Buying life insurance can be a long, uncomfortable process for consumers. Northwestern Mutual, a 166-year-old company, decided to change the paradigm by building an automated, efficient, and clear solution. In this episode of the McKinsey on Insurance podcast, Eli Larrea, a senior partner in McKinsey’s Boston office, sat down with Nichole Lecher, Northwestern Mutual’s vice president of client experience, strategy and journeys. They discuss the purpose of this transformation, the hurdles along the way, and what they learned from the experience. The following transcript has been edited for clarity.
Eli Larrea: How are you changing policy underwriting and the broader enrollment experience for customers to build a new standard for life insurance?
Nichole Lecher: Buying financial products can be difficult and time-consuming. And life insurance is a product that clients typically don’t want to think about because it addresses fears of mortality and the uncomfortable thoughts associated with leaving loved ones behind. When a client is taking this critical step to buy insurance and plan for their financial future, the last thing we want to do is meet them with a cumbersome, invasive process that creates more anxiety. Our vision is to relieve anxiety by creating a leading client experience for all our product purchases and shift the paradigm of risk selection. We’re redefining how clients experience life insurance by reimagining the journey of buying insurance.
Eli Larrea: What aspects of the current process make it so arduous for customers?
Nichole Lecher: If you’ve purchased insurance recently, you most often must work with an advisor, complete paperwork, schedule a medical exam, and provide fluids and then wait for days or weeks for an approval. Oftentimes, additional information is requested. Every time an insurer requests more from a client, it causes them to question if they still want the product or to continue the process. That is what we want to avoid. We want people to be confident in addressing their financial needs, and we want to make it simple and easy for them.
Eli Larrea: How did you bring this vision to life?
Nichole Lecher: Establishing a clear direction of where we wanted to go, setting aspirational goals, creating a sense of urgency, securing enterprise prioritization, and gaining support from our senior executive leadership team were all critical to mobilizing the organization with a common objective and sense of purpose. It was an enterprise-wide effort, with teams from nearly every function working together. Identifying the right talent and establishing the right structure and cadence to bring all these parties together was instrumental to move at scale and to keep all the teams in sync as they problem solved.
Eli Larrea: What did senior leaders do differently to support the teams?
Nichole Lecher: This was a top-down-driven initiative, and our CEO and key members of his team were actively engaged with us as we problem solved and helped quickly clear any roadblocks or hurdles.
This project also required a mindset shift from all leaders. It required all functional and department leaders to work outside of their day-to-day responsibilities to collaborate and problem solve for the enterprise. Senior-leader role modeling was critical, and it helped the teams to naturally break down any barriers that they encountered in their day-to-day operations. We saw a mindset shift to, “It’s not my project; it’s our project. Let’s lean in and solve this for the good of our client.”
Our vision is to relieve anxiety by creating a leading client experience for all our product purchases and shift the paradigm of risk selection.
Eli Larrea: What were the biggest barriers, and how did you overcome them?
Nichole Lecher: There were many barriers, as many industry players would anticipate, especially in established organizations like ours. First, the technology environment was incredibly complex, and navigating an end-to-end digital transformation seamlessly while continuing to operate as usual every day was very challenging. Additionally, speed was a critical part of the initiative, and we needed to overcome underlying cultural mindsets. This was a highly complex problem, and it required our teams to work and think differently.
Eli Larrea: How did you make sure you had the right talent in place with the right skills?
Nichole Lecher: Traditionally, our teams have made decisions through consensus, but we didn’t have time for that. This initiative required us to break the work into smaller, integrated teams that owned the solutions and made decisions at a faster pace. Trusting and empowering these teams was critical. While it was uncomfortable at first, it was amazing to watch the teams build confidence and drive outcomes.
We also knew that we were internally focused: our teams tended to operate in silos and were aligned to capabilities or product lines. For this project, our teams needed to collaborate cross-functionally and keep the client at the center of every discussion, which changed how we made decisions, solved problems, and worked together. They had to learn to be comfortable with ambiguity; progress was more important than perfection.
Last, we had talent and skill set needs. We had teams at different levels of proficiency, working in a scaled, agile model, which created the need for role clarity. We had to improve the quality of our deliverables because we were working across many different product and technology teams. So we offered just-in-time training to bring the various teams to an equivalent operating model.
Eli Larrea: Was technology a barrier?
Nichole Lecher: We needed greater technology coordination. The complexity of this project and the ecosystem of the people, processes, and technology involved required us to develop robust project management. Every change had to be carefully orchestrated, sequenced, tested, and validated to ensure that when we rolled the product out, our people were informed of the changes and were well equipped to support it, our technology was working seamlessly, and all these pieces moved together simultaneously.
Eli Larrea: At what point did you realize all this work was paying off?
Nichole Lecher: The first moment was when we watched our first case go through the end-to-end, straight-through processing experience. It was a weekend deployment late at night. There were about 100 of us anxiously waiting and watching as the case cleared every step in the process. When the case went through, it was so encouraging because our aspirational goal to have a significant volume of business automated, end-to-end, became a reality.
The second moment was during our nationwide launch. We had a new functionality that we were testing, and we needed more time to pilot to understand if the capability would work. Instead of the original 12-week nationwide rollout, we were forced into a two-week, big-bang rollout so we could scale the capability into our entire distribution across the country. The teams did an outstanding job. The rollout was virtually flawless, and it gave us the foundation to scale capabilities and achieve our target by the end of the year.
Eli Larrea: What did you learn as a leader?
Nichole Lecher: To deliver a transformation at this scale, we had to be willing to shift our mindsets to make sure we weren’t holding our teams back. The right team composition is also critical. We had a talented, diverse team that brought their best thinking and respected and challenged each other every day. Finally, it’s OK to be vulnerable as a leader and admit that we don’t have all the answers. Leaning on your team, colleagues, and partners builds resiliency to drive forward.
Eli Larrea: What advice would you give other leaders who are going through a similar transformational journey?
Nichole Lecher: First, it’s important to focus on what your clients need from you. Don’t let your internal processes or institutional guardrails be barriers to your innovation and transformation. Second, be clear with your objectives, empower your teams, and create an environment of psychological safety to inspire the creative problem solving needed to drive your transformation. Third, leadership matters in these moments. The engagement and support of our senior executive team were critical to this transformation and the sustainability of this new way of working.
Eli Larrea: What advice would you give other woman leaders in the insurance industry?
Nichole Lecher: Be confident in the unique strengths that you bring to the table. It takes diverse perspectives and experiences to solve the most complex challenges and find the best solutions. For a long time, I suppressed my own voice because I was afraid my ideas were too different from those of my peers. But I realized how powerful it is to listen to the various perspectives around the table. While the voices may be different, those perspectives are critical for us to solve problems based on the needs of our clients and where we need to be in the future.