Once upon a time, the insurance industry - along with many other institutions - lived in a place called Happy Land. But then something happened to disrupt Happy Land, and industry leaders were faced with tough choices in order to survive.
Peter Sheahan spun the tale of Happy Land to attendees at the LIMRA Distribution Conference as part of his keynote speech on turning challenge into opportunity.
Happy Land was protected by virtue of geography or barriers to entry, said Sheahan, best-selling author and founder of the Karrikins Group, a consulting firm.
But once Happy Land is disrupted by technology, regulations or new competitors, the "old" industry is sent into one of three directions in order to stay in business, Sheahan said. Those directions are volume, service or niche.
From those directions, there are two ways for a business to build value, he said. It must build value either through differentiation or price.
If these things are not done, Happy Land becomes the "land of the boiling frog," referring to the story of how a frog is boiled by gradually turning up the heat in the pot of water, Sheahan said.
Disruption can be positive if it viewed as a learning experience, he said. Industry leaders can learn by taking small, controlled risks. "The earlier you take them, the smaller they need to be," he said.
Opportunities can be found in disruption, Sheahan said, but industry leaders must remember to put humans in the center.
"The single biggest obstacle to transforming an organization in the face of disruption is getting other people to align with your strategy," he said.
"Everything is about people and taking them on the journey."
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com.
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