Digital Change at Aviva PDF

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Management Report

MG210 - Understanding Change in Organisations

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Word Count - 3797

Executive Summary The main aim of this report is to analyse digital change happening within Aviva plc with respect to managerial theories of change. The creation of applications for staff allow them to engage with the workplace even when they are not at work, allowing many to deal with the workload. Additionally, MyAviva (the customer application) has made maintaining, changing and adding

policies a lot easier for customers as less steps are involved. ‘Digital Garages’ have also been introduced to create a relaxed working atmosphere and encourage innovation.

There are many key issues that can arise when implementing change such as ensuring all employees understand the change and how it will affect them. This can be shown through the Change Kaleidoscope as lower level employees have a say through the Change Action Teams. The scope of the change implemented involves how the change is communicated which is key; group discussions were used throughout different teams and departments. Kotter's 8 Step Model is used when implementing change and Aviva have developed their vision as well as all employees are aware of the change taking place.

The change will also affect many different stakeholders such as employees and customers. The staff application has changed the way employees communicate among themselves and with the organisation. MyAviva can allow customers to access and contact Aviva 24 hours every day. The culture within Aviva has changed as the traditional working environment has been replaced with a more flexible workplace allowing increased efficiency.

The digital change within Aviva has benefited both the employees and customers. However, there will be resistance from some and the change is basic compared to other industries. From the analysis, recommendations can be made such as creating group check-in’s between managers and subordinates. As well as briefings on the advantages of digitalisation to encourage usage. This digitalisation should also be pushed further to be on par with other industries. Throughout the change process Aviva’s reliance was placed on the Kotter’s 8 step model however, other models can be utilized to ensure the change is implemented effectively.

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Table of Contents Executive Summary............................................................................................................................1 Introduction.......................................................................................................................................3 Main Body..........................................................................................................................................4 Digital Change within Aviva.................................................................................................................4 Key Issues in Making Change Successful..............................................................................................7 Communicating the Scope of Change................................................................................................10 Stakeholder Perception......................................................................................................................12 Culture...............................................................................................................................................14 Conclusion and Recommendations...................................................................................................16 References........................................................................................................................................18 Appendices.......................................................................................................................................23 Appendix 1.........................................................................................................................................23 Appendix 2.........................................................................................................................................23 Appendix 3.........................................................................................................................................24

Introduction Change management can be described as a planned change of a company’s current operation; in response to new challenges and opportunities (Bhatt, 2017). Aviva plc is one of the UK’s biggest insurance company, with their headquarters set up in London, currently employing roughly 16,000 people in the UK (BBC News, 2018). In recent years, Aviva has begun to evolve with a massive digital change occurring. Aviva aims to revolutionise the insurance industry, resulting in vast changes to Aviva’s operations. Mark Wilson (CEO) stated “we want to turn Aviva into a fintech” (Business Insider, 2017). This transformation into a financial technology purveyor

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is an evolutionary development (Appendix 1) within Aviva, being formed through the staged development of digital technology within the organisation. These changes are evolving to the needs and wants of customers in this digital age as demands to become digital are increasing. More than £100 million has been spend on the internal digital transformation; proving the drastic need for change on their outdated systems. Aviva have introduced these digital changes to improve efficiency and allow greater staff satisfaction as jobs are becoming easier through the updated technology. The Digital Garage was created to steer away from corporate thinking and breaking down barriers (Deloitte, 2016). It was extremely important for these changes to be implemented well, ensuring they would benefit the workforce. Communicating change in Aviva was key in implementation being successful, as without effective communication employees become unmotivated and anxious about large technological changes. When looking at digital transformation, it is also important to understand different stakeholders perceptions and how the changes will affect them. As well as the culture within Aviva and how it has been impacted by digital change.

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Main Body Digital Change within Aviva The first step within Aviva meeting their goal of transforming into a “Fintech” purveyor was placing a larger focus on implementing vast digital change within the organisation, in both internal and external operations (Stewart and Watson, 2018). The driving force behind this method of organisational change is the recognition that digital advancement is a key factor behind creating competitive advantage and differentiation within the insurance industry, that is lagging behind various other financial service providers (Johnston, 2018).

Aviva powers its technological innovation through the introduction of a “Digital Garage”, a designated area on the outskirts of London for digital advancements within Aviva. This has created a new, relaxed culture to aid the creation and implementation of digital advancement (Stewart and Watson, 2018). It is a base for all digital projects, and where the new employee application will be developed, as well as where MyAviva was created (Simpson, 2018).

