"Transformation is one of the most overused terms in business. But there are companies out there truly undergoing transformations that are creating a sense of urgency, resiliency and momentum to deliver real and sustainable results."
Harry Robinson, senior partner, McKinsey & Company
The lessons from this article cover four key success factors which we have applied to insurers
- Think Big
- Move fast
- Share your Vision
- Stretch Aspirations
The magnitude of ambition needs to be a huge step if it is to carry the enterprise forward. Previous McKinsey research states that only the top quintile of insurers will make an economic return on capital employed. This supports the case in this article that the timid will not achieve transformation success.
McKinsey states that 40% of success comes from growth initiatives as compared with defensive cost reducing, automation and slash and burn tactics.
We have found this to be the case with insurers. It is no good just transforming motor claims and leaving home claims in the slow lane. Nor Pet, Travel, Commercial and the whole portfolio. All or nothing if you are to aim at a ten times difference of greater.
Your technology partner should not, of course, hinder this by charging extra each time you add another product, business unit or country operation to the mix.
Speed is your friend if you are to achieve first mover or fast follower advantage. Technology is often a barrier to this as the transformation projects are added to the never ending list that IT must deliver. Anything beyond No. 20 often never sees the light of transformation day!
Luckily for central IT and line of business leaders No Code platforms are your speed friend. No Code by definition does not need coders. Business and systems analysts can be trained in days to innovate, iterate, test and publish transformation workflows and processes fast.
For the first transformation project the technology vendor will do the majority of the work and then the business can be in control transforming in plain English (or French, Spanish, Arabic etc) from their workstations.
The other key advantage of No Code is that you so not create legacy code that needs a major upgrade every three years or so at enormous cost in time and money. Everyone is on the same current version of the software/platform at no extra cost.
Share your Vision
Engage everyone in the enterprise especially the customer facing teams. They know your customer best and this intimacy can be augmented by ideation sessions bringing in customers and supply chain partners.
The CEO should create conviction in employees to drive change and it helps to create a "Transformation Story" picturing the end-game. Why we are doing this rather than how and what.
Too many transformation projects have limited goals. That may have sufficed in 2019 but the pandemic changed all that. Customers of all ages and profiles rely on the very best online services to manage whether in lockdown of freer moments.
They now demand the same of insurers.
It used to be said that innovation and transformation should deliver a ten tomes difference. Well why not 15 or twenty times. The more all embracing the vision, goals and strategy the more likely the magnitude of change and customer satisfaction. Not to mention your own employees and business partners.
A final word: McKinsey research finds that 70% of transformations fail and propose that the 30% that succeed tend to be those with bold goals.
These are extraordinary times, and inevitably they have required some companies to lean into these challenges by slashing costs, reducing headcount and halting investments to conserve cash. But to thrive in the Next Normal, companies need to make more fundamental changes. That’s because if business models and mindsets don’t shift, those costs will just creep back. True transformation—the kind that alters the way a business operates on a cellular level—is what’s needed in today’s uncertain climate. It’s the only path to elevating financial performance, building capabilities and changing culture in ways that will not only get companies through this global health crisis but sustain them in the years ahead.