Other parts of this series:
- It’s time insurers bust the myths about change management
- Insurers are overlooking key change drivers as they ready themselves for digital disruption
- Disrupt or be disrupted: It’s time for insurers to explore another route
- Three change management moves that will help insurers come out on top in the digital economy
Many insurers are embarking on major change programs using outdated change management practices and relying on conventional wisdom for direction. However, traditional change management practices often don’t work in today’s digital economy and a lot of conventional wisdom about how to handle change is false.
Few of us would hike into unknown territory without an up-to-date map and just rely on the hearsay of others. Yet many insurers are embarking on major change programs using outdated change management practices and are trusting conventional wisdom to set them on the right path. However, traditional change management practices often don’t work. They weren’t designed for today’s dynamic, and often unpredictable, digital economy. Furthermore, a lot of conventional wisdom about how to handle change is just plain wrong.
Our studies of 250 major change initiatives, spanning more than 15 years, reveal that some of the most common perceptions about managing change are actually false. Here are some of the big change management myths:
Too much change, too fast, is destructive. Wrong. Top performing organizations thrive on change. They usually have more change taking place, at a faster pace, than their less successful counterparts. Furthermore, they’re able to drive change longer and thereby gain greater benefits.
Change causes organizations to go off track. Not so. We found that 85 percent of organizations that struggled after undergoing a major change initiative had underlying problems that were present before they began their transformation. Many managers and employees might blame change for their organization’s woes. But, what usually happens is that a change program brings deep-rooted problems to the surface. Typical hazards are poor management and a “silo” culture that prevents different parts of the organization from collaborating. Well run companies, with good management, strong change-leadership across the organization and a culture of trust, rarely go off track as a result of a major change initiative.
Performance dips during the early stages of change. Quite the opposite. Many management textbooks warn of the drag of workforce inertia and resistance to change at the beginning of a change program. However, our studies show that well run businesses with a clear vision and direction, improve their performance, especially cost management and customer service, at the start of a change initiative. Change leadership, at all levels of the organization, has the highest impact on business performance during transformation. Similarly, the clarity of vision and direction displayed by change leaders has its greatest influence while the organization is undergoing change.
People need to understand changes before they can commit to them. Wrong, again. Trust in leadership is more important than an understanding of the changes. In top performing organizations, employees trust their leaders and are willing to support change even if they don’t know where it will lead. Organizations with trusted leaders, throughout the enterprise, not just among the executive, can start and accelerate a change program without first educating employees about all of its objectives and consequences.
In my next blog post, I’ll discuss how insurers and other organizations can prepare themselves to change quickly and effectively. Until then, have a look at these reports written by my colleagues Warren Parry, Randy Wandmacher, Paul Nunes and Joshua Bellin. I think you’ll find them useful.