Part 3 on Leadership: Challenges and Assistance in Leading Change

Posted on March 25, 2014 by Marc Lanzkowsky

Collaborating Can Make The Successful Difference

In Leadership: The Change Process In Claims Requires A Different Approach, I put forth the position that changing a claims organization needs a new brand of leadership skill that does not usually exist in the traditional claims organization. In Part 2 on Leadership: Developing a Strategic Transformation Team, I addressed how to break from existing management process to achieve effective strategic results. In the final installment, I discuss how challenges around leading change make it beneficial to bring in strategic support to help achieve the desired success.

Additional Challenges in Leading Transformational Change

Oftentimes, managers are too close to individual problems to have the necessary perspective to see what needs to be done to benefit the whole organization. As a result, many fail to achieve true Strategic Transformation.

There are three main reasons why building Strategic Transformation can be such a challenge:

Lack of Independence – Management has political ties and history within an organization and are not always free to ask the sometimes difficult questions and make recommendations that are truly in the best interests of the organization.
No Objectivity – Often companies are attached to their existing organizational and procedural structure. Despite very good intentions, it is human nature for individuals to get emotionally connected to a particular method of doing things. Management can be entrenched with emotional or political agendas as to how things are being done. Change requires an objective, fresh viewpoint–without worrying about what people in the organization might think about the results and how they are achieved.
Limited Experience –Strategic Transformation requires a set of skills that combines project management with a strategic sense of determination. Managers have experience and skills on how to execute what has been done but lack the depth of knowledge to execute change that transforms their organization. Most claim managers come from a purely technical claims handling role and may lack experience addressing organizational problems, thus failing to grasp all the process concerns of their own operations.

Facilitated Strategic Transformation to Achieve Success

Bringing in an expert from outside the organization is one way to jump-start the Strategic Transformation process. Independent, objective experts can help facilitate the building of teams and focus the organization on successful, rapid implementations. In addition, the best facilitators will have specific capabilities in managing large scale project management, and insurance industry specific knowledge with proven methodologies in management. Such facilitators can:

Identify Problems – Sometimes employees are too close to a problem inside an organization to identify them. Facilitated sessions can help draw out what many in the company already know but could not see.
Supplement The Staff and Minimize Disruptions – Getting staff to focus on problems is difficult when the call of everyday business comes. Having a dedicated independent resource helps to balance those situations and ensure projects move forward on time and on budget. Delays can have disastrous effects down the chain and across other projects. Supplementing staff can help avoid these pit falls.
Objectivity Allows 3rd Parties to Act as a Catalyst- Most employees resist change. Regardless, change is needed, and an independent may be brought in to “get the ball rolling.” In other words, the facilitator can do things without worrying about the corporate culture, employee morale or other issues that get in the way when an organization is trying to institute change. They can also be there as the independent voice to validate how the change will help improve the organization.
Inject New Ideas – A fresh set of eyes can bring experiences from other transformation projects to inject new change ideas. At one time or another, most businesses need someone to administer “first aid” to get things rolling again.

The Time to Change is Now

In today’s market it is harder for insurance companies to distinguish themselves from competitors. For companies to gain an advantage, carriers must adapt to changing market conditions, embrace technology and further expand their use of data analytics. Moving rapidly to manage change requires new ways to manage multiple initiatives. Strategic Transformation is a method for meeting these challenges and ensuring that projects are rapidly deployed on time and on budget.

How Have You Tried to Move Your Organization Through the Change Proccess?

Part 2 on Leadership: Developing a Strategic Transformation Team

Posted on March 17, 2014 by Marc Lanzkowsky

Breaking the Linear Approach by Leading Strategic Transformation

In my last post, Leadership: The Change Process In Claims Requires A Different Approach, I put forth the position that changing a claims organization needs a new brand of leadership skill that does not usually exist in the traditional claims organization. Continuing with this theme, I will address what it means to break from existing management process to achieve effective strategic results.

Breaking from the linear approach to management is the key to leading Strategic Transformation. A standard organization will have a head of claims and then a variety of department heads to manage each line of business. Depending on the company there may be additional senior managers to handle various operational aspects of the group, which may include support staff, call center, technology and data analytics. Under this method, projects get initiated and managed within the same linear organizational framework. The result of this approach is a development process built in a silo that limits input and understanding of possible interdependencies that may exist outside the framework.

A Strategic Transformation Team, however, is formed with a center to lead change over multiple projects. Each project team consists of people from a variety of departments and levels. The teams are charged with creating objectives, setting priorities, securing buy-in, and executing on the vision. The teams are not formed within a linear framework and can draw upon different expertise to get the project completed. The Strategic Team in the center can drive all projects, manage interdependencies, and facilitate moving projects forward without distraction from the day-to-day management. Their focus is on the bigger picture and not limited within an individual project silo.

The Best Transformation Happens When Dedicated Transformation Teams Are Formed

To make effective change rapidly, it’s best to create a dedicated team to deal with change as their sole mission. This team will have the principal objective of producing outcomes and will be dedicated to adopting and improving the organization on an ongoing basis and not as part of some once every five year strategic plan. The independent team will also have multiple benefits which would include:

A central pressing vision to produce valuable effective change
Being focused on the big, as well as little pictures
Rapid deployment capability to get things moved to implementation
The ability to challenge the status quo to break conventional methods of project deployment
Expanded institutional knowledge about multi-disciplinary impacts to improve team efficiency on future projects

While building such a team internally is possible, there has to be an initial effort on getting commitment and focus from the staff to work in a new framework that is different from their existing work environment. For this reason, it is often best to bring in a third party to help facilitate the process.

