Page 37 - Insurance Times December 2019

countries, all with unique regulatory environments,
customer expectations, and cultural values.

What should you do?

The suggested approach to manage complex situation is to
restructure, and to bring on or develop specialists, and
build up resources adequate to address the complexity.

Ambiguous
In an ambiguous situation the causal relationship is
completely unclear. There are no precedents that exist, and
one faces 'unknown' unknowns. For example, an insurance
company moves into rural segment not entered earlier or
launch health insurance products such as wellness package The key questions that you ask related to the major actors
outside its core competencies. (customers, company and competitor) are as under:
Y What value does the customer seek?
What should you do? Y What value does the customer perceive in company's
In such kind of a situation, the approach that is suggested offering? and,
is to do experiments. The experiments are carried out to Y What value does the customer perceive in competitor
quickly understand the cause and effect relationships. offering?
Hypothesis should be generated and tested on the
phenomenon that is being faced. The experiments should As there are three circle that overlap each other, there are
be designed in such a way that lessons learned can be seven different areas that gets demarcated i.e., A, B, C, D,
broadly applied. E, F & G. Each area depicts a very interesting space (se
Exhibit 6).
In addition, to the above guide there are few other
management tools like the 'three circle model' that can Exhibit 6: The 3 Circle Model: Key Sections
help manage the VUCA world.
Section Description
The 3 Circle model A Company's unique selling propositions (USPs)

This model is a very simple tool (see Exhibit 5) that can be B Industry Standards
used by insurance executives to thing strategically about C Cost of doing business
their company, their competitors and the customer value D Competitor's USPs
in a VUCA world.
E White space
Exhibit 5: The 3 Circle Model F & G Value not realised

What executives should do is that
they should try to list down at least
three points against each of the
seven area. For example -
Y The three USPs of the
company health insurance product
offerings
Y Three industry standards that
needs to be followed (e.g., quality
of network hospital, complaint
redressal, etc.)
Y Three factors that are associated
Source: Author's own creation with cost of doing business in the health insurance

The Insurance Times, December 2019 37