Part II of IV
In this new four-part series, we explore how your people can be your secret weapon in the next phase of tech-driven insurance transformation. With insights from Bullfrog Ventures' Hilario Itriago and Ana Rojas Matiz ...
Part II: What are the limitations of prevailing approaches to talent development and change management?
In Part I, we outlined why talent development & change management are becoming ever more significant areas of competitive advantage for financial-services organisations big and small. In this follow-up piece, we examine the main failings of today's approaches to this all-important area.
So – the problems with today’s talent-development programmes fall broadly into three areas:
1) People are not focusing on the right competencies to begin with
2) Organisations have suboptimal approaches for assessing competencies
3) The focus for now is disproportionately on IT departments
Let’s start with the first area – the competencies themselves. The problem here is not that organisations have failed to recognise the deep changes afoot. Indeed, they are continually recasting their competency frameworks in response to the changing nature of business-as-usual. As a generic example, all insurance companies nowadays test for digital literacy as part of their recruitment process, something that was not necessarily the case 20 years ago.
The problem really is that the whole idea of business-as-usual, in times of radical change like the present, has less relevance than before. You can give your staff the skills for success today, or train them for a notional future, but the ROI period for each of today’s training cycles is not long, and there are ever higher chances that you will impart either the right skills too late or the wrong skills outright. In short, this is a brittle way of dealing with business change.
‘It will be one set of capabilities today, and I’m sure it will be another set of capabilities in three years’ time,’ Ana, a Partner & Enterprise Development Director at Bullfrog, explains.
Rather than training for specific technologies or putative end-states, organisations should train for flux, with a glance perhaps to the old adage: give a man a fish, feed him for a day; teach a man to fish, feed him for a lifetime.
‘When insurers have large change programmes or large implementations of new technologies, what happens is, we as employees get a training on the technology itself or on the change that’s being implemented,’ Ana continues. ‘And that’s all well and good, but what that doesn’t take into account is whether, as an employee, as a member of a team, I have the capabilities to make the most of the tools, or the most of the processes, to really help the organisation position itself better than previously.’
Smart #tech is not enough for success in the age of #Insurtech disruption... In our latest whitepaper @anarojasmatiz discusses how you can ensure your #DigitalTransformation yields lasting results- through the power of people. Get the exclusive paper here: https://t.co/YZjLkbnI47 pic.twitter.com/HCHkSMch3a
— Insurance Nexus (@InsuranceNexus) 7 February 2018
Talent development must therefore go further than tutorials on flavour-of-the-month tools and processes. As we remarked in Part I, there is no shortage of technical skills in today’s financial-services markets, and these could be regarded somewhat as a commodity. The more pressing concern is how to empower individuals and teams to bring these to bear effectively; there is no virtue in proficiency, only in success.
Soft skills around innovation and leadership, as well as an awareness of the strategic ‘bigger picture’, need to feature more prominently in organisations’ thinking, in parallel to specialised technical expertise. Like stem cells, these competencies allow teams to develop specialised skills as and when the changing business environment demands it.
‘The changing skills landscape doesn’t mean you need a completely different set of people,’ Ana continues. ‘You can still use your same talent, just use them to the advantage of whatever the challenges are at that moment in time, in the roles you’re asking them to perform.’
What an effective leader does is to organise, and reconfigure, the talent at hand to solve a business problem – but half the work here is to figure out what these talent resources are in the first place. The more transparency a leader has over their staff capabilities, the more efficiently they can match different skills to aspects of the business problem, and develop new skill areas on an on-going basis.
This question of transparency takes us on to the second key problem we identified with today’s talent-development programmes: the way competencies are generally assessed does not paint an accurate picture of the current, as well as the potential, skills landscape of an organisation.
In the main, organisations are using one-off, point-in-time assessments like Myers-Briggs and DISC, pigeonholing staff sometimes for whole careers and failing to take account of changes in staff capabilities over time. In a business environment where we can assume that nothing is going to change, we are perhaps safe to make these assessments about people – but this is certainly no longer the case. Hilario gives us an example of how this approach could be improved:
‘Someone may be in a project role within underwriting that lasts 2 years, 3 years, but at the end of that you’re going to ask that person to move to a business-as-usual role within a claims department. Now wouldn’t it be great to know whether in that role the skills required for them to be successful are different from the ones you required from them on the project role? So you run the assessment again, to validate where their innovative skills lie, and therefore whether they match the role you’re requiring them to do.’
