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Constructive Conversations: Building customer-focused operations

Constructive Conversations: Building customer-focused operations

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To stay competitive in today’s global business economy, it requires a lot more than having the right corporate vision and strategy. It’s all about the execution. How do you get from where you are today to where you need to be? For many companies, it boils down to having the right Target Operating Model (TOM). What’s the blueprint for how you drive success? How do you transform established processes so that you can serve your clients better? How do you boost efficiencies?

Over the last 5 years, Justin Gress, Director of Strategic Operations, has lived and breathed TOM throughout the North America Construction business unit and across AXA XL. According to Justin, “Our target operating model has helped our team fuel growth, drive innovation and elevate our customer service through targeted initiatives.” Here’s how he makes it happen.

Let’s start with the basics. What’s a Target Operating Model? Why is it important?

Gress: A Target Operating Model (TOM) is the desired state of an organization. If you think of your current organization in terms of an “as is” state, TOM is the “to be” state. Target Operating Model can be done at various levels of the organization and at different levels of detail. It is all about people, process, and technology, starting with what is your strategy/value proposition and building a road map to guide you through the process. It’s important because it shows every colleague the ‘road’ for where you need to steer the business, what’s the optimized way of working, and most of all — how you’re going to get there.

How did you get started?

Our North America Construction unit began in 2010 and quickly had explosive year over year growth. While key talent was rapidly added — both in underwriting and operations — we realized that we had to build a more efficient model to handle the sheer amount of business that needed to be billed, processed, and responded to. We assembled a team of underwriting and operations folks and then developed basic process flows for each product. While this painstaking process took some time, understanding the current state was key before thinking about a future state. The thought was to start small, but think about the future. Goals were set to shift tasks done by underwriting or done inconsistently to our operations team. While this sounds simple, this process required significant training, staffing, and patience as the transition occurred. By going through this, Gary Kaplan and our leadership team realized that the target operating model had to be part of the annual strategy process and an investment of time and resources had to be made to make TOM a reality.

How does your Target Operating Model benefit your clients?

Through our TOM, we’ve embraced a culture of continuous improvement across the entire team. We look for new ways to deliver better customer service, streamline process and free up resources that can be put towards customer-centric projects. One example of this was our recent shift of certain underwriting tasks to our colleagues in India. We test piloted with a small team for our professional and pollution products. We developed detailed process flows and key tasks were identified to shift to our India team. We partnered closely with our Operational leaders and led significant training to make this a reality. TOM is still a building process several years in, but now over 80% of our back office efforts are done in our India office. This delivers a big time savings benefit — we now operate almost 24 hours a day servicing our customers and underwriters. In fact, over 95% of Policies and Endorsements are issued within 30 Days. We set a high goal and look to achieve it with every relationship.

Also, we’ve taken the key learnings from this pilot and applied them to our risk engineering administrative tasks. We’re now on our third year of transition and have increased the complexity of the work which has boosted efficiency and given valuable client-facing time back to our risk engineer team. It’s a win-win. Our risk engineers are spending more time with customers and they can be highly responsive for underwriting related inquiries. It all comes down to saving time and improving service.

 

" Continuous Improvement and TOM are mindsets that require you to keep moving forward and pushing for further efficiency and operating excellence."

 

It’s been 6 years. Are you ever done with TOM? What are some best practices you’ve learned?

No. You’re never really done because you need to keep looking for new ways to improve and refine your business operations. That being said, when you hit key milestones on the TOM, it’s important to celebrate your success. It’s also critical to continue to link your refined strategy to your TOM. This means identifying where you want to go next with TOM in a variety of ways. We’ve learned a lot over the years. Here are some best practices that I think can help any business — not just construction insurance!

  1. Hold an annual TOM review process with your team. Our North America Construction Team has built this into its Leadership, Planning, and Execution Model. Each year in Q4, we take time to review our “current state” and chart out where we want to go next.
  2. Listen to customer feedback. We call it “Voice of the Customer.” Whether via a survey, asking open ended questions when you speak to them, or by reviewing correspondence/feedback received in day-to-day communications, listen to feedback. Linking these efforts back to your TOM is an effective way to identify and drive change.
  3. Complete a Competitor Analysis: This will help your team determine why you may feel a competitor is ahead of you regarding a certain attribute. Spend time thinking about what you can do to improve and move ahead of the competition.
  4. Develop a Continuous Improvement Mindset: What if you’re not getting negative feedback and your team feels you are well-positioned? It is okay to take a pause, but do not stop the asking and thinking for ways to improve. Continuous Improvement and TOM are mindsets that require you to keep moving forward and pushing for further efficiency and operating excellence.
    What’s next for Construction’s Target Operating Model?

We’re continuing to hold annual TOM review sessions. With several years of identifying, analyzing, implementing, and driving TOM efforts, we’re focused more on experimentation with lifting and shifting significant tasks and finding a more cost effective way of completing them. We’ve taken the approach to identify three or four big ticket items annually to focus on analyzing and determining what the future state could be.

At the same time, we continue to review operational process flows for small gains. The best ideas come from our front line — those underwriting the accounts, processing the endorsement, or handling the risk engineering needs of our clients. Looking ahead, we’re continuing to identify InsurTech partners that help improve our Target Operating Model even further. We’re also aligning our Risk Engineering and Claims functions for the next set of TOM initiatives. It’s a great feeling to see TOM embraced across our organization and to see how it fuels our customer-focused business.



Justin Gress is director of strategic operations for AXA XL’s North America Construction business. Have a new Target Operating Model at your company? What’s driving continuous improvement at your organization? Justin would love to hear about it. Send him your thoughts at justin.gress@axaxl.com






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