Transformation to a Customer-centric Organization
Our client, one of the largest life and annuity companies in the United States, had experienced rapid growth in variable products over the last decade. The company had built its market reputation on product innovation and had established their organizational focus on product management. Along with the challenges of a maturing annuities marketplace and changes in the national economy, the company was hearing increased dissatisfaction from its producers and business partners.
Focusing on the Customer
Following a strategic review of the company, management decided that their current organizational focus on products must change, and their focus must be to become more customer-centric. They launched a series of marketing, sales, technology and operations initiatives to begin the transformation. However, senior management was concerned that the basic organizational structure of the company was no longer appropriate and a different structure would be required for them to become truly customer-centric.
The client engaged the Robert E. Nolan Company to assist them with understanding the organizational implications of their desired transformation. Nolan consultants first met with company management to obtain background information and to define and agree upon the project approach. They reviewed the new strategy plan and conducted one-on-one interviews with key stakeholders. Next, Nolan consultants worked with the teams to develop high-level process descriptions to identify shifts in process steps, accountabilities and decision making. Next they analyzed the results to identify impacts on the organizational structure. They identified a series of alternative structures to discuss with the management team, including marketing, product management, sales and operations.
Keys to Success
Several factors are required to successfully align an organization, including:<
- Clear, shared and understood objectives and metrics, roles and responsibilities, and accountabilities;
- The right people in the right jobs;
- Processes that are measured and managed for performance from the outside-in;
- Critical competencies must be sustained; and,
- Organizational structures that are supportive.
The general conclusions based on the interviews, process design and analyses had two main themes:
- Organizational structure does not solve process or competency problems. Success comes from fixing broken or poorly designed and inconsistent processes. Success also requires competent and adequately trained staff.
- Organizational structure combines resources efficiently around important causes and provides a focus for achieving critical objectives and goals. Functionally oriented resources make sense because this structure provides for maintaining functional excellence, critical mass, and the ability to balance staffing, all which are keys to achieving a customer-centric focus.
Results and Impact
The principle project recommendations were to align and organize company resources based upon the dominant responsibilities of the resource, and the extent to which accountabilities should be across customers rather than products.
Nolan also recommended that markets (consumers/contract holders), products, and producers/firms (customers) deserve dedicated resources that will act in a checks-and-balances fashion. They will be corporate truth-tellers with respect to competitive position, performance, and emerging strategic needs and opportunities.
Lastly, it was recommended they modify the process by which the company makes decisions to fund strategic investments across markets, products, and distribution channels.