Evolving corporate change

In today’s corporate world of cost-cutting, automation, mergers and acquisitions, the biggest challenge facing senior management is dealing with employees who feel “alienated” by events of change. Building a successful “new culture” is no easy task, as many insurance CEOs will testify, however, careful planning from a “top to bottom approach” based on openly communicated objectives can bring about a winning transitional formula.

Common feedback from employees estranged by the processes of corporate change is a sense that developments had been imposed upon them without consideration to the impact this may have on their particular work environment. They also believe that speaking up will result in organizational consequences against them. The end result of this is that companies are getting compliance from employees toward whatever process is being implemented, but they are not getting full commitment.

The culture shift that the insurance industry is driving toward is creating greater challenges for management than most people anticipated. Certainly, the above responses from employees should give pause for concern. The fact that it is real and pervasive creates a bottleneck in the change process.

The following example shows how this culture shift impacts organizations: Two companies had merged and in the ensuing complexity of trying to pull everything together, the corporate cultures clashed. Simply put, employees were not working towards a shared vision and strategy. This “critical gap” allowed negativity, politics and resistance to fill the void. Without fully understanding what was happening, management mislabeled it a “communication problem”.

Creating a future

Knowing what you want to achieve also prevents putting the wrong fix to a problem. So how do organizations create the change they need to adapt to global restructuring, while keeping their workforce committed and motivated?

The first step is to understand how major strategy shifts result in a change of the cultural norms in which employees operate. For example, the rapid shift to technology driven solutions means that employees must multi-task as well as embrace life-long learning. A major part of the change process is developing the right corporate culture that will support the broader strategic goals of the organization. Without this, the negative side of a cultural shift (politicking, gamesmanship, inconsistent rewards and consequences, personal agendas, etc.) can surface. Developing a smart and healthy organization leads to higher morale, lower turnover of key staff and greater productivity.

The implementation of the “evolved corporate culture” is a logical and methodical process that is owned by the senior executives. This is one part of the process that cannot be delegated and must be driven from the top and supported by all members. Successful corporate transformation requires concerted effort and clarity of purpose with four key groups in the organization:

Senior executives. It has to start at the top or it does not start at all. Research has shown that a unified executive team that shares a common vision around change priorities, people management, and organizational structure, stands a good chance of weathering the storm and emerging as strong competitors.

Middle management. Middle management faces the greatest stress during change since they are pushed from the top to implement while being pulled in different directions by staff, customers and business partners. The greatest pitfall is this group’s “passive resistance” in not fully buying into the change process but being an integral part of it.

The front line. Employees on the front line are the “implementers” of a strategic plan with customers and business partners. It is critical this group “buys into the new vision”, and has the tools and skills to do the best possible job.

Distribution system. The effective distribution of products and services is the bottom-line. By tying the brokers more closely into your vision and strategy in a way that all parties share common goals and achieve comparable benefits will significantly increase success. Partnerships with brokers are in an evolutionary stage, and more can be achieved by managing this relationship effectively.

The overriding goal of the “cultural evolution” is to create an ambidextrous organization that is inventive and able to respond to the changing demands of the marketplace. When all parts of the process are followed, the intended strategic and cultural change is achieved. If one part of the change process is ignored, organizational distress occurs, resulting in not only failure at achieving the objective of change, but the corporate culture is negatively impacted.