A theologian named Reinhold Niebuhr might have the definitive view on the subject of change. In his famous "Serenity Prayer," Niebuhr wrote:

God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.

Technology has brought so many constructive changes to the insurance world that the "courage to change" has become less of an issue for the most part, especially when change is borne of competitive necessity. The "wisdom to know the difference," however, is a quality that can be in short supply, and that's one reason change management has become an increasingly important factor in the work done by insurance carriers today.

At its most basic level, change management involves retraining and making sure the technology and business staff members are able to take advantage of new solutions that have been installed and understand how their relationship with the systems has been transformed, explains Matt Josefowicz, insurance director for the Novarica consulting firm. On a larger scale, though, Josefowicz believes change management is a question of articulating a vision for the enterprise and the role technological change plays in that.

Managing change often is associated with a particular project or program, notes Walter Gossage, Accenture's global lead of the change management practice. "The majority of clients I work with view it as something they have to get right on major programs, so often they put together a disciplined approach to doing that, particularly affecting changes for people and their jobs," he says.

Other clients are looking at embedding a long-term change capability internally to make the work force more adept at faster change, adds Gossage. "It really has to do with what type of program to put in place to make sure you get the outcomes you want from a specific change," he says.

Some workers are resistant to change, but Gossage points out it's not always because they don't want to change. "It may be they don't understand why the future vision is better than where they are today," he suggests.

In addition, Gossage believes, leadership needs to take away options not to change wherever possible. "If you are replacing a 20-year legacy system with a new integrated ERP, you need to make sure you turn the legacy system off as fast as you can," he says.

Leadership needs to stay a step ahead by knowing what types of work-arounds the employees might try to perform manually and make sure doors are not left open to options to avoid change. "What [employees] want is to understand why they are being asked to do something differently, to see why it is going to be better, and then be trained to be successful so they don't feel like the odd person out with the new model," sums up Gossage.

Doug Allen, vice president and director of information technology at State Auto Insurance Companies, relates he and his managers have instituted within their IT team a great deal of change in the last two years. Those changes include areas such as quality assurance, understanding IT's capacity, and measuring how long it takes to perform certain activities, he says. The carrier also is changing how performance measurement is judged in terms of an employee's personal objectives and how those objectives coincide with the strategic road map of the company.

"My comments to [IT staff] are we have thrown a lot at them and stretched them in ways they are not always going to be comfortable with," says Allen. "What we have to do is put an anchor in the ground so, from an elasticity standpoint, we're not going to go back to where we were. Where we are right now may need to be tweaked–not everything we've done is perfect–but we have to make sure we don't go back to the ways we used to do things in the past."

VETERAN TEAMS

Many insurance companies are staffed with veteran employees who are used to a certain way of doing business, and Josefowicz maintains they often don't understand the strategic need or the opportunities that will result from changing business practices or operations. "Articulating that to people, letting them know what the expectations are given the new tools at their disposal, and educating them on how to use these new tools and how the organization is changing are the critical elements in technology-related change," he says.

There have been important innovations recently, continues Josefowicz. He points to the way business process logic has been removed from the presentation and the data layers and is captured and managed on its own in a way that is separate from the other layers. A second area of change involves service-oriented architecture as insurers shift the way they think about delivering technology capabilities.

Such shifts can be difficult, Allen asserts, particularly with a head count of 350 members in IT, 22 of whom have at least 20 years of service with the carrier. "For people who have been ingrained in our IT culture and the company culture, that's a lot of change," he says.

The direction for change at State Auto came after Robert Restrepo was named president and CEO in 2006, according to Allen. Despite initial resistance, Allen points out, "there were things we needed to change to be competitive and viable."

Employees could be excused for wondering why things had to be different. Early that year, Forbes magazine named State Auto the best-managed insurance company in America. Today, though, Allen believes no one is questioning the direction of the company. "Even the new people we've added have commented about how open people here are to change," he says.

The way companies introduce change is important in selling the overall program to employees. For example, Allen pointed out to employees if IT does better quality assurance upfront, it will fight fewer fires later. "People could see how this could help them do their jobs better," says Allen. "As change occurs, you have to sell it and communicate it to people."

The need for communication led Allen to make an objective having at least two divisionwide IT meetings–in-person and through teleconferencing–this year, despite the difficulty of bringing together IT personnel spread to multiple offices. In addition, he meets with his IT management team–which numbers about 60–every two weeks. At those meetings, Allen often brings in people from the business area to spend 20 to 30 minutes talking about the business through their eyes so his managers can understand what the pain points are for business and what everyone's role is within the organization.

TOP TO BOTTOM

"If you look at the industry we are in, which is going through a tremendous amount of change, I've never seen an organization more willing to change," says Michael Fergang, vice president and CIO of Grange Insurance. "The pace of change is accelerating, and if you are attuned to what's going on, you can't help but want to change."

When Phil Urban, Grange Insurance president and CEO, came to the carrier nine years ago, he brought a culture of expectation of constant change, so Fergang believes it has been easy for the IT group and the business units to influence those changes. "One, it's expected, and two, you better be ready to change quickly," he says.

