In recent months, Donald Guloien has hammered in the same message: “the status quo is no longer an option.” It first surfaced in Manulife Financial’s annual report, he repeated it at the annual shareholder meeting and in the announcements of results for first quarter 2015 on May 7. He echoed this refrain at Manulife’s Investor Day on May 11. In Manulife’s 2014 annual report, Guloien states that the board of directors has approved the “boldest, most forward-thinking strategy” that the insurer has ever conceived. “This new strategy will set the course for attaining our vision of helping people with their big financial decisions. The world is changing rapidly. Major trends and disruptors, including technology, threaten to make our industry and our Company less and less relevant unless we take deliberate measures,” the report says.
Over the next four years, Manulife plans to invest heavily in its strategy in order to realize its vision, and put the company in a “highly competitive” position in 2018 and beyond. “Our customer is better educated and gaining control. We are seeing profound changes in how the increasingly educated and empowered customer researches and buys products. Anyone with access to the Internet can tap into a huge amount of information to gain expertise in almost any field,” Guloien points out.
“Major trends and disrupters threaten to make our industry and our Company less relevant. Unless we take bold and deliberate measures.”
– Donald Guloien
This is why Manulife needs to prepare for an environment where it can meet the needs of smart and savvy consumers who can discover online what products and services they need and the price they should pay, Guloien continues. “In addition, established online companies and new start-ups are raising expectations on what the online customer experience could be. Our customers’ profiles are changing and ‘money in motion’ is creating opportunities. At the same time, we cannot forget the global growth of millennials who are early adopters of technology and demonstrate a distinct set of needs and preferences. We need to build a better understanding of this population’s preferences going forward,” Guloien says.
Engaging customers directly
Social media and other forms of technology have redefined the pace at which news and trends are shared with customers around the world, Guloien adds. “These platforms create new ways of engaging directly with our customers. Technology is enabling and disrupting industries. As these platforms grow in influence, disruptive technologies are opening new ways to provide our customers with a more seamless end-to-end experience, he explains.
Apps, mobile advancements and digital tools are enabling us to more simply and effectively meet customers’ needs, Guloien adds. “At the same time, technology has the potential to disrupt our industry. We are seeing the emergence of online platforms that could change the modality of advice. Therefore, we must embrace technological change and invest in specific areas that will enhance the customer experience,” he says.
This evolution is also fuelling a reshaping of the competitive landscape. “Our traditional competitors are also enhancing their focus on the customer. In some cases, we are seeing competitors shift from competing on price to competing on customer experience. Non-traditional players have the potential to redefine the competitive environment should they decide to enter our industry,” he continues.
Another transformational driver is the fact that customers are yearning for simplicity. “Financial services products can be complex and daunting. We have an opportunity to simplify our offerings, and relate them more to our customers’ aspirations and goals. All of these changes create a significant opportunity for us. Now, more than ever, differentiation matters in our business. For all these reasons, it is imperative that we embrace change and do this better and faster than our competitors. The status quo is no longer an option,” Guloien underlines.
Become a disrupting element
At the annual shareholder meeting, Gulioen went a step further. He emphasized that he wants his company to be a disrupter, and by doing that, continue its rapid rate of growth well beyond 2016. “Major trends and disrupters threaten to make our industry and our Company less relevant. Unless we take bold and deliberate measures,” Guloien says.
He gave the example of customers’ walking into a doctor’s office fully educated on their medical situation, and alternative forms of treatments. Clients are also sharing knowledge of the best restaurants and hotels.
“Technology is enabling and disrupting industries. Look at Uber, for example, and what it has done to the taxicab and limo business, or the ability to take a photo of a cheque to make a deposit online, rather than go to the bank. Apps, mobile and digital tools are enabling market leaders to more simply and effectively meet customer needs,” he says.
Returning to customers’ quest for simplicity, he confirms that it is already within reach. Examples include one-click from Amazon, an Apple TV remote with only a few buttons, and a summary of fitness activities that people can view at-a-glance on their iPhone.
We know that financial service products can be complex and daunting. We have an opportunity to simplify our offerings, and relate them more directly to our customers’ needs and aspirations,” Guloien says.
He adds that Manulife’s future competitors will not be insurers or mutual fund companies, but rather Google, Alibaba, Facebook or Amazon.
“For those who lead, all of these changes create significant opportunity. Differentiation matters! Low differentiation – where you can’t tell the difference between name brands and generics – promotes commoditization and delivers low returns. High differentiation delivers high returns. Our industry has tended to provide undifferentiated offerings. But through innovation and customer-centricity, we have the opportunity to join the differentiated players. The status quo is no longer an option.”