Thinking beyond the pandemic: Do you have the vision to succeed?
This may be an unsettling time, but it is also a period of opportunity for businesses to better plan for the future.
Many businesses have experience with crisis management, handling everything from natural disasters to cybersecurity breaches. But COVID-19 has presented a unique problem in its unprecedented impact and scale, with the property and casualty (P&C) insurance industry loss estimated somewhere between $40 billion to as high as $80 billion and the global economy predicted to shrink by more than 5% in 2020, with advanced economies expected to decline even more. A slow recovery will limit insurance companies’ revenue growth and lead to a fall in demand for products and services.
As a result, crisis management has become everyone‘s job, with all business leaders attempting to adapt — without playbooks, past references, or case studies they can apply directly to the current situation. They need help; they need vision. Which industry has the most experience dealing with risk in all shapes and sizes? The insurance industry. However, in the face of so much fear and confusion, even insurance business leaders are being pushed beyond their limits.
To move forward from the pandemic successfully, you will need a positive, clear vision. Development of this vision can help you not just to manage your own company but to strengthen your relationships with providers and clients as they struggle through the crisis. This may be an unsettling time, but it is also a period of opportunity for businesses to better plan for the future.
The three components of a strong future vision
The first part of your vision should outline how you are managing in the current situation. Put another way, it should list what actions the crisis demands on an immediate, short-term basis and how you are responding to those demands. The contraction of the economy means that commercial insurance policies with premiums based on sales and payroll, if they are purchased at all, will be smaller, meaning less revenue for brokers and agents. Insurance providers, too, are experiencing great changes. Some lines of business are much more profitable; far fewer auto accidents are happening on the empty streets. On the other hand, insurance companies with other lines of business are suffering due to the fall in demand.
Furthermore, pressure may be exerted on P&C companies to accept COVID-19 cases as workers’ compensation claims. Business interruption insurance is also under stress.
All these conditions will disrupt your firm’s 2020 plans, but the degree of disruption depends on your clients, your providers, and the lines of business you write. You will need to decide on your course of action, develop customized mitigation strategies on a national or global scale, and deal with your unique financial impact. The most important goals of this part of your vision are to stabilize, maintain interpersonal trust-based relationships with clients and others, and prevent additional issues. And as you chart a path toward recovery, you can help your clients chart theirs as well.
Next, your vision should focus on how you want your company to function after the crisis is over. This is an ideal time to look at all sections of your operations, search for redundancies, and consider new alternatives. Think about how you can transition from crisis mode in a way that feels natural, and don’t try to rush through steps. Although it’s essential to regain competitive footing and reassure customers and shareholders as soon as you can, setting a firm foundation that will last and keep you operating well beyond the recovery is much more important than quickly achieving temporary growth.
Lastly, your vision should look at preparation for future crises. This means identifying potential risks and opportunities, such as the shrinkage of certain lines of business and the expansion of others. Then you must articulate the strategies, capabilities, and tools your business needs to manage through the early, middle, and late stages of the potential risks you identified previously.
For the early stage of a crisis, you should create plans and mechanisms for emergency action as well as a model that might improve your response. For the middle stage, determine how you will collate and synthesize data to get insights and options, conduct risk analysis, and recommend courses of action with mitigation strategies. For the late stage, decide how you will ensure readiness to work from home, handle a return to the office for specific jobs or activities, monitor health and wellness, and coordinate multiple departments to manage the recovery and return to normalcy.
The importance of external perspective and conveying hope
Through all of this, it’s critical to have an external perspective and to evaluate dependencies outside your control. If any of your clients are travel companies, some of them may not recover — at least not to their pre-pandemic levels — and you may need to develop other markets. Define how you will need to work in both the current and post-pandemic situation and be realistic about how your resources and choices might change over time.
Additionally, keep in mind that although much of your vision involves mitigating risks, your plans should also encourage and convey hope! Especially during a crisis, such as the pandemic we are all facing, employees and clients look to how they are being treated by top leaders. Hope becomes even more important in crisis management as it is that stable sense of purpose and connection that prevents workers from feeling lost and desperate in the chaos. Continue to ask yourself how you can do good through your business, and don’t lose sight of the world you want to create through your company.
Success during and after this pandemic or any other crisis requires you to think seriously about how to take action at this moment to initiate recovery and growth while possibly facing additional threats. Resist the urge simply to copy what other leaders are doing, because you may be confronting a totally different set of circumstances, opportunities, and goals. But no matter what shape your vision ultimately might take, remember — don’t underestimate the enormous power it has to create a unified, motivated, and happy team and share this vision with your clients.
Priya Merchant (priya.merchant.writing@gmail.com) is a digital transformation and innovation expert with nearly two decades of experience in financial services and insurance. The views expressed here are the author’s own.
Related: