Based on the central aim of remaining globally competitive and attractive for insurance business, the London Market modernisation agenda targets improved efficiencies and reduced costs.
Fundamental elements of the modernisation effort include digitising processes, end-to-end data flows and systems integration between an insurer’s current IT assets and innovative technology solutions available in the market. These solutions mostly focus on automation, data management, and data governance.
Within the broad technology modernisation effort, other pivotal elements are around change management and talent management – such as ensuring that the market attracts a younger workforce. In this blog, I’m going to focus on some of the elements required in a successful change management programme, which is at the very heart of what’s required for the London Market modernisation agenda to succeed.
The CSFI’s Insurance Banana Skins 2019 survey revealed technology change as the number one risk, followed by cyber risk and change management in the third position. The report highlights the concern around the insurance industry’s ability to execute on its digital transformation agenda, including its focus on cost reduction, delivering new products and solutions, new competition and emerging risks such as cyber which are rapidly altering the insurance sector.
In the race to modernise, each insurer will have a different journey and will be starting at different points, underpinning specific strategic ambitions and goals. There is no one-size fits all approach to updating and modernising the London Market.
The CSFI’s survey highlighted that the majority of insurers are burdened by legacy practices and IT infrastructures that are inadequate to deal with the modernisation efforts that need to take place.
The CSFI noted that a recurring theme in the survey’s responses was around the industry’s apathy to change. Comments included “too big, too slow, too much internal politics”, and “passive resistance to change is the norm in the insurance industry.”
The risks of not changing have been well documented and throwing money at the problem is not the solution, nor is ripping and replacing swathes of IT assets the answer. Often, a solution can be found in making existing legacy platforms more efficient by incorporating new technologies that work with current IT assets.
But no matter how cutting-edge your new technology is or how many young people you attract to your organisation, any modernisation efforts will fail without a solid change management plan.
Change in the London market can be difficult. Change is not about replacing one IT system with another, reshuffling jobs or even restructuring the floor plan – it’s about transforming and managing people’s expectations and behaviours and guiding employees every step of the way.
Some people fear change; others relish it. Some are motivated by moving away from an uncomfortable situation and others by moving towards something more desirable. Any successful change management programme needs to address a broad and mixed audience. Sure, you won’t be able to please everyone, and you shouldn’t, but you need a solid plan that validates reasons for change.
Although I’m not a change management expert, I’ve gone through some significant change management programmes throughout my career and have been involved in helping create some of them. While not an exhaustive list, below are some guidelines that form the basis of a successful change management programme.
Analyse and audit
Upon realising that your company needs to change, a thorough audit of processes and practices needs to take place. Analyse every system, process, project, and human interaction and earmark potential areas for improvement.
Doing this allows you to build a framework on where changes need to be made and to highlight the areas that are holding back your company. Having a robust change management framework is the foundation for success and crucial when it comes time to ‘sell’ your plan to employees.
Habits die hard and successful change management largely rests on people shifting their habits, behaviours and attitudes. You will need to back-up your proposed adjustments with evidence on why things need to change and share this with all stakeholders.
Clear vision and game-plan and keep it simple
Get your vision, plan and goals down in writing and ensure that you include how you plan to measure and establish success. Define your journey and final destination and make it clear how you expect everyone to engage and support the changes.
Keeping it simple is key. Make your language easy so everyone can understand what’s happening and be prepared for pushback and for hearing ‘but that’s how we’ve always done things around here.’
What’s in it for me?
Make a list of all the people who will be affected by the changes – customers, employees, partners and suppliers. Understand what the triggers are for each group, what is going to make them care about the changes, how the changes will affect their day-to-day interactions and potential barriers to change.
Alongside this, you will need to detail exactly the advantages and benefits of the changes for them and your organisation. Attract people to the changes and new initiatives by clearly showing the overall aim of the business and how their actions impact this and why processes need to change.
Remind me again, why is this happening?
