Tag Archives: strategic business transformation

Getting to 2020: Redefining the Culture (Part 3)

This is the third in a series of four articles that offer a “road less traveled” to Agency 2020. The first article focused on your agency in the marketplace’s current reality. The second article considered the world as it might be in 2020. Today, we address the processes necessary to ensure you have the “seed corn” to grow the culture and structure necessary to produce Agency 2020 and win in the marketplace of tomorrow.

Mohan Nair, in his book, Strategic Business Transformation, diagrams a world of yesterday where 80% of change was incremental/cyclical and 20% was structural/transformational. Today, he says, “When the unknown are threatening every variable we have counted on, 80% of the variables that shift are structural while 20% are predictable. We cannot use the strategic data used in the past to find our ‘true north.’”

Your successful organization today is driven by its culture: “the house rules,” “what’s tolerated.” This organization and culture were created for the world of yesterday (“Daddy, may I?”) and today (“What do our carriers say?”). If you believe the world of 2020 will be different, you must create a culture appropriate for that new world.

The Gospel of Mark (3:25) and then Abraham Lincoln stated that “a house divided cannot stand.” This was true in their world of incremental change. Theirs was a world that moved at the pace of a tortoise. Tomorrow’s world will move at the pace of the hare (but never stop for a coffee break).  As has been said: “It’s not the big that eat the small. It’s the fast that eat the slow!”

Most people are reluctant to change. As Maxine puts it, “Change is good as long as I don’t have to do anything different!” In your organization, most folks are comfortable in their jobs, see the world as it is and are terrified that things will change. A minority of folks who are enthusiastic about the new, virtual world and global economy see the world as it will be and are terrified that your organization won’t change.

Your house is already divided.  What you need to do is merely focus each segment on the role right for them.

Both groups are necessary for success, but you must answer one question for each group and each individual. WIIFM? – What’s in it for me?

Do this, and they’ll embrace your plan; ignore WIIFM, and they’ll sabotage your future. Be respectful of all. Understand that there are different “tolerances” for risk and that people discover, learn and adapt at different speeds.

Gather your team. Put them at ease. Make the environment safe for them. Explain that you want to structure change to give every contributor an opportunity to continue their success today and find the right fit in the world of tomorrow. Celebrate your past and thank them for their participation. Clearly articulate your embrace of the inevitable change necessary for tomorrow and your commitment to your team’s success in the future.

Announce your plans to begin an Agency 2020 initiative. Explain that to build a foundation for success you need two teams. This process will not be instead of their existing roles but as an extracurricular activity. This initiative is about assuring a future with opportunities for each other. This is about each voice being heard.

The first group will immediately focus on the existing organization – making it more efficient and effective to create the “seed corn” (profits) necessary to finance tomorrow. The group’s task will be to create an operational “to do list” defining and acting on what is necessary for enhanced success today and to quit doing those things carried forward from yesterday but no longer needed today – “we’ve always done it this way.”

The “tomorrow team” will be the young at thought and the young at heart. They will be your pioneers. They will be charged with discovering tomorrow as it will be and creating a blueprint to build your organization as it must be to fit in 2020. This process is not intended to exclude the traditionalists. Both teams will be encouraged to share their discoveries and enthusiasms – to create excitement about today’s improvements and refinements and tomorrow’s innovations.

Don’t create competition between the teams – encourage collaboration so that respect and trust will build. This will work because each group is focusing where “they live” – their comfort zone — and you are not forcing them, at this time, to go to where they don’t want to be. Assure all team members that, as the blueprint for 2020 is designed and new roles are defined, each person on staff will have the right to be considered for jobs right for them and your organization. Promise them the training necessary for success. If they can’t or won’t fit into the world of 2020, facilitate their exit. Make it as painless as possible.

For the Today Team, some ideas to consider and questions to ask (there are more):

  1. Focus – take out the microscope and study every function you perform.
  2. If “we’ve always done it this way” – it can be changed for the better.
  3. What are five things we do today that no longer need to be done?
  4. What are five things we do today that remain important and can be improved?
  5. What are the jobs skills that remain important today? How do we improve these?
  6. What are skills no longer needed in the world of today? How do we let them go?
  7. Do we have the technology (systems and social media) needed for today?
  8. What and how can we maximize our results from this technology?
  9. Does our “client experience” differentiate us, or are we “the same old same old?”
  10. Are we capturing the data available and converting this to actionable knowledge?
  11. Where must we invest our time and energy?
  12. What must we leave behind?

Please remember – the Today Team is about updating (remodeling) the organization you have. Its role is small steps – process improvement.

Think outside of the box. Remember the words of Einstein – insanity is “continuing to do what you’ve always done and expecting a different result.” The world has changed more in the past 10 years than the previous 50, yet most agencies continue to do what they’ve always done. Don’t be crazy. Discover and do what needs to be done today to prepare for tomorrow.

