We often use innovation and transformation synonymously. Both words evoke thoughts of change and modernization. Both innovation and transformation are important outcomes of the change management life cycle.
We know that innovation is occurring all around us, and in simple terms, it is finding new ways to improve or change something that already exists for the better. Alternately, transformation is the result of moving from one state to another.
So, should we innovate or transform? Do both? What’s the difference?
I think the best way to answer is to explore the differences between innovation and transformation in insurance and breakdown each into definitions and examples. Then you can determine where your company is in the change management life cycle and what will work best for your organization.
What SMA has found as we work with insurers is that innovation and transformation are not only distinct, but they are decidedly different, and their impact on organizations is different too.
Innovation is defined by SMA as rethinking, reimagining, and reinventing the business of insurance. We have seen the results of innovation in business models, customer relationships, new products and services, and how investments in technology are made. A perfect example of innovation is the focused improvements of customer experience.
Once, customers had to push paper and phones calls back and forth between agents, but innovation has made these types of interactions a distant memory. Today, chat, apps, portals, mobile, and others have started to create an innovated customer experience.
It is different and (arguably) better. Similarly, in the data analytics arena, innovation in the ways we use and apply data has changed the way insurers operate, price policies, handle claims, and compete in the market. Innovation makes something that once seemed impossible possible. It is rethinking the way of doing things, questioning the possibilities, and turning them into action.