Another significant source of blindness in staff assessments is the tendency to rate staff only on those skills directly related to the job role they are performing at the point in time when they sit the test – basically, there are silos in recruitment and training.
‘The reality is that we are asked to use different skills and different capabilities depending on our roles within an organisation,’ comments Hilario.
Advancing your best claims staff within the claims function and your best underwriting staff within the underwriting function has not, historically, been a terrible strategy, but it has well and truly met its limits once insurers are looking to create hybrid functions or to plan for functions which don’t really exist as of today.
This brings us on to the third problem we identified with prevailing talent-development programmes. In the grand scheme of things, the newest department within insurance, and most businesses for that matter, is IT – and this department has also reinvented itself at the fastest rate since its inception. As a result, it is easy to treat the IT function as the exclusive seat of innovation and transformation within an organisation. However, while nearly all business change is IT-driven, this nowadays extends well beyond the IT department, encompassing more or less every team within an insurer.
‘As you get geo-analytics and location intelligence, your marketing teams are going to be impacted; as you get AI and analytics, your actuaries are potentially going to be impacted in the work they do on pricing,’ Hilario elaborates. ‘Many areas of the organisation are going to be impacted to a greater or lesser degree, so the “people challenge” becomes even more important.’
Focusing solely on the role played by dedicated IT departments in the overall business-transformation process results in the incomplete application of new tools and procedures. As we mentioned in Part I, an innovation – regardless of whether it is developed organically or comes about through acquisition – must be connected up to every relevant moving part within an organisation, artery-to-artery, vein-to-vein and nerve-to-nerve.
‘There’s absolutely no good in having a jazzy implementation by virtue of a great technology if it doesn’t really get implemented, and there’s no point in getting it implemented if it doesn’t get adopted within the organisation,’ Hilario points out. ‘And the common denominator across all of those things is the people.’
So, there are in fact what we could term ‘emerging’ roles (requiring innovation, ‘big picture’ vision and leadership skills) across every insurance department … The temptation, or default position, for organisations faced with this demand for new skills is of course to hire and hire and hire, but this is almost certainly suboptimal. Many of the resources for the very positions over which hiring managers are most liable to scratch their heads are closer at hand than thought.
‘Technology, and the world as a whole, is changing so quickly, and you have to be agile and reuse your talent in the different areas your organisation is going to require it,’ Hilario notes, going on to give a concrete example of how this reorganisation could play out:
‘If we say, AI is going to come such a long way in the next 5 years that an insurer will not require as large a team of actuaries as it used to – does that mean your actuaries are all out of a job? I think that’s a simplistic view of the world. If you were measuring your actuaries for their core strengths and competencies within innovation, I’m sure some of them will have capabilities to be CFOs, I’m sure some of them will be surprised to see that they are excellent communicators and change facilitators and that they can become large change-programme controllers.’
How do you hire for times of disruptive change? In this original new paper with insights from @eswimmer & @anarojasmatiz, we outline the skills & competencies needed for success tomorrow- and thereafter. Full paper here: https://t.co/YZjLkbnI47#AI #automation #Insurtech #finserv pic.twitter.com/W4vhXVUGMC
— Insurance Nexus (@InsuranceNexus) 8 February 2018
This widening of scope for staff assessments and Continuous Professional Development (CPD) beyond departmental silos forces us by necessity to categorise people more broadly. Rather than looking exclusively for brittle, ‘vertical’ competencies, we are looking for flexible, reusable, ‘horizontal’ ones.
Click here for Part III, we will be exploring in more detail the flexible, 'horizontal' skills tool-set of tomorrow ... All 4 posts in this series can be enjoyed in our full report, which you can download at any time free of charge.
For any inquiries relating to this on-going content series, please contact:
Alexander Cherry, Head of Research & Content at Insurance Nexus (firstname.lastname@example.org)