Insuranceciooutlook

Reinvention is a Must not a Desire

Marta Magnuszewska, Senior Director (VP) of Claims Analytics, Markel

Marta Magnuszewska, Senior Director (VP) of Claims Analytics, Markel

I have worked for companies that went through drastic changes like total reinvention and companies that inspired minimal changes, like adopting an innovative tool and a social media page. Is there a suitable amount of change? Why is there such a high urgency to reinvent for the existing companies? How should companies evaluate their desire to change and to keep up with modern innovations and sophisticated customers?

In the last few years, there has been a significant focus on the usage of data and innovative technology, reinventing and applying the insights derived from data; this period has been called by many as the 3rd Industrial Revolution. But data and innovative technology are just a component of this revolution. The massive distinction in differentiating startups from existing companies is reflected in their new power operating model. In the new power, startups are operating like "current." Through the communication model, their operation is made by many and is open for two-way feedback and communication. These are peer-driven. Operating with "open" boundaries enables these companies to provide customers with what they need, at the time they need it, and how they need it. These companies can almost immediately change their offerings based on customer feedback and engagement while leveraging the creative minds of many vs. just relying on the executive team's expertise. In addition, the new power operating model puts a new meaning around collaboration, transparency, affiliation, and governance, creating a fundamental change in how people see themselves in relation to institutions, authority, and each other (Heimans and Timms, 2014).

Established companies adopting this new operating model are going through a complete reinvention. They create internal operational change and external re-branding initiatives. These companies embrace new technology to innovate almost everything they do, from upskilling and reskilling of their employees to responding to customer demands in real-time, influencing the public to think differently about the industry, and producing products and services. These companies successfully utilize social media content. To successfully transform the operational model change management process becomes a part of daily operations vs. a planned event for such companies.

The successful transformation advances through three distinct phases, which build upon each other. These phases are: mobilization, movement, and sustain (Kotter, 1995). For change to start, every organization and its leadership team must mobilize their direct reports and establish a sense of urgency to innovate existing processes. Next, these leaders must create a comprehensive strategy and vision by defining objectives, corporate identity, and desired changes to products or services. Finally, executive leadership must create a strategic plan that links the past, present, and future to develop a new strategic direction for the company.

Crafting a strategic narrative involves reimagining future possibilities while rethinking the company's past and reevaluating present concerns (Kaplan and Orlikowski, 2014).

The movement phase puts everything in motion. Effective communication plans such as town hall meetings, private interviews, internal intranet page posts, and leadership blogs will create a movement to inform as many employees as possible about the new vision and reinvention. Leaders have to effectively empower others to execute different vision components while clearly defining the business values to expedite such movement.

"For change to start, every organization and its leadership team must mobilize their direct reports and establish a sense of urgency to innovate existing processes"

"It does not make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do."

-Steve Jobs

Externally, corporate relations engage with and empower brand ambassadors to use social media in an asymmetric model to promote the reinvention plan and the new strategy to meet customers' demands while focusing on modern innovations. (Dhanesh, 2016). Finally comes sustainability, where leaders connect organizational successes with the strategy while tracking and sharing progress metrics with short-term wins. (White, 2019)

How should companies evaluate their desire to change? The answer is relatively simple, and each executive should ask themselves this question: where will my company be when I wake up on January 1st of 2025? Companies that don't think about change management as a daily process and the new power operating model as the recipe for the future will eventually fall behind so far that catching up will not be possible, and dominating the market will become an unattainable dream. For example, I have been following Divvy Bikes, an organization within Chicago, providing Chicago residents and tourists with alternative means of transportation. Chicago residents use Divvy Bikes to travel to and from work and train stations.

But with COVID-19 and the pivot to work from home, Divvy experienced a profound drop in usage. As a result, Divvy changed its strategy and almost doubled the number of bike stations in the residential neighborhoods, promoting the recreational use of Divvy Bikes. As a result, the number of rides doubled. This was possible because Divvy's advanced strategy of combining people, processes, and technology, adopting data framework and culture, positioned Divvy to monitor market opportunities proactively. This strategy distinguishes companies operating with new power operating model from those operating with an old power. As a result, Divvy made operational changes in real-time, addressing a trend impacting their profit and growth.

If you are reading this article, and your company, your executive team or your direct leadership has no strategy which combines the past, with the current and the future and fully supports organizational reinvention, innovation, and shared leadership model it might be time for new career or new leadership. To survive among the startups with new power operating model, existing companies with a mature tenure need to have a strategic plan addressing reinvention and transformation, combined with investment dollars allocated to innovative technology and a fully outlined education and development plan for their employees. In addition, they need to use social media to enhance their brand identity and customer communication. The next phase for companies already operating in the new power model is using Augment and Virtual Reality applications and devices for even more robust data connection. The market with new and innovative technology that streamlines processes and enables fast and insightful decisions is growing tremendously. The line has recently changed from follow the money to follow the data. (Pesce, 2018).

For leaders like myself, who enjoy innovation, challenge, and the constant learning as an operating norm for our teams and within our careers, creating new power operating model is the way of the future for institutions to survive, while we as leaders are embracing change management as a process, not as an isolated event.

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