Other parts of this series:
- Zero-based planning readies insurers for an uncertain future
- Zero-based approach helps insurers drive up digital returns
- Insurers need new performance metrics for digital transformation
- Zero-based mindset helps insurers up workforce performance
- Three key steps for insurers aspiring to be zero-based organizations
Business leaders need to let go of past biases and simplify their organization's structures, systems, processes and goals.
Traditional modes of business planning are often so entrenched that it’s difficult for an organization’s leadership to change course. Attempts to introduce new approaches are frequently limited to discrete parts of the business where their impact is curtailed. Alternatively, they’re rooted in the past performance of the organization and fail to adequately prepare it for the challenges of the future.
Zero-based business planning offers insurers, and companies from other industries, the opportunity to completely transform themselves so that they can quickly seize new opportunities and create additional value. As I mentioned in an earlier blog post, it allows organizations to plan from a clean sheet and allocate resources where they will be most effective. It empowers key personnel to focus on their core objectives, increase their effectiveness and enhance their contribution to the business.
A successful zero-based approach requires the organization’s leaders to change how they think, plan and act. They must begin each planning phase from a zero base, let go of past biases and simplify the organization’s structures, systems, processes and goals.
Three fundamental steps are essential:
Know what you want to be: Establish the goals of the organization and if necessary revise the business strategy. If the strategy’s wrong, the business planning process is not going to work. It’s important to align the strategy to what’s happening in the market, not what has happened, and to ensure that it can quickly adapt to further change
Design from the outside: As much as 70 percent of the time consumed by companies’ processes isn’t directly related to generating value. To overcome this waste, organizations should review their processes from the standpoints of the users of their internal services as well as their customers. A “customer-first” mindset, using design thinking, simplifies customer experiences and shifts talent to work that creates value.
Build it so they come: Jettisoning unnecessary assets, standardizing and automating systems and processes, and reassigning and reskilling workers gives organizations more opportunities to develop the capabilities and competencies that drive growth. Furthermore, a zero-based mindset allows business leaders to better orchestrate the ecosystems that deliver potentially lucrative products and services. Improvements can be achieved at the touchpoints with ecosystem partners as well as within the organization.
For further information about zero-based business planning and the transformation challenges facing insurers, have a look at these links.