Save your intellectual capital, recreate your culture, redirect your producers’ thinking and maybe—just maybe—you will save your health insurance business. 

FAST FOCUS

  • An effective organization knows that what worked well in the past may not work so well in the future.
  • Which path the insurance industry chooses regarding healthcare reform will have ramifications for millions of people and, of course, for the industry itself.
  • There’s nothing wrong with organizations having institutional pride until their pride blocks their ability to imagine what they could become.

Evolutionists have hung onto the question for years: Did dinosaurs actually die, or did they evolve into birds? Are dinosaurs not really extinct but flying around us even today?

In a few years, a similar line of questioning might be asked of insurance producers. Will they become a dying breed like the Dodo, unable to respond to rapidly changing conditions? Or will they soar and reinvent themselves?

Then there’s this question about evolution: Do producers find themselves working for a dinosaur? Or an organization willing to do what it takes to adapt? So many questions. So little time.

An effective organization knows that what worked well in the past may not work so well in the future. Does the insurance industry recognize that it’s in need of a culture change? The dinosaur syndrome has doomed many leading companies that have faded into extinction.

Contrast these hanging question marks with Steve Jobs, who made it a point to challenge the status quo. Under his leadership, Apple has been energized by change, if not by creating change. The company achieved phenomenal breakthroughs with the personal computer, music and mobile communications industries, movie streaming and many others.

Apple’s culture thrives on innovation. The example set by Jobs provides lessons—and questions—for us all, including those of us in the insurance industry. As producers face unprecedented challenges, where should companies put their focus? How can producers—both current and new hires—reduce the chances of extinction and instead take flight?

Fork in the Road
All industries experience change when new ideas, technologies, strategies and market conditions come along. Some of these changes might appear random, while others are deliberately generated to transform a business or service or to create a new invention. When new realities or trends emerge, organizations face a choice whether to be a dinosaur or a pioneer (unless, of course, they choose to be an ostrich).

Resisting change involves (usually grim) determination to preserve the status quo, including hanging onto established HR management practices and training: digging in, not digging out. Embracing change brings out the pioneer spirit to shake things up and try out new ways, including hiring staff who are willing to ask wacky questions and challenge sacred cows.

The insurance industry faces a choice regarding the implications of healthcare reform. Which path it chooses will have ramifications for millions of people and, of course, for the industry itself. Will it reinforce outdated habits? Experience and success might become handicaps unless everything from strategy to compensation models is challenged. Might, instead, the industry choose innovation? More specifically, will it succeed in redefining the needed qualities of producers and make new hires from out-of-the-box thinking?

Considering what some brokerage leaders are figuring will be the needed skills of producers in the future, smart, sensitive stewardship of an evolution is recommended. What does this mean?

Making Change
Until the 1980s, the essence of being a police officer in London was catching criminals and providing courtroom testimony. But then, law enforcement was challenged by declining public confidence, tightened budgets, and the threat of security privatization. After a series of race riots, mistrials and shootings, the British had the equivalent of their own healthcare reform: A Royal Commission Report pronounced that, forthwith, public order was more important than law enforcement.

Instead of focusing on illegal drugs, the report found, Scotland Yard should build partnerships with other agencies and with the public to prevent crime and make the streets safer. The analogy is striking: Just as healthcare reform shifts priorities to promote prevention and wellness, the Royal Commission put public safety on the map.

What was the experience in London? With an officer’s stature and performance traditionally measured by how good a “thief taker” he or she was, you can imagine the dropped jaws and the expletives uttered when the report declared the police would have to prove themselves good at community liaison and problem solving.

The police department responded by transforming itself, including the job of officers, focusing on bridging the gap between public and police perception of priorities. The organization was unprepared for the shift in focus and the expected results. Officers at all levels felt ill-equipped to adopt new ways of working, and they begrudged being measured against a different set of standards. Emotions ran high and ran the gamut from anxiety, betrayal and mistrust of leadership to a growing urgency to embrace the commission’s recommendations as fast as possible.

So what are some producers feeling now as they stare change in the face? It can’t be easy for anyone with a core set of long-respected skills to suddenly find his or her value coming under scrutiny. Even after this kind of sucker punch, however, you still have a choice in how you respond. This might be difficult to agree with until you remember the brain.

Can We Change?
In fact, we have three brains. Our oldest (and most developed) is the reptilian brain, the function of which is to keep us safe against perceived danger. It’s this brain that prompts us to fight, flee or freeze and makes us quickly move our hand when we touch something hot. The second oldest brain, our limbic brain, plays an important role in the expression of mood, affection, love, family, group and community. These two brains make a strong team that work together, preferring to keep things safe. It’s from this brain team that we inherit our tendency to resist change.

Our third (and younger) brain—our visual brain—is unique to humans, able to conceive of the future and see things that are not physically there.

It’s worth reminding ourselves of these three brains whenever we face a choice or what we perceive to be an attack. In business, as we have seen recently with the economy, we can quickly get motivated by fear of negative consequences. Staying on this course creates a downward spiral to become the dinosaurs of old. The older brain team is inclined to vie for control, protect turf and undermine change. In so doing, time and resources are wasted, and opportunities missed. Exacerbating this condition is our skepticism about change because of the all-too-common experience with new initiatives that tend to start with a bang and end with a whimper. Our new brains are not yet well formed, unless of course you happened to be Steve Jobs.

It’s not inevitable, however, to resist change. In fact, humans and organizations have been changing throughout history. How can we tap the human capability to change? Two key themes, underpinned by a number of principles, provide a navigation map (the new brain likes visuals):

  • Change should not be feared as much as seen as an opportunity for innovation and new gains. Attitude matters.
  • Important to successful change management is a need to figure out what corporate and individual skills are needed to perform well under new conditions.

