment?
3. Alignment risk – What could prevent us from achieving the value we expect?
4. Execution risk – Are we getting things done effectively and efficiently?
5. Solution risk – Will this solution deliver on its potential?
6. Resource risk – Have we accounted for the total investment required for success?

What’s most enlightening about these risks is that five of them are about people and not technology. Only solution risk encompasses technology. As the engineer once said, “This project would have been a roaring success except for the people!” Don’t be that guy….

The desired future state following an implementation is only achieved when individual contributors do their jobs differently.

So, yes, systems projects are about the people.

The Insurance Agent of the Future?

Recently, my 80-something mother bought an iPad to replace one of the first models, which is now obsolete (can’t upgrade the iOS!). So, though she is an always-with-some-trepidation user, she’s no Luddite. After her second day with the new device, she called me with some alarm to say that someone named Siri was trying to hack into her iPad (for you non-iOS users, Siri is the name of the iOS speech recognition software – a new feature for my mom).

This got me thinking about big data and the role of the insurance agent in the future. My thinking goes something like this…

Insurance Agent of the Future

Insurance of the future will be beyond indemnification for losses (at an actuarially fair price, of course) and will include loss reduction in some way, whether through direct action or indirect advice.

Let’s think about home automation and monitoring systems, a.k.a., the connected home, or “telematics for the home,” delivered through companies such as Keen, SNUPI and Revolv. Think thermostats, video cams, carbon monoxide and fire/smoke detectors, storm shutter and roof single sensors, refrigerator and freezer sensors, door lock sensors, etc. The capabilities are going to be integrated and will involve big (data).

Some company – maybe insurance companies, maybe those giant B2C companies like Google and Amazon, maybe some others – will take all that data and present it back to the consumer in an intelligent manner. Here is where loss reduction becomes very interesting. Companies could take direct action through automated activation of alarms and shutdown of systems when storms are approaching. Indirect advice might mean notifying a homeowner of unlocked doors, foot traffic in the house and refrigerator doors opening and closing.

Where does the agent come in? Maybe Google or Amazon and ADT will just get this all to simply work: Download the app, and it tells you what to do. But maybe the consumer will want some help with all this data and all this activity: what filters to tighten, what sensors to de-activate and what data is needed to get the right coverage at the right price.

Maybe the Geek Squad needs to morph to the Home Monitoring Squad. And the Home Monitoring Squad sure sounds like the possible insurance agent of the future – tech-savvy, risk-savvy and comfortable conversing with 80-year-olds.