Building a Stronger Mutual Insurer:
The Power of Tailored Team Cultures

Imagine a hockey team. You wouldn’t expect the centre to play the same role as the goaltender. Each position – defence, wing, centre and goaltender – requires different skills, strategies, and approaches. They even require people with unique natural abilities and sometimes even body shapes. Goalies may need a larger body size and reach to maximize net coverage. They also need flexibility and explosive lateral movement. On the other hand, forwards, other than ‘enforcers,’ ideally have lean physiques for speed and agility, with dynamic skating and puck-handling skills. Although these individuals will play different roles, they must work as a team – in carefully synchronized ways – to succeed.

Source: Microsoft

Similarly, in every organization (including mutual insurance companies), each work unit has a unique function and needs a distinct “culture” (or, in this case, “subculture”) to thrive. However, they must work as a team for the organization to succeed. Adopting this approach does not create chaos. Instead, it helps optimize performance by aligning how teams work with the objectives they need to achieve.

The Pitfalls of a “One-Size-Fits-All” Approach

Many organizations assume that a singular culture is the key to unity and efficiency. However, maintaining this mindset, even in smaller mutual insurance companies, can lead to stagnation and internal conflict. When the organization forces every work unit to operate under the same pre-defined rules and expectations, regardless of their specific goals, you risk stifling innovation, hindering adaptability, and spawning inefficiencies.

Source: Microsoft

Think about it: an underwriting team should be fairly meticulous and focused on applying specific guidelines. In contrast, a distribution team should likely be more agile – pushing to grow the business. Forcing both teams to adhere to rigid processes can hinder the sales distribution team’s ability to close and place new business. Likewise, making the underwriting team overly focused on achieving sales goals will significantly increase the propensity for unwanted risk profiles.

Differentiating on Effectiveness

The Culture Factor advises leaders on the importance of determining the culture of different units. Effectiveness is the first of six culture dimensions which define organizational culture. On a scale of 1 to 100, this dimension examines how various organizational units will define and pursue success. It ranges from a “means-oriented” approach (0 – 45) to a “goal-oriented” approach (55-100).

A means-oriented culture prioritizes adherence to processes, stability, and quality. Means-oriented teams focus on following established procedures, ensuring consistency, and minimizing errors. Think of it as a well-oiled machine where safety, precision and reliability are paramount – the type of culture you would expect a nuclear power plant’s Reactor Maintenance Department to exhibit.

While being means-oriented seems admirable, there is a note of warning. Being extremely means-oriented could lead to dysfunctional departmental behaviour! Extremely means-oriented teams might start using “following the process” as an excuse for loafing around and getting nothing done. They might also build complex bureaucratic bottlenecks if left unchecked or without appropriate direction.

A goal-oriented culture, on the other hand, emphasizes results, adaptability, and risk-taking. Teams in this culture are driven by achieving targets, embracing change, and finding innovative solutions. They are more flexible and willing to take calculated risks to achieve their objectives. They are also happy to bend the rules (or break them) if there are no dire consequences.

As one can imagine, not every functional unit can afford to be highly goal-oriented. Some units – through their professional ethos or regulatory confines – cannot afford to bend the rules, for instance.

Effectiveness Should Vary Across Functions

Mutual insurance companies have a unique mandate: prioritizing policyholder interests over short-term profits. This mandate requires a nuanced approach to culture, where different functions align effectiveness with their specific roles.

Let’s compare three typical mutual insurance functions – underwriting, sales/distribution (agents and brokers) and claims. Underwriting teams need a means-oriented culture, focusing on stability to protect the company and its policyholders. Their recommended score on the 0-100 effectiveness scale would be lower, leaning towards the “means-oriented” side. On the other hand, insurance agents and brokers need a more goal-oriented culture to drive revenue growth and expand the policyholder base. Their recommended score would be higher, leaning towards the “goal-oriented” side.

The claims teams, focused on providing support and resolving issues, benefit from a more balanced approach, leaning slightly towards goal-oriented to ensure responsiveness and flexibility.

To optimize effectiveness in mutual insurance companies or any other type of organization, we recommend the following:

By tailoring cultures to each function mutuals can improve efficiency and productivity, increase innovation and boost policyholder satisfaction. They can also increase employee engagement and help achieve more sustainable growth.

Conclusion

Building organizational effectiveness demands significant effort and dedication. Few organizations achieve this goal. Roughly 70% of organizations struggle to achieve their desired culture, often due to a lack of necessary knowledge and tools.

Leaders aiming to improve their overall culture or specific functional units will likely benefit from expert guidance. A trusted expert’s unbiased insights can help a mutual insurer see how their organizational culture and teams’ subcultures can and should strategically differ. Embracing this will help them unlock their full potential.

The Culture Factor Canada, in partnership with ENGAGE HR™, is helping Canadian Mutuals achieve this culture alignment. You can visit The Culture Factor Canada or contact the authors to learn more.

Alex Gallacher _{MBA, CHRE, ICD.D} is the Managing Director of ENGAGE HR™.

Dr. Okey Okere _{MBA, DBA, CIoD} is an Associated Consultant with ENGAGE HR™ and Vice-President of The Culture Factor Canada.

ENGAGE HR™ is a proud CAMIC Affiliate Member.