Change is not just a top-down exercise, though. "A user community that is frustrated with its inability to do things effectively can be energized if it gets its hands on some new capabilities," says Josefowicz. There needs to be a top-level vision and articulation of the impact new capabilities should have on the business, but he contends the business side also has to invest in bringing new technology capabilities online. "Senior [business] executives have to acknowledge and support that level of change management," he says.

Change also comes from the bottom up, and Grange encourages suggestions from agent users through the carrier's agent portal. The carrier has advisory boards, as well, which share their thoughts with company leaders. Grange officers randomly visit CSRs, the agents, and the principals to seek their opinions. "The dynamics of the industry are changing," says Fergang. "[Agents] are watching what others are doing and coming up with ideas for us."

Carriers don't always look at change from an end-to-end point of view, indicates The Hartford's Jim Rogers, director of e-business and technology, particularly when it comes to working with their independent agency force. Customer satisfaction needs to be a priority. Agencies also need to step back and look at how they interact with a customer on change, he adds.

Rogers has been working with the industry standards group ACORD on a program called "The Power of Change" to help independent agents better understand customer needs and what the carriers have to offer. "The industry is bringing market-brand awareness of the types of technology available, whether it is real time or other service capabilities carriers offer," says Rogers. "It's a lot of information for an agent to process."

He acknowledges the difficulty agencies have assimilating all the different processes. "As technology continues to change, [agents] need a repetitive process in which they can assess what the customers want, what their own needs are, what the gap is between the two, and how [the agents] can be more operationally efficient," he says.

COMMUNICATION FACTOR

It is the industry's responsibility to provide clear communication as to what some of the key concerns are regarding change and what some of the opportunities are for improvement, Rogers believes. "Things are changing fairly quickly for insurance," he says. "It doesn't move at a lightning pace, but it seems to be moving quicker with the ability for carriers to use SOA to bring products to market faster and leverage technology in a more cost-efficient way."

Change management programs often boil down to communication and training–two fundamental elements insurers have to get right, explains Gossage. With communication, there is no universal answer. "You do your homework and learn and understand what the communication norms are of the organization, its people, and its culture," says Gossage. The most trusted source of information about what's ahead usually is the direct supervisor, he notes. "You want to build communications that leverage that channel," he says.

When examining the work force and its characteristics–how distributed it is, its location, its demographics–companies can't be afraid of tapping into new things that can work if they fit the culture. Gossage observes corporate intranet news channels and blogs are becoming a more common and successful way to communicate with employees, although the traditional town-hall-type meetings still work.

At Grange, the carrier uses a tool for tracking changes so all changes are documented and risk assessments are applied to those changes. "We have formal processes, like all companies," says Fergang. "Our internal auditors are always concerned about change process. They want to be sure we have a good structured process."

Grange gives autonomy to the business units to prioritize and manage projects. "We give them latitude as long as the business unit and IT can support it," says Fergang. Enterprise projects work through the portfolio management group. "There's a lot of discipline around the project side," he says. "Internally, documentation is on a portal so everyone on the project is involved."

Josefowicz maintains the biggest issue related to change management is not so much related to IT but between IT and business so the business users can take advantage of the capabilities the new technologies can deliver.

CHANGE: THE NEXT GENERATION

State Auto has put out the call to those working for the carrier who fall under the heading of the millennial generation–those of college age in this century–to form focus groups to discuss how they like to buy insurance and how they like insurance to be serviced. "It gives us an opportunity to compare what they want with the capability we have as an organization to see what kind of gaps we may have," says Allen. "If we're not doing anything with texting and that's what this generation likes to do, then we better start looking at the technology that can help us support that function."

Allen also wants to pick their brains on what they expect from their employer. "I'd like these groups to show us how they use a social network to interact," he says. "If we don't fit into their lifestyle, they'll move on to companies that can support the work lifestyle they want," he says.

Some of the discussion on Web 2.0 and what the new generation of workers expects in the workplace may be overstated, though, Josefowicz believes. "The most important thing for the next generation of employees is to not have clunky, difficult-to-use interfaces that make their job unpleasant," he contends. "I think Web 2.0 is an easy catch phrase, but I don't think there are that many people going into the insurance industry who are looking for social networking and collaborative content generation. [More likely] they are looking for the applications they are going to sit in front of for eight hours a day not to [be lousy]."

Today's generation has grown up having consumer technology products delivered to it with a great deal of attention paid to usability, points out Josefowicz. "I think the most important thing is not Facebook but Amazon, Google, and the iPhone–interfaces that let people find the information they need and conduct the transaction they want to conduct without a lot of training on how to use the system and without a lot of tricks to remember and manuals to read," he says. "People expect computer systems to be intuitive. If not, they find them very frustrating. That will be even truer for the next generation of workers."

STRUCTURE WORKS

A structured approach to change encourages successful outcomes, advises Gossage. "It's possible to navigate your way through a change program that is not well structured, but the odds are against those programs being very successful," he says. "They usually cost more and take more time and effort."

Gossage recommends a structured approach that has a base foundation for what comes first and what sequence to follow. The structure helps the work force move through the change process. "At the end of the day, change management is pretty straightforward," he says. "It's the notion you want to make a particular audience aware of what's coming and help those individuals to understand it, be capable of what those changes are, and be committed to the changes so they can help others in their peer group or help the enterprise get faster. You build structures with that in mind."

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