Big ideas are good, but executing them is better.
Our industry has never seen so much call for change. Between the onslaught of emerging technologies, to insurtech startups weaving in and out of the insurance and vendor space, to urgent economic pressures that demand improvements on everything from customer relationships to the bottom line, the demands create constant pressure on insurers.
So, too, does the resistance to the changes necessary for survival in this disruptive environment. This is true for large enterprises and small, because, believe it or not, both large and small insurers are impacted in similar ways when it comes to executing enterprise-wide change, especially related to technology.
There are many reasons for this resistance. Our industry is generally known as being risk averse and conservative, and until recently, has not had to embrace change the way other industries (such as banking) has. Plus, employees often equate change to negative, irrational fear: fear of the unknown, fear of not being able to keep up with emerging technologies and new ways of working, and fear of job loss.
Resistance aside, there are other reasons why change is difficult. For some reason, notes Vijay Govindarajan, Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business and Marvin Bower Fellow at Harvard Business School, most companies put more emphasis on generating Big Ideas than on executing them—so ideas on emerging technologies, breakthrough products, services, and process improvements remain just that–ideas.
“That’s because “ideating” is energizing and glamorous. By contrast, execution seems like humdrum, behind-the-scenes dirty work. But without execution, Big Ideas go nowhere,” he says.
In his notable (albeit dated) book, “The Other Side of Innovation: Solving the Execution Challenge,” Govindarajan describes three areas that hold companies back.
- The physical trap: The company’s large investments in old legacy systems prevent the pursuit of fresher, more relevant technology
- The psychological trap: The company’s leaders are preoccupied with what made them successful and don’t notice when something new displaces it.
- The strategic trap: The company concentrates on today’s marketplace and fails to anticipate the future.
While we have witnessed famous large companies such as Kodak and Blockbuster fell prey to Trap #2, we know there are also many insurers—large and small–that are in the middle of learning these lessons first-hand. It doesn’t need to be this way.
In fact, getting employees, business partners and all stakeholders on board with your vision and its accompanying change gives everyone a chance to celebrate your successes with you.
This is especially true for small- to medium-sized insurers. For example, consider self-insured groups such as Texas Political Subdivisions Joint Self-Insurance Fund (TPS), which has modeled how to successfully embrace change in order to execute on a vision. The not-for-profit provider of a workers’ comp and property & casualty coverage to a host of municipal, county and other government entities, TPS had a big idea: to improve the insurer’s overall business functioning, both within the insurers’ walls and with the insurer’s distribution network.
That meant upgrading its core systems and moving to a cloud-based software solution in order to facilitate transparent, reliable processing and real-time communications with all stakeholders (owner/members, third-parties, claimants, etc.). It also meant getting employees involved in order to leverage the new system’s ability to automate the collection of information as well as efficiently create quotes, endorsements, cancellations, audits and renewals.
Accountable to its members and committed to continuing to prove the highest quality insurance services possible today and in the future, companies like TPS can celebrate the success that comes with having a collective vision, communicating and sharing the benefits of improved processing, teaming with expert technology companies, and embracing change in a positive way.