The Tomorrow Team is about designing a blueprint and facilitating the building of the organization and culture you’ll need for the future. The team’s role is “giant leaps” – innovation. You are moving from the mechanical processes of yesterday to a new “living” system for tomorrow. Be bold. Don’t be afraid to fall – just do it, and learn from the experience.

For the Tomorrow Team, some directions and innovations to consider (there are more):

  1. Scan the horizon of the world and technology. Look outside your comfort zone.
  2. Determine if “place” will matter — where you, your employees and clients are.
  3. Determine if “time” will matter? Is “Working 9 – 5” only right for Dolly Parton?
  4. Determine the role of cultures and generations for buyers and those who influence decisions.
  5. What are the talents needed? Prioritize communication, technology, insurance, etc.
  6. What will be client needs? How can you deliver solutions profitably?
  7. Shift your focus from products sold in the past – to client needs in the future.
  8. What will be the demographics and psychographics of the populations served?
  9. What will be the industries/market niches in collapse/decline? Avoid them.
  10. What will be the industries/market niches in ascendancy? Focus on these.
  11. How do you manage in a “virtual” (no time, place and more non-verbal) world?
  12. What will be the role of big data? What will be your ability to use it effectively

The questions are offered as a starting point for discovery. You have many more questions to ask and answer. Yours is a world yet to be – not a world that is. Nonetheless, the better you ponder and plan, the better your head start on the future – the New World of 2020 – will be.

Learn from the great change architect Peter Drucker, who said, “The best way to predict the future is to create it.”

Look Up, Look Out, Think New!

“The stalking weasel has its nose to the ground. It never hears the descent of the hawk.       Until. . . ”  

-Andrew Vachss, author

Are you like the weasel? Are you so focused on what you’re doing that you don’t hear the hawk that will soon take you out of the marketplace?

You may very well be staring at your hawk as you read this article!

You see, one of the “hawks” in today’s world is technology — iPhones, iPads, other mobile devices, the Internet, social media, Siri, artificial intelligence, big data, 3-D printing, etc. These “hawks,” along with a global economy, shifting demographics and new power players, have made the world a very dangerous place for “weasels” like you and me.

From Mohan Nair’s book, Strategic Business Transformation, we learn that the following companies were all profitable in 2007 and by 2010 were dead:

American Home Mortgage
Bombay Company
Comp USA
Circuit City
Lehman Brothers
Levitz Furniture
Linens and Things
Sharper Image
Ziff Davis
Bearing Point
Charter Communications
KB Toys
Monaco Coach
R.H. Donnelley
Silicon Graphics
Hollywood Video

From this same source, we also learn that in yesterday’s world 80% of change was cyclical and 20% was structural or transformational. Tomorrow, the opposite will be true – 80% will be structural and only 20% incremental.

Time, place and pace have changed. Today we live in a 24/7/365 world without borders and with an expectation of instant gratification. We want what we want, and we want it now! Don’t believe me? Google it!

In the days of Ozzie and Harriet, big threes dictated to a mass market. The auto industry was defined by GM, Ford and Chrysler. Broadcast television was owned by CBS, NBC and ABC. The magazine industry was controlled by Time, Life and Look.

Fast forward two or three decades, and power has fragmented. Today, more than 40 automobile manufacturers sell hundreds of models of cars in the U.S. Visit any newsstand in your town or the equivalent on your computer, and you can find magazines specializing in everything from fly-fishing to quilting to cigars to Sudoku. You can view hundreds of broadcast, cable or other channels — and from any screen you own, not just from a TV.

We are no longer a mass market but rather are a series of niches being served by specialty manufacturers and distributers using mass customization to meet the demands of each niche. In fact, as we walk toward the horizon of unlimited possibilities that is tomorrow, we see where each of us is a niche of one whose needs will be served uniquely.

Big data allows manufacturers and distributors (and others) to know our wants and needs before we even express them. (Yes, we are sacrificing privacy for convenience.) Innovation is now at the point where 3-D printers can manufacture body parts for us.

The market has switched from selling to facilitating buying: A Wall Street Journal headline in July 2012 read, “The Customer as a God.”

The Baby Boomers (a.k.a. hippies) are finally on the “center stage” of life but are being told to exit stage left so Gen Xers can have their turn. Waiting behind the curtain with the Gen Xers are the Millennials and the Gen C — and they will not be as patient as the Gen Xers have been. The Millennials and Gen C are the new world. They don’t want to intern under us. They want to do their own thing. Now.

The boomers and their world of analog are about yesterday. Selling products, developing relationships, drinks at the City Club, civic and church groups, letters, prospecting and cold calls: These are not tomorrow’s world.

As Scott Walchek wrote on this site, “The Last Analog Generation — let’s call them LAGards — are departing, and in their wake a fascinating new world is emerging.”

Gen C — the newest generation and the only digital natives currently on the planet — were born into tomorrow and don’t give a damn how we did it back in the day. As a Booz & Co. study says, “They are Generation C (born after 1990) — connected, communicating, content-centric, computerized, community-oriented, always clicking. By 2020, they will make up 40% of the population in the U.S., Europe and the BRIC countries, and 10% of the rest of the world, and by then they will constitute the largest group of consumers worldwide.”