How a Strategic Transformation Team Works

Getting from point A to point B requires a methodical approach to projects. The Strategic Transformation team will typically establish a Project Management Office (“PMO”) to help to successfully execute those projects identified “as needed to improve the operation.” The areas of responsibility under a PMO include:

Project identification and defining project purpose and requirements
Organization and management of work resources to execute projects and requirements
Assuring timely and useable deliverables
Coordinating multiple projects and dependencies
Reporting to key stakeholders and organizational communication

With a PMO established, projects can be outlined and staged appropriately to both manage costs and deal with interconnecting parts. Additionally a PMO can facilitate the gradual introduction of new processes and technologies which might otherwise disrupt the existing environment. This will allow an organization to phase in procedural changes in a manner to help gain cultural “acceptance” and “buy in” from employees.

The main team will go through a series of steps following established project management techniques to define, plan and execute on multiple strategic concerns simultaneously. The overall focus will be developed; and for each project, a similar multistep approach will be used and address the following.

Business champion/leadership assignment
Prioritization of project within scope of organizational needs, other projects and budget
Strong objectives established
Well defined project charters drafted and approved
Interdependencies/relationships explored and managed
Develop a risk analysis
Rapid and timely implementation
Buy-in and adaptation to change addressed with staff and stakeholders
Conclusion and re-explore

Achieving strategic transformation is possible with the right teams in place. Regardless, sometimes those efforts still hit road blocks. In my next post I will discuss how assistance from thrid parties with transformation experience can help to expedite the process or, at the very least, provide a second set of eyes to oversee the work being done.

How successful has your transformation team been?

Leadership: The Change Process In Claims Requires A Different Approach

Posted on March 10, 2014 by Marc Lanzkowsky

Meaningful and Successful Improvements to Claim Departments Require a Different Approach to the Management of the Change Process

Successful organizations are always changing and adopting to improve their operations, lower costs and increase efficiencies. Claims departments are no different and have been under pressure to transform their operations and live by the mantra of doing more with less. Good claims organizations continuously evolve and adapt to ensure they add value to the overall business. Regardless, changing to meet the challenges of the marketplace is often fraught with problems and difficulties. Many initiatives fail to get off the ground or fail in the implementation process. Change can be very successful and if managed and led correctly. To change effectively there must be a strategic approach and a change in how these initiatives are led.

Why is claims transformation so difficult?

One reason claims transformation is so difficult is that claims departments are generally linear organizations. The claims value chain, or the process of moving a claim from first notice to resolution, is always looked at in a straight line. A claim comes in, is evaluated, reserved, and then resolved. Of course there are many steps in between depending on the claim, but generally all claims follow a similar pattern from beginning to end. Claims departments are often structured in a linear pattern as well. From intake units, to claims handlers, adjusters, managers, and operations – the claim moves through the organization in a linear pattern. Claim managers know this pattern and manage it well. However successful transformation does not follow a linear path. As such, many claims managers fail to have the transformational leadership skills needed to move projects to a successful outcome.

Change Leadership is Different Than Management

Management of the claims process is not the same as providing leadership to change processes and the culture that has been entrenched to those processes. Leading change is very different than managing change. Management guru and Harvard Business School Professor Dr. John P. Kotter puts is best when he said that:

[m]anagement makes a system work. It helps you do what you know how to do. Leadership builds systems or transforms old ones. It takes you into territory that is new and less well known, or even completely unknown to you.

Although most claim managers are well suited to managing core business functions such as staffing, claim volumes, customer satisfaction, budgets, day-to-day process and other operational and technical aspects of running a claims department, they often lack the skills necessary for effectively managing strategic change initiatives. In order to successfully lead change, a strategic vision and a specific program for management of a series of transformational projects to support those visionary objectives needs to be developed. Taking short-term approaches to individual tactical solutions will not create the strategic outcome needed to transform the organization successfully. Achieving this type of Strategic Transformation requires a new paradigm and skillset to deal with managing multiple interconnecting projects.

Another reason transformation is so difficult is that in response to problems, claims executives will initiate a variety of complex transformation projects to improve operations based upon the same linear task based approach to their day-to-day management. Claims executives use this linear approach to identify problems, conceive and implement solutions, manage expectations and results all within an enterprise environment where multiple interdependencies and stakeholder interests may impact outcomes.

Transformation Requires a Different Appraoach

Despite good intentions to improve operations many initiatives become ad-hoc responses to an immediate problem rather than a holistic solution to operational ills. This reactive focus means that projects will often get initiated in a vacuum, not managed fully, delayed or simply never implemented. To transform organizations, and achieve Total Outcome Management, executives need to adopt a proactive holistic Strategic Transformation approach to changing the organization for the better.

The Claims SPOT

Identifying opportunities is easier when you know how to SPOT the issues

Monthly Archives: March 2014