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

The Internet of Things: Helping Insurers Make Better-Informed Decisions about Risk

The IoT is a major game changer for the insurance industry, and will likely affect every part of the insurance value chain. After all, insurance is data-driven, and that’s exactly what the IoT can deliver—relevant, actionable, real-time data that can provide an accurate picture of what is being—or may be—insured.

Coordinate Coverages to Manage Social Media Exposures

The bottom line is that no one policy will cover all the exposures in the social media realm.

Software-Defined Everything

What does it take to virtualize all the key components in your data center?

Competing with the Coasts for Tech Talent

Are heartland-based insurers at a recruiting disadvantage for tech skills?

On Thanking the Regulator … Really

The Financial Conduct Authority is demanding higher standards of consumer protection from insurers, which could lead to greater customer engagement and understanding.

Boosting Performance with Integrated Underwriting Tools

A unified, comprehensive platform can help underwriters perform their jobs more efficiently — and profitably.

Advertisement

Advertisement