Jan 6, 2025

Successful Change Management in AI Adoption

With the promise of streamlined operations fueled by rapid enhancements in AI, insurance organizations have immense potential to revolutionize their processes. However, alongside this potential comes a significant challenge in successfully managing this transition. While often overlooked, change management is critical to ensure that AI adoption is successful.

McKinsey cites that 70% of large-scale business transformations fail. Yet recent research from Prosci shows that 47% of organizations that incorporate change management into their processes meet or exceed their project objectives.

Change management involves more than just the technical implementation of new tools. At its core, it focuses on the human element of transformation by guiding individuals, teams, and organizations to their desired future state. Poorly managed change can lead to resistance, reduced productivity, and initiative failure. With its strict regulatory environment and evolving technological advances, organizations in the insurance industry must respond and adapt to change quickly. However, they may encounter some challenges along the way. Here are the most common change management challenges and strategies to ensure these organizations adopt AI successfully.

Challenges of Change

Despite the potential benefits of technological implementations, organizations are frequently met with a myriad of challenges. One of the most significant challenges is employee resistance to change. Incorporating new technology, especially something as revolutionary as AI, can create fear and uncertainty among teams. In a 2023 Ernst & Young study, 75% of employees believe AI adoption will eliminate certain jobs. Employees may be hesitant to adopt new tools and processes, fearing their jobs may be displaced or their workloads increased.

Another common challenge is the lack of proper training and support. Without adequate training, employees may struggle to adapt to new systems and processes, which can lead to errors, inefficiencies, and frustration. Technical difficulties and compatibility issues can compound this frustration and disrupt operations.

Lack of leadership support can also significantly hinder the success of technology implementation projects. When leaders fail to actively support and promote change, employees may become confused, demotivated, or resistant. Without clear direction and support from leadership, project teams may struggle to secure necessary resources, overcome obstacles, and achieve project goals.

Strategies for Success

To overcome these challenges, insurance organizations should focus on the following strategies.

Leadership Buy-In

The first step in successful change management is strong leadership. Leaders must actively support the transformation, communicate its vision to the team, and secure the resources needed for success. Without visible and consistent involvement from the top executives, efforts to implement AI can lose momentum.

Leaders are also largely responsible for creating a company’s culture and setting a positive example for the organization. According to a 2016 KPMG study, almost a third of executives view their company’s existing culture as a blocker to change facilitation. Leaders must demonstrate the behaviors they wish to see to foster a culture of growth and transformation.

Clear Communication

Clear communication also plays a vital role. Employees and stakeholders need to understand the reasons behind the shift, the benefits it will bring, and how it will unfold. Organizations should encourage two-way communication so employees affected by the change have the opportunity to provide feedback. In turn, leadership can answer questions or address any concerns. Transparency amongst the team builds trust and alleviates concerns early on, paving the way for smoother transitions.

Team Involvement

Involving employees throughout the process is another cornerstone of effective change management. By seeking their input and empowering them to contribute to the initiative, organizations can foster a sense of ownership and commitment. Organizations should also identify employees on the team who influence and motivate their peers to be “change champions.” These champions can facilitate adoption by providing support and addressing challenges on the ground.

Phased Implementation

Taking a phased approach to implementation can help organizations manage the impact of change. By breaking down the transition into smaller, manageable steps, teams can adjust gradually while maintaining operational stability. Regular monitoring and evaluation of processes allow for adjustments based on feedback, ensuring continuous improvement and alignment with operational goals.

Comprehensive training is equally important to ensure that teams have the skills and knowledge needed to use the new technology confidently.

Picking a Partner

Choosing an AI partner is a critical decision that can determine the success or failure of an initiative. Insurance organizations must prioritize partners with deep domain expertise who understand the unique challenges of the industry. Additionally, a proven track record of delivering successful AI implementations will provide an extra layer of confidence. An ideal partner will guide your organization through transitions, fostering resilience in the face of innovation.

Change can be disruptive, but with a structured approach, it becomes an opportunity for growth. At IntellectAI, we pride ourselves on having Prosci Certified Change Management Practitioners who specialize in preparing organizations for the successful implementation of our AI-powered technology. By leveraging Prosci’s PCT (Prosci Change Triangle) and ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement) models, we ensure the changes are managed holistically, minimizing disruption to employees and customers alike. Contact us today to learn more about our solutions and how we can successfully manage this change within your organization.

Author:

Cara Carlone, CPCU, API, AINS
Solutions Consultant