For senior management, as well as Aviva’s general employees, the Digital Garage encompasses promising opportunities for all. Moreover, the Digital Garage allows ideas that are put forward by staff across the country in regards to changes the company could make relating to their customer experiences to become a reality (Stewart, 2018). The Digital Garage fosters innovation and inquisitive thinking amongst staff through its induction of a more relaxed culture (Herbig and Dunphy, 1998). Thus, this change satisfying Lyytinen and Newman's (2008) punctuated socio-technical change model’s need for a strong culture within the organization's environment for successful implementation of technological change.

Within Aviva’s plan to revolutionise the insurance industry they have created various partnerships with technological startups, through the use of the Digital Garage. These partnerships include start-ups such as “Fitwell” a mobile app that monitors users health and wellbeing while offering advice and a virtual coach, along with Shepard, technology developed to monitor and predict when machinery requires maintenance (Spicer, 2018). It is clear from the

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partnerships here Aviva have begun to develop technology to vastly change the future of insurance and how it is bought, sold and quoted, in line with industry predictions (PA Consulting Group, 2018).

Aviva looks to create a true customer composite through the introduction of financial technology (Johnston, 2018). Aviva began the transformation by introducing a customer orientated digitisation of their processes, primarily through the introduction of the MyAviva app, revolutionizing the way insurance was bought and sold throughout Aviva, allowing customers access to their policies 24/7 with little interaction with Aviva’s customer facing employees.

However, in terms of Aviva’s transformation into a financial technology organisation, the digitisation of processes can only be seen as common practice in respect to the “Fintech” industry. Digitisation was a step within the early evolution of financial technology, with many industries having adopted this approach years before Aviva (Puschmann, 2017), with clear examples being seen within mobile and online banking applications. This proves that the digitalisation is hardly groundbreaking, they are in fact lagging compared to other industries. They are keeping up with digitalisation from consumer demand.

Digitisation has also taken hold in Aviva's internal operations, with the creation of a staff app. This has been created with the view of improving internal communications and enhancing internal processes such as booking holidays. Internal communication had been identified as inefficient and a hindrance to growth and change within Aviva previously, with the email predominantly being the main form of communication (Cunningham, 2018).

The introduction of digital staff communications is a move towards streamlining operations and cutting complexity within the organisation, in line with numerous other organisations. Albeit, it is important that it does not become the sole form of communication within the organisation as Galliers (1992) identifies that no single form of communication is universally applicable and

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therefore a mixture of face to face and digital communication should be utilized within the organisation to keep satisfaction high and communication effective.

Digital communications effectiveness is limited through staffs determination to use them. Dafoe (2015) has identified that technological determinism is increased when there is a belief that the technology will have a positive and lasting effect upon the user. It is therefore imperative that Aviva ensure that staff are aware of the value held within the application to ensure its effective implementation.

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Key Issues in Making Change Successful For change to be successful it must be adopted and taken on board by all members of the organisation. When implementing change, the change agents must understand the role they are performing to be effective such as common ground, meaning, interests and behavior (Iveroth, 2011). This must be maintained throughout the change process. This can be challenging to achieve especially in digital change as job loss is inevitable, moreover, demotivating staff. Therefore, there will always be doubt about implementation. Some change will benefit employees such as the staff app which will allow ease in booking holidays and potentially working from home helping parents or careers in particular. Improved software and technology will allow for work to be easier and more efficient.

Aviva have worked well to ensure the change itself and how the change is implemented is catered to employee’s needs. For example, when new underwriter software (Guidewire) was being put in place, employees wanted change to occur as the software was outdated and was unable to be updated (Cooper and Cross, 2018). When implementing the software Aviva used written manual guides instead of videos as a user guide, as this is what the underwriters prefer. This shows they are catering to employee needs and transformational change is occurring.

However, older members of the organisation may be resistant to change as they are uncomfortable with using technology and may have technological anxiety. Therefore, change communication and training is key in allowing staff to become confident with the new technology (Frahm & Brown, 2007). Also one of Aviva’s main slogans ‘kill complexity’ shows how the previous over complication has been replaced with easy to understand changes (Cooper and Cross, 2018). Proving once more the transformational change taking place as it is been considered thoroughly and implemented in stages.

The Change Kaleidoscope (developed by Hailey and Balogun (2002)) (Appendix 2) can be utilised to show the key issues on making change successful. As in terms of readiness, some are positive about the implementation of change. The change will affect every member of the organisation

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however, the effects will be varying. Top management must be onboard with the change for it to be implemented successfully as their attitudes may rub off on subordinates especially middle managers as they have direct contact with lower level employees. If managers are resistant to change employees may follow, resulting in low efficiency in the workplace. Aviva have taken the time to implement the change effectively and in stages so that everyone is onboard and understands the change. Although this can be a long process it will encourage employees to use the technology.

