Consultants' Corner

3 Keys to Creating an Innovation Culture

Ed Fenwick
Insurance Experts' Forum, May 26, 2011

At a recent retirement party for an old friend who was a senior executive of a large insurance company, he made some interesting points worth sharing:

• He had the good luck early in his career of being in the right place at the right time with the right people. As a result, he learned more about the business and industry than most of his peers did in their entire careers.

• He climbed higher and faster in his organization because he could start applying what he learned sooner to solve problems and see new opportunities.

• He confessed that he wasn’t really sure that he had learned anything new in his last 15 years—he just got really good at applying earlier lessons to different situations.

Now, here is the point that made the crowd put down their drinks and really start listening. He said, “That doesn’t work anymore,” adding, “It won’t work for individuals or organizations in the economic environment we are now in.” He went on to explain:

Truly innovative thinking will be a desired state for the next five or 10 years, and this will be a significant characteristic of surviving firms.

Learning and applying will still need to happen, but more and more, the challenges insurance companies face will require a fresh look, a curious mind and the ability to think. Companies will need to come up with breakthrough innovations in service, distribution and products.

If my retired friend is right, how does an organization go about embedding innovative thinking into its culture and processes?

While approaches will vary based on each organization’s unique people, processes and technologies, they all should share several important characteristics:

1. Learn to identify impactful candidates (e.g., agent retention or policy persistency) for innovative thinking. The candidates can often be found where you repeatedly hear a phrase like, “It’s a problem, but there’s nothing we can do about it.” There may be issues like persistency, business being rolled to other carriers, expenses and so on.

2. Get the right person to lead an effort to create an innovative solution. This person needs knowledge of your industry and business model, as well as experience helping a group find innovative solutions.

3. Select a group of three or four people, task them with responsibility for the issue, and charge them with creating an innovative solution.

That may seem like an oversimplified plan of action, but it covers the major points that are required for success. In these times, insurance companies face several difficult challenges that have no precedent, ranging from expense management to successful growth strategies to survival. As my old friend said about applying things learned over the past 30 years to today’s challenges, “That doesn’t work anymore.”

 

Ed Fenwick is SVP for The Robert E. Nolan Co., a management consulting firm specializing in the insurance industry.

Readers are encouraged to respond to Ed using the “Add Your Comments” box below.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Driving Growth Through Distribution Management

In the current hyper-competitive marketplace, many carriers are focusing on improving their distribution practices as a key technique for driving growth.

The Start of a New Era: Digital Retailers and Insurance

Insurers from all around the world are making great efforts to become digital.

Google and Insurance: One Year Later

Google is getting the approval for selling insurance on their compare site in a large number of states via a number of different insurance partners.

How IT Managers Can Get Close to Policyholders

Four steps CIOs need to take to lead insurance organizations to greater “customer obsession.”

Strategic Initiatives for 2015: Making Sense of the Shifts

Insurers must choose between embracing innovation or just continuing with business as usual and run the risk of becoming a casualty in the new competitive battle.

To Stay in the Game, Insurers Must Aggressively Embrace New Consumer Technologies

Emerging technologies displayed at the CES could be some of the greatest change agents since the introduction of the Internet, offering breakthroughs that could challenge many businesses.