On my ShiftShapers podcast I get to interview a wide range of people who are taking the huge shifts in our industry and shaping them into new products, technology, business practice models, communication pathways and more.
It is a source of constant fascination that some listeners seem to gravitate toward the technology interviews, while others find the technique conversations more compelling. Of course, there is overlap, and that is why we bring in subject matter experts from all disciplines.
But a recent Wall Street Journal article by Irving Wladawsky-Berger (CIO Journal, Nov. 2, 2018) ran the headline “It’s All About Business Model Innovation, not New Technology” brought me back to thinking about those two listener groups.
As my friends will tell you, I am a technology geek. I love all the new stuff that gives us insights into claims data, helps with determining and aiding the non-compliant member, makes quoting partially self-funded plans from a time-consuming chore into a 30-minute easy task, etc. etc. etc. We have interviewed all of those shift shapers – and more.
Yet we ended our new 2018 episodes with a two-part interview with John Sbrocco, a former professional poker player turned insurance advisor from New Jersey who is as tech-savvy as they come, but who is laser-focused on shaking up the moribund techniques of the benefits advisory business model. Although this issue is dedicated to technology, and although I love all things tech, to make serious changes in our industry, I agree with John.
Many advisors use technology the way a drunk uses a lamppost – more for support than for illumination.
Many advisors use technology the way a drunk uses a lamppost – more for support than for illumination. The difference is a question of reforming versus transforming. In his 2006 book, “The Art of Transformation”, former Speaker of the House Newt Gingrich brings the difference into focus: “Reform is a process of improving and existing system. Transformation is a method of visualizing a new system, culture, process, and structure and migrating the current system to the new.”
He continues, “Reform involves much less change and is much less difficult. Transformation is by definition a journey into a new and different system, with new and different rules and principles. America has reached that moment in time.” Indeed.
In short, to be successful in the present, the successful advisor – especially those in the mid-large group markets – must reevaluate their entire business model. Conceptually, this is a transformation strategy that reaches all industries – not just insurance, though as an industry we don’t often tend to be in the forefront of innovation.
In his new book, “Reinvent Your Business Model,” Mark Johnson points out that it is first and foremost about a customer value proposition. Our customers have changed. Off-the-shelf fully insured products are no longer the go-to in the mid-large marketplace. Advisors like John are reinventing their customer value proposition.
Once that is crystalized, according to Johnson, and you learn how to tell that story, you can move on to the other three legs of the table: a profit formula that lays out how the business makes money delivering that value proposition; and the key resources and key processes needed to deliver that proposition.”
Johnson is deliberate in his hierarchy. Resources and technology are not the goal of the transformational process; they are a tool that helps the successful advisor illuminate the key differentiators of their customer value proposition.
Gingrich posits that, “Large scale change requires transformation, not reform. Rather than change, most bureaucracies prefer the comfortable routine of explaining failure.”
If that sounds even slightly familiar, it is time to rethink how you can transform your practice.
David Saltzman is the Director of Marketing and Business Development for Borislow Insurance. He also hosts the highly acclaimed weekly “ShiftShapers” podcast, featuring industry thought leaders and trendsetters. He is a former president of NAHU and a 35+ year veteran of the insurance industry.