04-09-19 Blog: Forget Technology and Dated Business Practices – Today’s Persistent Legacy Concern is Leadership
Forget Technology and Dated Business Practices – Today’s Persistent Legacy Concern is Leadership
April 9, 2019 | Marek Kaszczyc
A frequent observation of the re/insurance industry is that legacy issues are a key constraint. This analysis typically refers to archaic processes, outdated systems not fit for purpose, or books of business in runoff. Much is written about legacy systems presenting difficulties around integration within the modern digital economy; and the industry is currently facing disruption, in part because of rapid insurtech developments.
Antiquated leadership practices also inhibit the insurance industry. The old-fashioned, hierarchical style of bygone decades still survives in many boardrooms and offices. In such organisations, leaders routinely expect to give instructions, and staff is expected to accept passive roles in carrying out whatever their bosses tell them to do. The traditional way of managing staff and teams, however, is no longer sustainable.
Technology is transforming every global enterprise at breakneck speed. The way people perform and expect to be managed in the networked economy requires a fresh look at legacy leadership practices and organisational culture. Moreover, the competition to attract tech-savvy, young professionals is extremely fierce, and this rising demographic group has different expectations about workplace culture and leadership. Technology, such as smartphones, light-as-a-feather laptops and superfast broadband, has driven a fundamental change in business practices. Consequently, the old-fashioned ‘top-down’ style of leadership is under scrutiny as the most effective way to manage a modern workforce.
Today’s technology-oriented professionals, especially millennials or the younger iGeneration, are inherent problem-solvers and thrive in dynamic work environments where they get the opportunity and instant feedback to directly engage in developing and improving the business. If insurance organisations wish to build flexible workplace environments in which the new workforce thrives, then the top-down form of leadership should be reassessed.
I believe the management style best-suited for fostering a fast-changing, technology-driven business such as insurance is one where the leaders inspire, stimulate, and support their teams to create value for themselves and their clients and stakeholders. Our industry’s professional culture needs to evolve to become more open, transparent, and collaborative. Our local, national, or global teams need to engage daily in cross-functional projects. In fact, for our company, as in many other enterprises, this kind of working environment sparks a high level of innovation and energy.
When it comes to building nimble and responsive teams, the insurance industry has lagged other sectors such as finance, banking, and technology development. For example, technology companies are very good at building teams and squads, led by subject matter experts; and organised to be deployed very quickly for meeting client needs.
To build an adaptable company requires a distinctive perspective on leadership, compared to the current approach in most insurance businesses. Management needs to be flexible, and actively focused on encouraging and promoting collaboration. Microsoft founder Bill Gates astutely noted: “Leaders need to provide strategy and direction and to give employees the tools that enable them to gather information and insight from around the world. Leaders shouldn’t try to make every decision.”
Creating a suitable leadership and organisational culture — where the staff feels empowered and valued — is vital, if insurance companies expect to succeed in attracting young talent. Clearly, millennials look for so much more than just good pay when they appraise their career or workplace. They evaluate the personality, principles, and beliefs of a business; and they are especially attracted to companies that have a sense of social and moral responsibility, as well as flexible and non-hierarchical structures. They are used to “asking Google” and will rely on a variety of online sources when researching a career or a company. They routinely use social media and digital career and employment tools — sometimes ignored by employers — to get near real-time insight into the values and working practices of potential employers, often well before deciding whether to apply for a specific job. Additionally, they will voice candid opinions on social platforms, especially if mistreated, overlooked, or disregarded.
Another critical but under-appreciated component of the modern insurance working environment and its leadership outlook is best described as supporting and nurturing a culture in which people feel “safe to fail.” Within limits, a “safe to fail” posture means employees are actively encouraged to be creative and explore imaginative ideas, while feeling self-assured that honest mistakes in trying to improve the business will not lead to disciplinary action, career impediment, or termination.
As an objective for enlightened leadership in the modern insurance enterprise, creating a vibrant and empowered working environment becomes a self-fulfilling prophecy. Satisfied and motivated people who see real opportunities for self-development can fast become passionate brand ambassadors. In turn, they will convey the company’s attitude and values to peers and filter it online, which can encourage high-quality talent to look towards the industry and the company as viable career options. However, those outcomes are only possible when authentic leadership, based on strong values and healthy transparency, is regularly practiced and demonstrated throughout the organisation. As John C. Maxwell said, “People may hear your words, but they feel your attitude.” Leaders in today’s changing business environment need to be close to their people, enhance collaboration, create synergies, and proactively support the personal and professional development of those who work for them.
If the insurance industry can shed some of the legacy characteristics of hierarchical culture and embrace more of an insurtech-inspired (i.e. flexible, start-up) mindset in the workplace, the overall market will, for the first time in decades, be in an excellent position to attract and retain some of the best and brightest up-and-coming professionals. Otherwise, to quote Stephen Covey, “if we keep doing what we are doing, we are going to keep getting what we are getting.”
To exchange ideas on how to empower teams, transform organisational culture, and strengthen leadership practices, please contact me at email@example.com.
Marek Kaszczyc is vice president and head of Poland operations at Xceedance.