However, a lot of digital change has occurred in recent years, proving that continuous change is occurring as they are “those that are ongoing, evolving and cumulative . . . small uninterrupted adjustments . . . ” (Pettigrew et al., 2001, p. 704). These changes will continue to take place as technology is constantly evolving. The change start point is top down as it was the CEO and top level management who decided that a change was needed. However, bottom up change can be said to take place as managers are ensuring employees are happy with the change and that they are participating within the change.

Aviva empowered their employees to take part in the digital change through Change Action Teams in their different locations, these could be referred to as Change Champions (Greer, 1995). These teams were made up from staff at different levels and a variety of departments. Denis (2001) proposes that the introduction of a group led teams, with participants working together for a common goal is a key stage in achieving change. This allows various employees to have their say, resulting in a variety of ideas being created. This was the employees sole focus for many weeks allowing them to fulfil their roles. This meant that employees felt like they were involved in the process and therefore were more likely to support it, agreeing with La Framboise et al (2002), that staff feedback is essential and employees need to see how their comments are valued. This feedback is most inclusive and sustainable in the long term as it creates a strong line of communication (Storper, 2004). Employees are more likely to accept change if they are taking part in it; proven in Smith et al’s (2005) study. This also meant that the change only occurred in one location, Perth, and was therefore representative of the staff in this location

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only meaning that the change was specialised. Furthermore, collaboration was involved as employees took part in implementing the change.

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Communicating the Scope of Change Scope of change can be thought about in two ways, first the change taking place and secondly the way it is communicated. Communication is key for successful organisational change (Wardle, 2011), as it results in reduced uncertainty within the organisation (Kotter, 1996). The communication must be two way to ensure all employees understand the change taking place or it will fail (Smith, 2006). Aviva realised the importance of this before was implemented and group discussions with employees of different levels in the organization took place. Using a post-it note system employees could add suggestions of changes they would like to see in the company. This change varied from new office space to more variety in the canteen; senior managers compiled a list of all these changes and prioritised them as to which one would have the most positive effective for their staff (Stewart, 2018).

Aviva are leading change in their sector by quite a considerable amount through a combination of effective management decisions and employee empowerment. Firstly, Aviva must move from a traditional communication approach to an alternative approach allowing employees to be drivers of change (Frahm and Brown, 2007). Aviva’s transformational change, is how the changes affect the way employees view their identity and roles within the company (Henderson, 2002). Transformational change cannot happen quickly therefore small incremental changes were made regularly with the transformational change goal in mind.

Kotter used the 8 Step Model to lead change in an organization, every organization implements the 8 steps differently, enhancing it in areas specific to them. Referring to Appendix 3 displaying the 8 steps it is clear to see Aviva showed most focus towards Step 3: Develop the Vision, Step 4: Communication for Buy in and Step 5: Empower Action. The main advantage of the Kotter model is its inclusivity with employees, placing emphasis on the importance of them for change to happen. Step 3 is particularly important as a clearly defined vision is easier for employees to understand and act on (Kotter, 1996). Its simplicity means Aviva employees can easily understand the change taking place without too much confusion. However, senior managers can build on this simple model by maintaining a variety of innovation efforts and continuingly

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making incremental changes and small improvements in existing products, by doing so it will help the company flourish over the long run; creating greater value for customers (Tushman, 1996).

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Stakeholder Perception Aviva Employees Due to the digital change occurring within Aviva, several significant stakeholders are being affected, each in a varying way. Both, senior management and general employees are two of the stakeholders that are affected within the company itself due to the implementation of an application for staff use, the digital garage and the additional application, MyAviva, aimed at customers.

Particularly, the application for staff use, aimed at leaders who are developing themselves for the future of Aviva, is an important aspect of the digital change that affects employees within the company and the way they interact with one another and the firm itself. The employee application is very similar to that of the application Facebook, but the platform is only for the use of Aviva staff and encompasses many different sections and groups, for example; Aviva in the News, Everyone at Aviva and Social (Workplace: Employee Application, 2018).

A new application is also in the development stages for employee use, this will allow staff to access information which would previously have been only available from within the office. Staff can access multiple aspects which each benefit the employees greatly, including the ability to view shifts and input holidays (Stewart, 2018). The benefit of this aspect of the application is the notices it gives employees in regards to th...