Governance: Not a One-Size-Fits-All
Insurance organizations are pursuing a variety of strategic initiatives—advanced analytics, digital insurance, core system replacement, customer experience, direct distribution, self-service, omni-channel, etc. One question that should arise early in each of these is, “What is the best governance model to ensure success?” Each of these types of initiatives has its own unique governance requirements. Additionally, each organization has its own spin on deploying that governance. What may be sound governance for a midsized regional specialty insurer may not fit a large national multi-line carrier.
Getting the right answer to the governance question is one of the most important factors affecting the success of strategic initiatives. In our work with clients, we see four keys to getting the governance question right.
1. Assess what you already have
Most organizations have several governance structures already in place. Some function better than others. Gain an understanding of each by profiling their current role, focus, activity, membership, and effectiveness.
2. Understand what you want to achieve with an initiative
Define the criteria for success for any strategic initiative. Is it about decision making on topics like resource allocation, planning, schedule, or scope? Is it about people, process, technology, or all three? Is it a culture shift? Is it a market expansion? Growth? Profitability? Expenses? Enterprise Risk? Define the success criteria and prioritize them.
3. Leverage existing governance where it fits; Create new only when absolutely necessary
Take the criteria you have developed for the new initiative and objectively compare them to the profiles you developed for the existing governance structures. Most significant change efforts will probably not be a perfect fit for a reason: in-place governance structures are often about managing an ongoing process more so than a change. Can a charter be changed so that an in-place structure can work? An in-place structure has merit in that it is established and working, even if it requires tweaking to handle the new challenge.
4. Start high
When in doubt, go high. It is far simpler to eventually reassign the initiative to a governance body farther down in the organization than it is to move it up when a lower one is not effective.
ReSource Pro can help you profile your existing governance functions, define governance criteria for a new initiative, and objectively identify the optimal governance structure. Visit our Carrier Consulting page to learn more.