Strategic choices for the future

Alm. Brand and Implement Strategy

4 April 2018

During 2016, top management put focus on the future of Alm. Brand. While the turbulence in the financial markets naturally increases the need for agility and adaptability, it stood to reason that the organisation should have a long-term perspective and that the basic assumptions needed to be challenged, debated and tested.

Alm. Brand needed to define the future.

The financial sector is caught in the perfect storm. Tightened regulatory requirements, critical and engaged customers, increased transparency as a result of price comparison portals and digitalisation in all parts of the value chain are just some of the factors that create turbulence in the sector. Add to this the abundance of digital startups that attack existing business models from several directions.

In the midst of the storm, one of the sector’s established players comes across as something special. In contrast to the other players in the financial sector, Alm. Brand has an integrated business model and a broad group structure with activities in the business areas of insurance, banking, investment, leasing and life and pension.

Strategic choices in a turbulent sector

Having fended off the challenges posed by the financial crisis, Alm. Brand was at a crossroads in 2016. In addition to having recovered from the financial crisis, Alm. Brand had, over a number of years, focused on increasing customer satisfaction through initiatives across all three business areas of the group. Their Customer First strategy had produced satisfactory results, but there were also a lot of unanswered questions about the future strategic direction.

Despite the wide range of financial services, it became clear that the challenge of realising potential commercial synergies across insurance, banking and pension had only been addressed to some extent. Innovation was a key theme, and a focus on attracting and retaining customers was required to avoid getting knocked off course in the perfect storm.

During 2016, top management put focus on the future of Alm. Brand. While the turbulence in the financial markets naturally increases the need for agility and adaptability, it stood to reason that the organisation should have a long-term perspective and that the basic assumptions needed to be challenged, debated and tested. Alm. Brand needed to define the future.

The strategy work started with evaluating the previous strategy period and the group’s current situation. All managers in the organisation were involved, and subsequently it became clear that the implementation had been very convincing. A clear picture emerged of an organisation with a very strong execution power and a top management capable of decisive action.

From key trends to specific strategic challenges

The retrospective evaluation was supplemented by identifying the key driving forces and trends which potentially could affect the group across context, customers, competition and own competences. A variety of trends were identified and assessed in order to create clarity about the significance and the opportunities it gave.

The studies went from considerations about a sharing economy and new sustainable business models to digitalisation opportunities to new behavioural patterns among the customers. All of which were issues that Alm. Brand had to address. What effect would these trends have on each of the three business areas – and on the group as a whole?

Based on this foundation, top management and the expanded management team chose to zoom in on four strategic challenges that needed to be clarified.

Four different strategies – prototypes and test

All members of the extended management team worked intensely on challenging each other and developing alternative solutions within the four focus areas. In order to challenge the thinking, a solution space was designed with four widely different but realistic strategic directions which Alm. Brand could choose to follow to address the key challenges. The directions went from price-focused to strongly technology-driven to holistic thinking. The directions represented not only real strategic opportunities but also the different perspectives internally in the group on the best way forward.

For top management, it was key that all opportunities were presented and evaluated through an open process in which the management team was given the opportunity to examine a number of possible future scenarios. As part of the open and challenging process, it was decided to consolidate the four directions to the two alternative strategic directions which showed the most promise.

For each strategic direction, critical assumptions were identified, and top management decided where there was a need for validating the most impactful and uncertain and risk-related assumptions. Furthermore, it was decided to carry out a major qualitative and quantitative customer study, since one of the assumptions was that there could be identified an attractive customer segment with very specific characteristics and behaviour.

The analyses also led to the deselection of one of the strategic directions. The test of the critical assumptions showed that what had seemed as an attractive direction could not pass the testing of critical details.

Creating a whole new customer experience

Based on the analysis results, the extended management team was now able to concentrate on identifying the strategic focus areas to focus on to realise the chosen strategic direction. Throughout the process, the managers were the ones who drove the work, supported by the strategy team. Not the other way around. This was a key choice made by top management which meant that the managers who were to execute the strategy were part of the design work from the beginning. The ownership was anchored. It wasn’t necessary to “sell” it to the management team after it was developed. They had created it themselves.

In parallel with the identification of specific initiatives, the management team wanted to become even more specific on how the Alm. Brand of the future should work, feel and look like. Therefore, the management team identified six key customer journeys which were mapped and revised based on the new strategic direction. Visual prototypes were designed which helped elaborate on the strategy and clarify key discussion questions in the process.

The strategy was launched at the beginning of 2017 where the management team once again was invited. Over several days, the strategy and the future customer experience were presented, discussed and put into play for all the managers. And the transformation that Alm. Brand is now going through was subsequently initiated across the entire organisation.

Alm. Brand for the customer

In a time when the storm is raging in the financial sector, the obvious choice is to take refuge in short-term solutions, minor adjustments with a low risk and a strategic approach to innovation that is not closely coupled to the core. In contrast, Alm. Brand chose to defy the trend and seize the opportunity to create a unique position in the Danish market. The easy choice would have been to continue to focus on top-of-the-line customer service and limit the group’s role to being an administrator of the business units. Alm. Brand didn’t make that choice.

Alm. Brand for the Customer defines the group’s ambitious strategy for the period until 2022. The overall goal is to create a whole new experience for the group’s customers. This will enable Alm. Brand to take care of the full range of the customers’ financial needs across business areas, to be proactive in their advisory service offerings and to offer their customers top-of-the-line solutions tailored specifically to their individual needs and situation. The goal is to be able to serve customers wherever and whenever they need it and to give them an overall view of all of their business, providing advice and solutions either through their personal Alm. Brand adviser or through a strong offering of digital self-service options.

Alm. Brand’s intention is to continue its work with increasing customer satisfaction to be able to match global market leaders in the financial sector. The aim is to maintain the already high employee satisfaction rate – even with the major changes the employees will be facing over the course of the strategy period. As to customers, the goal is to significantly increase the number of multiple-service customers, i.e. customers doing business with more than one of Alm. Brand’s business areas. And at the same time, the group aims to grow its business in the course of the strategy period in an otherwise extremely competitive market.

While top management and the management team were deeply involved in creating a clear strategic direction for the future in large parts of 2016, CEO Søren Boe Mortensen announced in the annual report for 2016 that the organisation is ready to deliver. The result for 2016 surpassed all expectations, the group’s activities going forward are in a very positive development, and the number of customers is increasing.

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