As you read this, companies are being formed to compete with you in each and every area of your company, completely dissecting your value chain and what used to be your core competences. If you don’t realize this, you – and your company – will soon be in trouble

We’re currently experiencing great changes in the way companies are structured, fueled by new ways of doing new business and much improved ways of doing existing business. We’ve entered the era of true collaboration. What used to be a firm’s core competences, for example a unique production value chain, are simply evaporating now – there’s an emerging trend of specialization so even the most unique parts of your value chain can be delivered faster, better and cheaper by competitors

So where does this leave us? The company of tomorrow will look much different than it does today as we in the future must refocus on what we’re doing and even more important how we’re doing it. With companies all around capable of performing better than you, you will need to rethink your business model. The traditional model of producing all products – or delivering all aspects of service – in-house is gone. Now and tomorrow, you should focus on the ecosystem of your business and not the assets that you own

Your future core competences will be your ability of identifying and assembling a string of products, services, competences and processes from various partners and present this as a holistic solution to your customers – the future is all about collaborating so you will have to find the right partners to support you in delivering true value to your customers

So where does this leave you now? You still have a business to run today while focusing on creating the business of tomorrow which means that you will be running on two turbines

Turbine #1 – current operations

You cannot create your future if you do not have the funds to pay for it, so you must make sure that your current business operations are running smooth and efficiently. This is Turbine #1, your current operations, which should of course continue to run with a focus on cost and process optimization

It’s important for me to underline that I expect Turbine #1 to be on a run-off and I suggest you take on that mindset too, so focus will be on relentless business optimization and cash generation to support the creation of Turbine #2

Turbine #2 – the future of your company

Your new ecosystem. Creating the future state of your company requires a new strategy, of course. When preparing for the strategy, remember that if you compare yourself to the business you’re in today, i.e. the usual competition and usual markets, you will not be able to create what’s required for the future. Your future business setup will most likely not be based on your current industry and current competitors, but more likely be a mix of your current industry combined with new business models and opportunities

Look outside your industry. Find near- and far-field business areas to your current business and understand how bringing in these competences, services and processes will help you shape the future of your company’s ecosystem. You should stop thinking about your company as a unit and start seeing it as a string of deliverables across a new value chain, owned by many partners, each having a distinct value to offer and a clear way of making money for themselves – and you

The new insurance value chain

Look at retail insurance, for example. Personal insurance products are today based on what’s been around for decades and pricing as well as competitiveness is based on the insurers’ abilities to manage claims costs and internal processes. Granted, we’re seeing products like usage-based insurance and internet of things are also finding its way into the traditional insurance offerings

But it’s nothing really new. To me, these are new ways of introducing claims control and product granularity, but nothing new. The products are the same, as are the way they are sold, delivered and serviced

But let’s look at near- and far-field areas to insurance. A near-field to insurance is other financial services, and there’s much insurance can learn and use from the financial services industry. One of the things is relevance. The banks and credit card companies have traditionally been good at being relevant for their customers, creating a closer relationship with them and hence improving loyalty

To survive in the retail insurance going forwards, you have to think of ways of making personal insurance relevant to your customers – if not, you can be certain that another insurer will – and with products being more or less identical, the company being most relevant will win

A far-field to insurance is the entertainment industry and I’m explicitly mentioning this industry as all consumer trends are gravitating towards retailers offering products and shopping experiences as entertainment. Customers wants to be entertained and they want shopping (and other) experiences to be fun and engaging. It’s not even enough providing a relevant product, it also has to be fun and engaging at the same time

You might think it makes little sense to offer insurance products in fun and engaging ways but the fact is, if you’re not doing it, someone will use exactly this as differentiator to sell their products over yours. My point is hopefully obvious; regardless of what your belief of your current industry is and what you expect to happen tomorrow, expect it to happen faster and far more radical – and prepare for this

In the case of insurance, I know the traditional way of thinking is not to rock the boat too much with excuses of tight regulations and an industry built on seriousness etc. Well. Customers want experiences and entertainment regardless of industry, and if you don’t react to this, someone else will

 

#readyfortomorrow #frederikbisbjerg #insurtech #digitaltransformation #businessdevelopment #valuechain #bisbjerg #valuechains #businesstransformation

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