The principles and practices of organizational transformation have direct application for individuals in the insurance and financial services industry.
In 2005 the new CEO of Allianz Life, Mark Zesbaugh faced the sort of challenge every CEO loves. The company was growing at 20 percent year over year. To most traditionalists this would be good news and clearly not any sort of call to action. Mark was no traditionalist and knew that while from a financial perspective this was indeed good news, from a larger organizational perspective it posed a challenge as the existing systems, processes, and practices for leading and managing the company were not sufficient to enable this growth rate much longer. Thus was born Pursuing our Potential, a large-scale transformational project for the entire company.
The speed of change
Transformation means a large amount of change in a small amount of time. To those watching from afar it can often look like magic as things do change quickly. Those on the inside know that this scale of change is only possible with a big commitment to learn, a strong structure in which it can take place, and consistent, coherent work. The challenge was simple: How do we transform Allianz Life from an organization that was getting increasingly bogged down in complex processes into a performance-based enterprise.
What Your Peers Are Reading
Over the years we have watched way too many change or transformational efforts fail. And it was imperative that we not fall into any of the historical traps. Transformation isn’t about getting people motivated or putting up posters, slogans, and new organizational charts. To successfully transform an organization requires consistent work in three areas.
First and most important is the mood of the organization. Most individuals and organizations are in the grip of unproductive moods like distrust, cynicism, resentment, resignation, arrogance or complacency. No amount of ‘happy clappy’ motivational work is going to make a difference here and thus it is crucial to know how to move people into the generative moods of ambition, confidence, and trust. This is vital: Mood is everything because if you don’t get this right nothing else will matter. We have a proven method for shifting the mood in an organization, but that in and of itself is insufficient.
The second key area is management practices. Most of what we call ‘modern management’ practices were developed by people who were born in the 1800s. They were deployed in the early 1900s for Henry Ford and his peers who were ushering in the industrial era.
Today the value generators in the economy and certainly everyone in the insurance and financial services industries are what we have termed ‘Coordination Workers.’ These are people who are educated, agile, mobile, creative, innovative, and adept problem-solvers.
They generate value not by making things, but by their effective coordination with each other to produce customer satisfaction. In the industrial era management meant supervision and people went to work out of survival. Coordination workers bristle at supervision, as they are educated and find it demeaning. Today, work is no longer about making things; it is about cooperation and collaboration. Thus, management has to be oriented towards enabling those practices, not supervising activities. We have built a new body or work called Commitment-Based Management, which is designed especially for today’s workplace. The simple reality is that literally every manager in the country has been schooled in the practices of the industrial era. It is what is still taught in business school and it is what the person who had the job before you knew and passed on. While common, the practices of the industrial era are increasingly ineffective in today’s world.