We are entering one of my favorite times of year. The weather is warming, the days are getting longer, and other signs of Mother Nature waking from her winter slumber are all around. In sports, there is the excitement of basketball brackets, the new hope that comes with Opening Day of the baseball season, and the colorful splendor of Augusta National places the beauty of springtime on full display.
In our industry we have been experiencing our own changing of the seasons. Whether we want it or not, whether we like it or not, and whether we are ready or not, independent distribution is being affected by the digital disruption all around us. As you read this article, well-capitalized organizations with innovative and gifted people are working to create new markets and develop new value networks. Now more than ever carriers, legacy distributors, and traditional product designs are vulnerable to disruptors having an impact on the existing value proposition that we have successfully utilized the past few decades. The days of simply acknowledging that disruption looms on the horizon are drawing to a close, and it is now a time for action.
The disruption phenomenon is affecting those of us on the company side, and challenging us all to “disrupt” ourselves as companies and as leaders. While we must continue on the long-standing value proposition that has built our successes over the last several years, simultaneously we must prepare for the “digital disruption” taking place all around us. At Legal & General, we are adapting to the changing dynamics in several different ways. We are quickly working to digitize our operations, making tough decisions in prioritizing varying initiatives across all business units, and addressing the universal challenge of navigating legacy IT systems which require significant capital and resources to improve upon. Additionally, we are investing in foundational capabilities for BGA distribution, like technology and analytics, and engaging in “hackathon” type discussions with our BGAs and internal teams to get closer to what the customer really wants and needs. In essence, we are building out our “digital DNA” by evolving our culture, upgrading our talent, and adopting agile operating models. These are but a few of the ways by which we are proactively “disrupting” our own conventional thinking.
As we move into the promise of springtime, why not make 2019 the year you look for ways to positively “disrupt” your own way of thinking and doing business?
Everyone has heard that if you place a frog in a pan of boiling water it will immediately jump to safety, yet that same frog placed in a pan of cool water slowly brought to a boil will not notice the change in its environment until it is too late. The lesson as it applies to our industry is that “disruption” usually doesn’t hurt quickly enough to force us early enough to make the adjustments needed to survive and thrive inside of a new paradigm. None of us knows exactly how hot the water in the pan is right at this moment, but we do know the temperature is slowly rising. If we are to win in the future we must act now.
I have such respect for our BGA distribution. BGAs have built, developed, and grown successful and thriving businesses with some agencies spanning multiple generations. The entrepreneurial spirit and business acumen of BGAs will be great assets in this changing landscape. That said, the winners of tomorrow will be the agencies willing to challenge their existing business models and current processes.
So how is it that we will turn this challenge into an opportunity? First and foremost we’ve got to move toward—and embrace—the disruption. Maybe this is the year, as a BGA, to flex your technology and adopt the various digital solutions offered by your carrier partners. Maybe this is the year you look to add mobile applications and utilize cloud technology and open-sourced models. Maybe this is the year you get more involved with the new leadership at NAILBA, or attend a “FinTech” conference. These are ideal venues for collaboration and picking up new ideas or identifying new trends. Maybe this is the year you even go so far as to hire someone from the outside to observe your business and suggest practical ways you can disrupt your “status quo” and help the team you lead embrace a change mindset.
Another way to turn the disruption challenge into an opportunity is to find new ways to create value for your customers. Do you know specifically what it is that you provide that drives value to your customers? What is your overall value proposition and when did you last review it? Is this the year you really focus on identifying the customers and segments where you can create more value relative to your competitors? When did you last do this in a meaningful way? These are some simple, yet effective, ways to kick start the process of “disrupting” yourself and your business.
Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.” There is a truth in the statement as it applies to our landscape today. I believe I speak for many of us when I say that often we are so busy focused on creating “faster horses” that we fail to take the time to reflect and question some of our basic assumptions. Does a four-day improvement in cycle time really drive brand new customers to our products? Does continuing to lower the price on protection products drive the woefully underinsured middle market to our offerings? Is it a correct assumption that if, as carriers and BGAs, we began mandating the adoption of e-solutions that our businesses would suffer? Are we so busy as carriers and distributors worrying about a competitor getting a “faster horse” that we leave ourselves open to an outsider showing up with a Model T and changing the game altogether? How often are we challenging the long-standing assumptions we hold as industry insiders?
As “digital disruption” continues to transform our industry through the advent of artificial intelligence, further automation, big data, and predictive analytics, the need for disciplined and experienced leadership to make sense of it all will increase. In my view this may be the place where current BGAs are uniquely qualified to lead the transformation. Those who take notice of the disruption and quickly embrace some new logic will be well positioned moving forward. Why not make this the year to work purposefully with your peers and study groups to challenge your current business model and see what you could “disrupt” in your current structure. Is this the year to challenge existing silos in your businesses and change the “we’ve always done it that way” kind of thinking that is a hindrance to “disruptive” thinking?
Bill Gates once said, in his book The Road Ahead, that, “We always overestimate the change that will occur in the next two years, and we underestimate the change that will occur in the next 10.” If we accept that statement as true, then we know that placing our heads in the sand and focusing only on building “faster horses” will leave us all “disrupted” sometime over the next 10 years.
But for those who will embrace the change, start now, move deliberately, challenge the rules, and define a new way of working, there is the distinct opportunity to “disrupt” our industry from the inside.
Over the past 20 plus years working in BGA distribution, I have learned so much about innovation, creativity, determination, and persistence from the BGA principals, many of whom I’m honored to call my friends. The look and feel of BGA distribution is indeed changing, but I know that the entrepreneurial spirit and growth mindset that gave rise to the brokerage revolution many years ago will be the same entrepreneurial spirit that continues to find innovative ways to win in the new digital world.
Why not make 2019 the year that you decide to not be disrupted, but instead, become a disruptor!