Attitude Matters
New challenges may seem downright intimidating if we allow the old brains to dominate our reaction: either/or; yes or no; right or wrong; dangerous or safe. Processing our fears this way inevitably leads us to fight or flight. We need to remember our capacity for innovation and new breakthroughs by visualizing the results we want. Like an athlete visualizing getting to the finishing line with gusto, we have the power to think creatively and act intentionally to inspire new ways of being. It begins with attitude. Instead of responding to a challenge with self-defeating cynicism, effective leadership and teamwork can pull off amazing new outcomes when they employ unbridled optimism.

Ask Most Basic Questions
Like the Metropolitan Police in London (established in 1839), insurance brokerages have been around a long time. Longevity, however, does not guarantee future success. Any business must take stock from time to time and ask questions about its value proposition, priorities and how to best deliver its services and products. There’s nothing wrong with organizations having institutional pride until their pride blocks their ability to imagine what they could become. A valuable question might be, “What’s possible if we were to offer a win-win all round?”

London’s police force knew it could not resist change at the expense of public trust and confidence. In turn, the public knew the cops could not do their work without public support.

The Importance of Systems Thinking
When change brings new realities, we can take a narrow view—how will this affect me—or we can open ourselves to seeing a much larger picture. Systems thinking requires us to engage with new and old stakeholders to gain insights, feedback and ideas that help us to reassess what’s important and to pay attention to a larger set of questions. Rather than acting defensively to retain the status quo, learning organizations will ask: What could we do better; how can we work with others on this; and what new results could we achieve.”

London’s police force, faced with growing questions about its ways of doing business, instigated a conversation across the entire organization and with the public and other criminal justice agencies about what was realistically achievable. This conversation precipitated candor about the frustrations with and shortcomings of traditional law enforcement. The dialogue (at times passionate and heated) changed many assumptions. This paved the way to new thinking and different priorities.

Leadership: A Collaborative Effort
Carving a path to the future used to be the province of a leader or a group of owners. The 21st century is challenging the image of the single hero with the vision and charisma to attract followers. With competition and technological advances and economic and generational workforce trends, the reality is more complicated. We still need leaders, but increasingly the complexity of our systems demands effective teamwork, not only to imagine a future but to implement one.

Why do most strategic plans fail? Put simply, because execution is lousy without meaningful employee and stakeholder engagement. 

The changes to London’s police were steered by a mix of rank-and-file officers and civilians unleashing a new prevailing energy. Although this approach was revolutionary, it succeeded in fundamentally implementing culture change and new priorities. The conversations encouraged people to work together—clearly, no one constituency had all the answers or the ability to pull off desired changes. The result was dramatic: the London Police Force became the London Police Service, and new performance metrics were established. Today, officers are assessed by the level of public safety and for their teamwork, not the number of arrests they make.

Avoid Wait and See
Increasingly, brokerage staffs are expected not only to build and execute sales, but to advise client businesses looking to thrive in a fast-changing world. Brokers are also asked to explain new information on changing options (think captives and state exchanges) and offer consulting services vis-à-vis the implications of changing market conditions. With any change, some embrace the opportunities, others fiercely resist it, and still others simply wait and see.

The smart producers know they must redefine their value proposition and, in so doing, learn new knowledge and acquire new skills—and do so more quickly than the competition. There’s no time to wait and see.

Avoid Self-Limiting Benefits
It can be tempting to believe that changing conditions will affect only one part of your organization. This is silo thinking. Any change will inevitably influence the rest of the system. Producers are not a stand-alone group, regardless of how much they work on their own. Far from marginalizing the role of the producer, change provides them with an opportunity to shape the industry’s future with their eyes wide open to all possibilities. Beyond revenues, renewals and top-line growth, might there be ways to measure contribution to broader containment of health costs or improved health and wellness in the United States? The industry must regularly ask the right questions and change established products, services and processes.

Individual Skills in Context
Conventional wisdom says that organizations need to be resilient, competent, efficient and focused on customers and goals. Yet it’s not organizations that must possess these qualities to thrive but, rather, the people who work in them.

Traditional human relations practices call for hiring the right type of employee and developing staff. The danger is groupthink. It’s equally dangerous to believe people are statues. Producers, as with other talent, have to be agile as strategies and roles change. Identifying the competencies you need begins with gaining clarity on desired performance. As brokers move from sales to consulting, new expected competencies will emerge. Producers must be trained and given lots of patience to allow these skills to evolve to meet new measures of success.

Culture Matters
London’s police shifted from a traditional command and control hierarchy to encouraging questions, creating an environment to discuss anything, and helping the force to use the public’s feedback to improve its performance. The insurance industry’s leaders must shake their conservatism, even if they have much to lose. The future survival of the industry depends on what happens now, as current conditions call for stimulating change to stay ahead.

There is always a choice between holding onto the past or encouraging new thinking. You can look narrowly at insurance, as in a sales agent selling a product to a willing consumer. Or you can become a game-changer who embraces new ideas and collaborations with stakeholders to achieve far-reaching gains both locally and globally.

Paradoxically, while individuals need to learn what it takes to be competent in the new world order, organizations need to create the conditions for innovative action. Brokers should not be expected to pull off changes on their own. Even Steve Jobs needed an organization of nearly 50,000 employees to achieve what he did. He did so by inspiring—in equal measure—a whole generation of entrepreneurs and consumers. Producers and brokerages can do the same—that is, they can fly rather than die.