As stability is important, many (re)insurance companies find it difficult to react to short-term changes in their business environment. This is exactly where agile business transformation can help. The concepts of diversity, equity and inclusion (DE&I) and agility have many overlaps, their values and principles in particular showing many similarities. Building an agile, self-sustaining and successful organisation makes the culture conversation a must-have item on the leadership agenda.
The (re)insurance business was once stable and predictable – but that’s no longer the case. Growth without sacrificing profitability is challenging, climate change is irrevocably impacting certain risk profiles, distribution needs have become truly omnichannel and customers expect products that are tailored just for them. And all the while, technology has continued its relentless advance and an emerging player ecosystem is threatening to shake up customer acquisition. Moving to more agile and technology-enabled business models requires a shift in workforce behaviour, culture and mindset. It’s essential to prepare the workforce for this ‘new normal’ and to secure their buy-in to make the most of new opportunities and the potential to carve out fresh revenue streams. Technology alone isn’t enough to transform business and boost results. Success requires people with the right skills, backed by the right technology. Agility is more than just a framework, it’s a way of working and mindset leveraging unique and diverse skills – and this is where the values and principles overlap with DE&I. A commitment to diversity, equity and inclusion brings purpose to your business, ignites commitment to employees and provides benefits to society.
‘Agile’ comes with a governance, a mindset and a way of working that helps companies meet increasingly complex market requirements, and this affects strategy, steering, structure, processes, culture, people and leadership. It allows teams to use their unique skills and to deliver maximum value to customers rapidly and flexibly. The agile mindset can be summarised as focusing on what’s right, instead of who’s right. It’s essentially a moving away from traditional and bureaucratic leadership towards an innovative, collaborative and self-organised environment, in which innovation and customer value are among the key factors. ‘Agile’ breaks down barriers, flattens organisational hierarchy and gives employees far more independence and autonomy.
Agile teams enact three pillars to uphold their ability to minimise risk and maximise the value they deliver with each iteration: transparency, inspection and adaptation.
Even though the three pillars of Scrum and the Agile Team Values weren’t originally made explicit, when we revisit them with a commitment to DE&I, their value increases exponentially. DE&I is therefore good for agile teams, and agile teams can become more diverse, equitable and inclusive by intentionally practicing their pillars and values with DE&I in mind. Further interesting facts are available on the Scrum Alliance website. Including agile methods in their daily work allows insurers to change over time, and – more importantly – to respond to uncertainty with the stronger mindset of who they are and who they want to be. Moreover, this is about creating a trusting and highly productive environment.
The agile manifesto, along with other industry standards, implies a connection between ‘agile’ and DE&I. In fact, the agile manifesto’s first value of ‘individuals and interactions over processes and tools’ indicates that, for ‘agile’ to work, DE&I is a must-have. All these values can be seen/interpreted from a more cultural perspective. For example, the last value ‘responding to change over following a plan’ is a good way of responding to people’s needs, and not following strategies and trends that are planned for several years in favour of staying flexible to react to any upcoming changes and developments. It’s important to listen to employees’ needs and adapt the culture and conditions of the company accordingly. Today, more than ever, it’s important to create a diverse and equal environment in which people feel comfortable to work. Otherwise, innovation and motivation of the teams will decrease dramatically and therefore also the performance of a company measured by its KPIs.
By focusing on agile processes and tools and putting DE&I alongside them, innovative thinking, employee well-being and disempowerment of team members is increased and therefore outcomes and missed business opportunities/leads are decreased. Successful business agility needs the right culture to be aligned with strategy, purpose and the operating model. Culture can be a powerful force, which supports retention and acts as an insurance policy against future crises.
We’ve seen that an organisation’s culture is deeply rooted and slow to evolve. However, 2020 showed that – when necessary – organisations can achieve rapid changes with a targeted focus on a few, critical behaviours. From now on, as leaders take on a long list of business imperatives such as digital transformation and adapting to changing working practices, organisational culture can be a powerful ally. Of course, there’s still work to be done if organisations are to translate the good intentions of leaders on the subject of culture into measurable gains in employee retention, DE&I and transformation initiatives. Yet, when aligned with strategy, purpose and the operating model, culture can be a powerful force that supports retention and acts as an insurance policy against future crises.
The challenge is to overcome an industry culture that focuses on the past more than the future and tends to work behind the scenes rather than draw attention to itself. Insurers have a compelling story to tell. If they open up and start promoting themselves and the industry, they’ll put themselves in a strong position for growth, led and supported by intelligent and capable people.
Interested to know more about the success of combinig principles of business agility and diversity, equity and inclusion in the insurance and reinsurance industry? Feel free to check out our latest whitepaper.
Senior Manager, People and Organisation, PwC Switzerland
Tel: +41 58 792 98 27
Senior Associate, Insurance Transformation, PwC Switzerland
Tel: +41 58 792 49 92