It’s all about the hustle, baby.

Over the past year we’ve been seeing examples of digital transformation taking place in our industry, whether it’s a new take on products and services or simply increased activity from private equity firms intent on disruption. 

When you really think about the need to shift to digital, the reasons aren’t always clear, the paths aren’t well understood and the risks seem high.

It seems to me the proximate cause driving the critical importance of evolution in our industry is the enormous gap between our highest value to the insured and the main source of agency revenue. Clearly our role in the management of client risk is that of a navigator; a trusted advisor steering the insured toward their goals. Conversely our main revenue source is commission, based on the placement of insurance. I can assure you the way your firm binds a policy or processes an endorsement adds no inherent value to the client over the way your competitors do it. The real value comes from your colleagues’ depth of expertise, knowledge of the individual risk, their reputation with individual underwriters and how hard they push. In other words, it’s all about the hustle, baby.

So how do we approach technology today? Agency technology always follows the money and as such it is completely mired in the processing of insurance placements (the low-value commodity stuff). It’s time to change this. If you focus your tools on helping your colleagues generate better insight, your technology won’t follow the money—it will generate the money. Your clients will become untouchable to your competitors. You will outmaneuver and outperform everyone in every metric from organic growth to revenue per employee.

This path takes a serious commitment, but it doesn’t have to be overwhelming. The digital transformation must become a cultural transformation—it won’t work any other way. McKinsey research shows some companies expect digital initiatives to deliver annual growth and cost efficiencies of 5%-10% or more in the next three to five years. Ambitious, yes, and few see that kind of growth. What it comes down to is a new way of thinking, and it all starts at the top. Any significant digital change in an organization requires unprecedented coordination of people, processes and technologies. It’s no secret that adapting over time is essential to corporate success.

Similarly, Standard & Poor’s data show that companies that have successfully transitioned to become high-performing digital enterprises are able to orchestrate six building blocks: strategy and innovation, the customer decision journey, process automation, organization, technology, and data and analytics. S&P found while not every building block has to be developed to the same degree, it is important to stick to the framework to survive.

In this issue we’ll touch on a few areas that align with your top priorities: generating new business and retaining clients. Just keep in mind we’re providing only a taste. You can’t just buy this reality off the shelf. Remember— digital strategy is intrinsic to business strategy, but it’s leadership that drives the culture.