DevOpsGroup Blog Transformation lessons insurance can learn from banking

Transformation lessons insurance can learn from banking

Written by Mark Akerman

Mark is a versatile technology, digital and business executive leader with experience across many product lines and companies particularly in the financial services sector.

He’s forged a career around harnessing technology for maximum business impact and recently has driven great improvements through the combination of cloud, DevOps and scaled Agile working.

He has a genuine passion for the possibilities that are opened up by technology and for making customers’ lives simpler, always with an eye on the ethics of using data and tech responsibly.

See Mark’s full profile here.

Technology leaders from any business sector will tell you that scaling Agile ways of working across an organisation is a sure-fire way to cause friction. De-escalating tension and removing barriers to change is essential to transform and achieve more in the digital economy. But in a large enterprise, the CIO or CTO rarely has the authority to ensure unwilling departments embrace the change agenda.

This is the situation facing many insurance organisations at present: change is essential but gaining the momentum to transform at scale is a real challenge.   

Stalemate: a collective wall of ‘no’

So, who can influence the parts of the business raising barriers and stalling progress? The COO or CEO could probably help. But they often find themselves caught between a rock and a hard place. They end up umpiring a game of (sometimes misconceived) fact tennis where the technical team is overwhelmed by a barrage of serves from colleagues in governance, service management, information security and data management.

Collective fear surrounding the potential risks attached to Agile, cloud-based and DevOps ways of working creates an echo chamber of resistance. People refuse to collaborate, and it becomes impossible to find a way forward.  

This is where an impartial team with a progressive outlook can make all the difference.

In a former role leading a banking sector transformation, I was fortunate to have the support of a chairman and non-executive directors who were fully behind the initiative. They brought clarity, perspective and tenacity to the boardroom, and their attitude infiltrated the entire organisation. I learned that the people in these roles can be a powerful agent for change, especially when they buy into the four critical factors of an adaptive, agile organisation.

Four critical factors for transformation success

Transformation is a complex, lengthy process and it’s easy to lose sight of the business rationale behind it. This is a good reason to have non-execs on board. When things get complicated and tensions rise, they can see beyond the immediate challenge and encourage people to work through problems diplomatically.

1. Build empowered teams (autonomous mini businesses)

Setting out the vision, showing that senior leaders are behind it and helping teams understand how they can contribute to it is a key element of success. Position change as a means to achieve a specific business outcome, such as differentiation or competitive advantage. This makes it more tangible and gives people a goal to aspire to. 

Empowering people to take responsibility and play an active part in the process, rather than dictating what they need to do, fosters acceptance where there might have been resistance. Whether your people work in teams, squads, hubs or tribes, they should be allowed to operate as a mini business. This means they get to design, build, deploy, market and manage their own product to ensure it meets evolving customer needs. When they’re in charge, it energises them to embrace and even instigate change instead of working against it. 

2. Reimagine the end-to-end value stream (from the customer perspective)

Transformation will never go deep enough if the focus is simply on digitising existing processes. Rather than using technology to do the things we’ve always done, we need to take a step back and think about how it enables us to improve how things are done.

For insurers, reimagining the claims procedure is an essential part of this. Historically, power sits with the insurance company and the process goes along the lines of ‘tell us what happened, we’ll decide whether you receive a pay-out’. But this takes a long time, and the customer’s problems extend well beyond who pays for the repairs. If someone’s had a prang on the school run, how do they get the kids to school, will they be able to get to work, where’s the nearest garage? In the digital age, consumers expect immediate assistance with these things, and if incumbent insurers don’t step-up, new market entrants will.

3. Believe in the transformational power of technology (the ‘art of the possible’ and how it can make things better)

Technology has changed immensely in the past decade. To fully unlock its potential, you must overhaul legacy systems and processes – if you take the baggage with you, it will slow you down.

One barrier I faced in my previous banking role was moving customer data to the cloud. With GDPR looming this was a major fear factor for several departments, and they simply didn’t want it to happen. They made a strong and persuasive case, which was hard for the COO to ignore. However, the non-execs understood the rationale for the transition, and that it could ultimately bring multiple benefits for the business and customers, enhancing rather than compromising security. Their influence ensured we found an acceptable way to move the data and progress, rather than finding reasons not to proceed.

Automation of the ITIL governance framework is another concept that can meet resistance. However, when department heads have the opportunity to learn how automation can enhance the process – making it more effective as well as more efficient – fears can be allayed.   

Most of the time, new ways are superior to the old on all counts when they’re properly implemented. But you need to be cognisant of risks, and find ways to mitigate them.

4. Nurture a culture of experimentation (create space for teams to make mistakes and learn from them) 

Enterprise transformation is too big a job for one person or one team to handle. So, for a CTO spearheading change, the servant leadership philosophy is key.

Once you’ve built your empowered mini businesses, they need freedom to take risks as they develop new ideas, without jeopardising the wider business. There are three central components to this:

  • Start small
  • Experiment / learn by doing
  • Repeat / iterate.

A transformation leader should devolve power, enabling people to perform to the best of their own abilities. In my banking sector role, I didn’t make a single business-critical decision. Instead I facilitated discussions between relevant teams when issues arose, and trusted them to reach a consensus that would work. Over time, this creates a positive and progressive environment, where learnings are harnessed and improvements escalate.

A positive force for change

The scale and complexity of enterprise transformation is immense, and there are so many ways that it can grind to a halt when business as usual needs to be maintained. But insurance is not immune to disruption, and incumbents must adapt to survive and thrive in the digital economy.

It’s important to look at the bigger picture, then break things down into manageable chunks. If you try to tackle everything in one swoop, short-term problems can quickly hinder long-term goals.

My experience in the banking sector indicates that when a progressive chair and non-execs back the change agenda it accelerates transformation. They have the power and influence to encourage the executive team to push through the inevitable challenges. We all know that fortune favours the brave, but sometimes you need help to galvanise the troops. 

Will the digital transformation in insurance happen fast enough? Read our whitepaper to find out more.


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