Summer days are drifting away, and autumn is upon us. Along
with it, the annual planning and budgeting process is well un-derway. There will be discussions around vision, three- to five-year strategies, and plans for funding for 2015. There will be formal processes followed to keep it fair and equitable across the
organization. And there will be ranking, prioritizing, debates,
negotiated budget allocations, and horse trading going on.
At the end of the process, little will change for many insurers. Why? Because the focus, priorities, and funding will primarily go to “keeping the lights on,” agreeing to a few enhancements to existing products and systems, and maybe one or two
new initiatives. But this process just repackages what insurers
have always done, maintains the status quo with a few tweaks
here and there, and enables little progress toward the vision.
This traditional process worked for yesterday’s business and
possibly even today’s, but to position for tomorrow’s vision?
That is doubtful because it does not create the inspiration,
coherence, energy, and excitement about the strategies, plans,
or funding that propels the organization forward and brings the
company’s vision to life. It does place the organization at a competitive disadvantage, shackling the ability to quickly move forward in a shifting market landscape. And, it does not effectively
acclimate to the new levers of change that are more quick and
intense than ever experienced by the industry. What will be the
results? Slow, declining market relevance and competitiveness.
Sound harsh? Yes, but unfortunately, that’s the reality. To
create a new reality, insurers must adapt and change. We must
apply the three Rs of planning for the future by first reimagining
the future in defining the vision and strategy, redefining the
planning process to move beyond a primarily operational focus,
and by refocusing funding that keeps the business viable while
aggressively building the future.
Reimagine the Future
Reimagining insurance through a vision and strategy as a
Next-Gen Insurer has never been more important. In this
“new normal” of rapid change brought about by the the digital
revolution, the swift adoption of emerging technologies, advancing innovation within and outside the industry, changing
and converging industry boundaries, new competitors, mergers
and acquisitions, and shifting customer loyalty are practically
commanding insurers to reimagine their future.
Vision and strategy require continual assessments and
adjustments based on the force of change that is influencing the
industry. As part of their reimagination efforts, insurers should
consider the following to help reshape vision and strategy:
K How will your vision and strategies enable you to compete
and operate in the new digital economy that necessitates new
customer engagement and loyalty models?
K What changes and innovations are happening outside the
insurance industry that will impact, reshape, or influence
the insurance industry?
K Are your vision, strategies, and plans positioning you to win
… or just not to lose?
K What is the changing landscape of competition, both from
within and outside the industry?
K Are you considering or exploring new business models that
embrace new operational partners, capabilities, and technology?
These are a few of the topics and questions that must be
tracked, assessed, and discussed throughout the year to ensure
plans and funding remain relevant amid this rapid change.
Redefine the Planning Approach
Redefine the planning approach to be broader than a primarily
operational approach and maintain focus. Keeping the existing business viable and efficient is important, but equally, if
not more important, is building the future business to enable
growth and success in the new and changing world.
This will take a team of people with different roles, talents,
and backgrounds. The team can be centralized, decentralized,
or a combination, whichever best works within the organization. These individuals must think outside the box, be creative
and strategic, realize what is happening outside insurance, and
understand the potential for emerging technologies.
The team can identify and develop strategic and transformational plans that are important for the company (as opposed to
departmental needs), prioritizing the strategic and competitive
value for reshaping the company’s future. In redefining the
process, insurers and their teams should consider the following
areas to identify and shape strategic and transformational plans:
K Are you committing resources, via a team with funding, to
track the fast-paced changes happening within and outside the
industry in order to frame the impact and potential response?
K Do you have access to and participate in collaboration and
crowdsourcing ecosystems to continually bring insights, in-
formation, and knowledge to reshape strategies and plans?
K Have you considered how customer loyalty and competitive
Back to School
The three Rs of planning for the future: reimagine, redefine, and refocus.