We have to shed legacy thinking in order to start thinking transformatively. Legacy thinking is not just about legacy systems; it is also about processes and people. (For a good definition of legacy thinking,
Legacy Thinking: “The business communities supported by Business Operations and IT are users’ and not co-creators’.”
This mind set came to be around the time when computers first entered the business world and the knowledge of how to deploy, operate, and maintain them exclusively rested with specialists. Back then, the department of computer specialists was an internal service bureau called Data Processing.
Today, almost everyone in the business world has access to information and technology. Most associates are not only technology literate but also have a strong knowledge of their business or functional area. They understand many of the technology-based solutions that the organization requires to be successful. Insurers are better served by collaborative and transformative thinking that takes this into account.
Transformational Thinking: “Representatives from the business communities — business operations, information technology, and other functional subject matter experts should be considered co-creators; equal partners with equal accountability, especially when taking on large transformation programs.” This is a step in the right direction toward collaboration that will yield necessary results when it comes to departmental 'buy-in.'
The next area of legacy thinking is also related to collaboration.
Legacy Thinking: “People and their departments will get connected on their own, without creating processes and tools to encourage interaction and collaboration.”
Unfortunately, this is often untrue. Insurers need to encourage cross-functional working groups and projects, utilize processes that cross department boundaries and also geographical boundaries; leverage technology to ensure information and data is kept flowing among all parties concerned.
Additionally, they need to leverage new technologies that ensure connectivity; all in support of a transformative concept called the “digital enterprise.” Transformational thinking accepts that connections are vital and must be fostered.
Years ago, I was working for a major multinational electronics manufacturing firm that had a business unit in Brazil. Cross-functional collaboration was part of the culture created by the local general manager and his team. Throughout the year business challenges were communicated to all areas and problem solving via multidisciplinary teams was encouraged. Customer service issues, technology problems, even shipping backlogs were posted on a large blackboard near the cafeteria and the employees formed multi-disciplinary teams to solve them. The business unit has won the most internal innovation and quality awards over many years.
In contrast, I visited three major locations for a large global reinsurer in 2002 and participated in requirements definition’ meetings. Although one was in North America, one in Germany, and the other in London these meetings felt very similar to each other. There was a lack of collaborative energy between departments. Meetings felt like depositions with IT personnel sitting on one side of the table and the “users” on the other. Building on my experience in Brazil, I convinced the business unit heads to purchase foosball tables and place them in the larger meeting rooms. Three weeks after they were installed, employees were meeting regardless of the department they belonged to. A month later, the requirements definition’ meetings turned into collaboration workshops because the employees gathered to work on projects and have fun together.
The technologies available today provide more opportunities for people to collaborate and innovate. Contests can be launched across functional units and geographies to encourage co-creation, teamwork, and innovation. Creative thinking is transformational.
Legacy Thinking: “There are internal clients and external clients.”
Transformative thinkers and realists have a simple, yet more accurate belief system. Within an insurance organization there is an exchange of services as one progresses across the insurance value chain. There are service providers and service recipients. Each department and employee is a service provider and a service recipient. The 'Clients' are those that pay the premiums in order to benefit from insurance products and services.
Why is this distinction important? It is important because it places the focus on the correct group. More and more insurers have come to realize that to truly transform their business they need to focus more on clients. Client centricity, improving customer experience, providing products and services that are relevant and differentiated are essential to growing the business and gaining dominance in the market place.
Even today, most of the Business Operations and IT budgets reflect investments for the benefit of internal service recipients. A relatively smaller portion is allocated to improving experiences for real clients, creating client-facing technologies, and measuring and acting on client input. The legacy thinking that there are 'internal clients' restricts funds, human resources, and innovation from reaching the real clients. A collaborative, transformative, and service-oriented viewpoint gives everyone in the organization the same goal — work together to serve our clients.
Years ago a major insurer asked me to assist them to create a more customer-centric culture. I asked the CEO to allow me to walk the floors of their corporate headquarters, two of their large offices, and two of their smaller branches. I provided my top three findings:
1) His direct reports did not reflect real-time information of customers — satisfaction or dissatisfaction.
2) When policyholders were unhappy with the service they received, there was no mechanism to quickly escalate, let alone remedy situations.
3) The functional support units (with the exception of claims and customer service) consisted of managers and employees whose training and development excluded customer-facing activities and interactions.
The CEO’s 'take-charge' approach led to the creation of a daily report from customer-facing departments on unhappy customers. Senior executives, department heads, and managers were assigned to call the customers directly to remedy the situation. A few weeks after the initial reports, the process was automated and managers and employees were able to access a customer satisfaction and problem resolution system. Job rotation was introduced, where personnel from support functions served in the client-facing roles for a few weeks every year. Customer service was revolutionized through improved customer listening and everyone began to understand their personal role in keeping customers satisfied.
With today’s technology, insurers can collaborate more with their clients. Client self-service portals can be enhanced to gather customer feedback and obtain ideas for new products and services. Innovation workshops can be designed to include customer participation. Technology-enabled customer-insurer collaboration and co-creation can be a very powerful, game-changing strategy for insurers. Technology, not just relationship building, can be a transformative tool in assisting in team collaboration and co-creation as well.
In the next few posts, we will be discussing transformative thinking in every area of the insurance value chain and I will be making suggestions on how technology can help in your organization’s transformation.
About the Author
Sam Medina is a global business transformation executive at TCS, who specializes in advising