Their biggest impact is that as teenagers they are not learning from us (their parents and grandparents) how to be good consumers. They are teaching us: how to use the power of technology and social media to be great consumers. They are teaching us how to buy in a digital and nonverbal world.

As a result, every manufacturer, distributor and salesperson will be changed sooner rather than later and much more deeply than they would change if left to their own devices.

Today is/was a world driven by products and services and product and service sellers. Tomorrow is about being defined and driven by clients. Siri will know more about products and services (even those you offer) than you do. Product knowledge will not be as important as understanding a client — a finger on their pulse. Tomorrow, you must be an expert in your client and their industry. You must build intimacy with each client and affinity with his or her world. Within this focus and framework, they will choose to buy from you — you won’t sell to them.

Each of us is who, what and where we are today because of the way we think. If we want to change, survive, prosper and enjoy longevity, we must think new! We must innovate or evaporate.

Reimagining Insurance: More on AXA-Facebook

The reactions to the Strategy Meets Action blog “The Shot Heard Around the Industry: AXA and Facebook” have been enlightening. The blog has drawn polarized reactions … from some who envision the potential, and from others who only see today’s view of Facebook and insurance. The responses of this latter group explain a lot. They see the industry as risk-averse, steeped in tradition, lacking in creativity and slow to change, labels that inhibit an insurer’s ability to be imaginative. This time-worn outlook will need to change if insurers are to survive and thrive in this fast-changing environment.

Like it or not, the increasingly rapid pace of change is because of modern and major influencers: the customers' being in control; the new business models used by other industries and companies like Facebook, Google and Amazon; and next-gen and emerging technologies that are converging and challenging decades of business traditions and assumptions.

A new perspective is required that can inspire new directions for insurance.

Industries — including retail, books, travel, entertainment and pharmaceuticals — have found the very foundations of their long-held business and operational models challenged, necessitating innovation. Those that have not innovated … well, they are no longer the market leaders in their space, or maybe even no longer in existence. Just consider the iconic brands of Kodak, Blockbuster, Circuit City, Time magazine, Borders, the Boston Globe, CNN or JC Penney. Their inability or unwillingness to see and act has cost them greatly. Even companies that were recently considered innovative are challenged. Look at Yahoo, Blackberry and Nook.

Yet other companies are embracing innovation, new technologies and outside-in approaches. As noted by one response to our blog, automotive companies like Ford, BMW and GM focused on the “connected car.” Companies offering “shared car services” like Uber, Zipcar and Lyft are recognizing the importance of being customer-driven. And Facebook and Google keep expanding the realm of possibilities to grow and strengthen the customer relationships and experiences through acquisitions such as Facebook’s Instagram, Face and Oculus, or Google’s Nest, Titan Aerospace and Zagat, to name a few.

What separates those who innovate from those who don't? It’s the vision of leadership. Leaders who can innovate can define a future vision, create a culture of innovation, identify and understand the influencers of change and embrace an outside-in approach.

The insurance industry must learn and respond fast, because it is facing the same types of challenges that have reshaped other industries. The strategic partnership of AXA with Facebook is a game-changer, distinguishing their leadership and their willingness to take an outside-in approach. We are not likely to see the inner workings for competitive reasons, but AXA has taken a bold step toward becoming a next-gen insurer. By leveraging a company like Facebook with massive expertise in understanding the digital experience and the changing expectations of customers, AXA is being transformed to a digital insurer in terms of brand presence, customer experience and customer loyalty.

Being a digital insurer is so much more than just having a website, more than using channels like social media to sell or advertise and more than having a mobile app to report claims. A digital insurer is a powerful integration — of the website, mobile platforms, social media, mobile messaging, location services, crowdsourcing, business and customer applications, online video, content management, customer communications, sales enablement, branding and marketing – that creates a seamless, engaging customer experience. And the digital insurer is underpinned with sophisticated data and analytics that know, influence, anticipate and engage the customer in a way that creates a next-gen customer experience.

After all, in today’s world it really is all about customer experience and customer loyalty. AXA’s bold move in taking an outside-in approach — by partnering with a company that has been a leader in redefining the customer experience, redefining the digital experience, embracing new technologies, and using data and analytics — has created an opportunity for AXA to do different things that will position it as a leader in this new digital world.

The coming years hold the promise of unparalleled opportunity for insurers to increase their value to their customers. Those that remain tied to tradition and the past, choose to ignore the key influencers or wait too long to react will risk losing relevance. Those that are willing to take the bold steps forward will stand to gain the greatest rewards.

Yes, there are lots of details to be defined, piloted and implemented over the next few years in the AXA-Facebook partnership. And there will always be naysayers. But this bold move and others like it are ushering in the dawn of a new future that is full of possibilities. This is transformation and innovation. This is what will define winners and losers. And that is what is so exciting!