Other parts of this series:
- It’s time insurers bust the myths about change management
- Insurers are overlooking key change drivers as they ready themselves for digital disruption
- Disrupt or be disrupted: It’s time for insurers to explore another route
- Three change management moves that will help insurers come out on top in the digital economy
Top martial artists have learned the best way to respond to a powerful force bearing down on them. They don’t stand in the way and get knocked over. Nor do they try to out-muscle their foe. Instead, they channel the on-coming force to their advantage.
Insurers, and other organizations wrestling with the onslaught of digital disruption, should take this lesson to heart. They don’t have to submit to aggressive competitors eager to disrupt their traditional markets. And they don’t have to beef up their businesses in an all-or-nothing attempt to become powerful digital disruptors. Rather, they can concentrate on benefiting from digital disruption.
Our research, as I mentioned in my previous blog post, shows there are four market activities that will endure in the digital economy – inventing, producing, designing and assembling. By changing their organizations so they focus on one or more of these critical activities, insurers can establish themselves as indispensable cogs in future digital ecosystems.
We’ve studied the change management practices of many organizations that have successfully positioned themselves to thrive on digital disruption. Most of them include these three important moves.
- Identify key capabilities that will remain relevant in the digital economy. Focus on roles and proficiencies that will appeal to a broad range of potential partners. Don’t review the “competitive landscape”. Instead, look at the “partnering landscape” and search within and beyond traditional industry boundaries to identify prospective allies.
- Adapt the organization’s business models to capitalize on its core strengths and capabilities. Position the company as an essential partner of choice within a broad network of digital alliances. This may require some parts of the business, which are too industry-specific, to be jettisoned.
- Adopt digital solutions to foster real-time collaboration with business partners, customers and, if necessary, competitors. This requires a close re-examination of current business systems and processes, as well as the organization’s culture, to ensure that external collaboration is simple, effective and routine.
Insurers don’t have to undertake this transformation on their own. Business partners, as well as technology providers, will be critical to their future success as digital enablers operating across various ecosystems. They can also be important allies in the process of transformation.
Close co-operation with ecosystem partners as well as technology providers, including agile insurtech firms, often accelerates business transformation. It can also deliver greater innovation. Furthermore, external change capabilities, such as specialist skills and productivity tools, can help increase the pace of transformation as well as curb costs.
Transformation partnerships can provide insurers with rapid access to critical expertise, enable them to better accommodate fluctuating demand for skills and resources, and instill an intensity of focus that is often difficult to sustain when working only with internal change management teams.
Contending with digital disruption is not easy. But by improving their change fitness, working closely with business and technology partners, and focusing on their core strengths, insurers will be able to position themselves to triumph in the contest ahead.
For further information about managing change in the digital economy, have a look at these reports written by my colleagues Warren Parry, Randy Wandmacher, Paul Nunes and Joshua Bellin. I think you’ll find them very helpful.