Successful change management programmes involve ongoing communication. Don’t think that sending one email company-wide to employees or anyone else on your list outlining the changes and why this is happening will be enough.
There will be a lot of uncertainty amongst all stakeholders, and effective benefits management involves keeping everyone informed on a regular basis. Ensure that each time you communicate with your stakeholders that you remind them of the benefits to them and the company, and also remember to include in your communications how you plan to measure and monitor your benefits and detail how the company is progressing.
Maintaining transparency and honesty about the entire change management initiative is imperative to ensure that everyone is kept abreast of the progress being made. It’s also an effective way to detail any modifications to your initiative and how this affects stakeholders. It’s inevitable that somewhere along the way your plan will be modified, so be clear on how these changes will affect everyone, what habits and practices will need to change and the benefits to them.
Sometimes showing the future is more important than just writing about it. A lot of the change management communication will be via emails from the top but consider having someone else from other ranks explain the changes to everyone else.
Seek champions and sponsors who are enthusiastic about the changes and have them explain it. Consider getting an employee to talk about how the changes will benefit them – this can either be done during a company-wide meeting, arranging smaller face-to-face presentations with teams, a blog, or a video.
Some changes will cause major disruptions. For example, digitisation is a principal change happening in the insurance market. Digitising processes can not only cause disruptions for the IT teams to manage, but it may trigger anxiety amongst employees who are facing having to do things in a completely different way, which is unfamiliar to them.
Consider using scenario planning (“what ifs”) that illustrate the dangers of not adapting and changing. Showcase similar examples of change in similar business models (but not necessarily from the same industry) to learn from and apply to your organisation.
Visualising change and building a prototype are effective tools to demonstrate your concept and show benefits so people have the chance to see it, feel it, assess it and understand it for themselves. The London TOM programme did this effectively by allowing people to get their hands on it and see what a solution would look like.
Walk the talk
No matter how many times you keep everyone informed on your company’s change management plan, it will only succeed if employees see their executives and top management walking the talk.
Change has to start at the top, starting from the C-suite down. All senior management need to be aware of their role and the expectations of them. They, more than anyone else, need to be the early adopters of any change.
Make sure that management and the C-suite are aware that they need to support the new initiatives through their behaviour. Show them how they can demonstrate to customers, partner and employees how they are deploying the changes and altering their behaviours.
Twist and shout
Demonstrate successes along the way no matter how small. Don’t wait for the change management programme to be complete before you show success. People will want to see evidence that the changes being made are working, so ensure that you maintain a steady cadence of communicating wins and successes.
Keep an open to mind changing your changes
You may find along the way that you will have to alter any initiatives you set out in your original plan. This could be for a variety of reasons and there is nothing wrong with having to deviate from your intended path or even giving up on one or more of your intended changes.
This shows that your company is flexible and not rigid in its approach. Change can come from many avenues, such as overwhelming feedback and pushback from stakeholders on a proposed amendment, a piece of regulation coming out that will affect your plan, an IT system not delivering etc. Just ensure that any adjustments you make to your plan fit in with your original framework.
Your stakeholders will have plenty to say about your changes. Make sure you provide various channels to allow everyone affected by the changes to have their say either anonymously or in forums.
Demonstrate that you are taking all feedback seriously, and if you see a common theme or thread, act on it.
Revise and evaluate, and repeat
Revise and evaluate all proposed initiatives to ensure that the benefits initially intended are still relevant and if so, that they the changes are on track. Don’t hesitate to modify your original plan, revert to my earlier point above. It shows that you are continually monitoring your plans, taking on feedback and looking for ways to improve and secure greater benefits for all.
Just be transparent with all stakeholders on your evaluations and where the plan is in terms of progress.
As the saying goes, “change is constant,” and if the London Market is to thrive it must embrace change as laid out in the TOM initiative and six new ideas outlined in The Future at Lloyd’s proposal.
As can be seen from collective experience, a big and important part of successful change management relates to people – rather than doing it because they feel they have to, they need to care about the change, buy into it and embrace it.