Business Challenge

New senior management of this major life and pensions were concerned that the historic performance of the business had been unsatisfactory and in the light of the increasing competitive, distribution and regular treat challenges facing it, a more fundamental consideration of the potential of the business needed to be undertaken.

What WDScott did to help

This case required a comprehensive business redesign - from the outside in - of the short and medium term changes driving the economics of the industry.

WDScott lead a significant internal team of approximately twenty people for a period of twelve weeks. The internal team was extremely talented - WDScott brought its experience from other geographies and utilised its ‘seven step strategic design method’ and its proprietary best practices process architecture to assist the team in taking a fresh look at what was possible both in the short and longer term. The analysis was undertaken by approaching improved value potential from several different perspectives including improving current performance, re-engineering the business and investing a new technology and reinventing the business based on new insights relating to emerging consumer preferences, regulation and the reinvention of distribution.

Implementation - The approach to implementation was condition based, that is, some changes could be made quickly as they were within the control of the organisation. These included the re-engineering of servicing process and the outsourcing of others, including technology. Others would take longer as they involved external parties including the intermediated distribution channel which was eventually separated from manufacturing. Still others were conditional on certain conditions being achieved, e.g. consumer acceptance, government legislation, infrastructure being in place or its cost reducing to a specified level.

Outcomes - The outcomes have been simplified using three key value indicators - Revenue, Cost and Risk. The nature of the changes have been classified in three groups. These are process, which includes changes to management, marketing core operational and support. Changes to structure which include internal changes, insourcing / outsourcing and changes to the supply and distribution chain. Technology changes relate to applications, networks and systems. The unit costs are projected to reduce by 40%, revenue to increase by 65% and risk to reduce by 35%. Risk is calculated by identifying the events that would invalidate the assumptions, assessing their probabilities and assigning impacts. The collective impact is a 100% improvement in the Future Risk Adjusted Relative Cash Returns of the business - that is its value potential.