The 10 Key Elements of an Innovation Plan
Regardless of where you stand in the marketplace, innovation is top-of-mind for every insurer these days. Competition is fierce, and failing to innovate can make all the difference, especially when it comes to sustainable growth. Because of this, it’s important for CIOs and their teams to understand the importance of culture, process and structure to delivering successful innovation.
To this end, Novarica recently issued a report, “IT Planning for Innovation: a CIO Checklist” that identifies a a checklist of 10 elements to help insurers create a business model that can both deliver results and be sustainable within a specific company. Click through to view each of these elements.
Insurance CIOs can shed new light on issues by examining them as either consumers or agents will, Novarica says. This can expose uneven service patterns, incomprehensible business rules or incomplete use of solutions to create a standardized experience for the carrier. These external views can also help a carrier benchmark itself against key competitors and refine investment portfolios. This can be vitally important when prioritizing potential initiatives that are competing for funding. Too often carriers have an insulated mindset. Future competition likely will come from outside the industry and, perhaps, outside of the market.
A discussion of where a company wants to go, including what businesses it wants to be in and a framing of how it wants to compete, is helpful in framing a good roadmap for teams to follow, Novarica says. Senior executives can dramatically improve the chances of success and engagement if they provide clear parameters for what is in and out of bounds. There's little point in sending teams off to explore opportunities inconsistent with corporate strategies or investment appetites, and few things demotivate teams faster than the summary dismissal of an extended period of work based on limiting factors that were simply left unstated.
It’s critical that senior executives demonstrate their support for change initiatives — not just in the short term, but over a protracted period — Novarica says, confirming that “change” is itself a new normal. Sustained, thoughtful and closed-loop communications programs can provide an important foundational element for enabling change. Additionally, senior leaders should consider the adverse impact sudden changes in direction or defunding of initiatives can have on highly engaged and motivated teams believing they have been positioned to achieve significant impact.
Cross-functional teams are an ideal way to build appropriate levels of engagement across organizations while encouraging appropriate levels of cross-pollination, Novarica says. Cross-functional teams can pull together the various functions driving insurance operations and product development and look at problems in new and more complete ways. This enables deeper and faster exploration of solutions that may have been lost in the organizational noise of traditional structures.
One of the intents of innovation activities is to produce list of ideas to consider for future implementation, according to Novarica. Brainstorming and other techniques for gathering ideas can be effective at creating an inventory. However, once created, a prioritization mechanism must to exist for ideas to further research and assess as candidates for implementation. These processes and supporting tools provide for a two-way form of communication when implemented correctly. They not only allow individual team members to contribute ideas, but also provide a mechanism for collaboration to extend or refine initial concepts. This creates an organizational learning model, ensuring teams continue to focus on activities consistent with longer-term strategic objectives.
Innovation isn’t something carriers can achieve simply by announcing that it is time to innovate. Carriers must create a structure for managing the effort that not only moves initiatives forward, Novarica says, but also ensures organizations learn the proper behavior when driving for results. Creating a model that not only celebrates the wins, but also clarifies what are deemed to be losses, is important for helping teams learn how they can best contribute.
In a recent study with insurer CIOs who had come from comparable banking positions, Novarica found that one of the challenges the respondents noted with insurance innovation was that their employees typically had far less breadth and depth of business knowledge than their banking employees. Given this background, it’s not surprising that there will be some ramp-up time to get teams operational. The benefits will be reflected in both higher-quality work and faster cycle times.
While creating a new organizational structure to focus on innovation can be both exciting and present an opportunity for employees to contribute to new and different ways, managers should plan for long-term staff acquisition and replacement from the outset of an initiative, Novarica says. By doing this from the start, they can establish processes and tools to onboard new staff members and make them productive as early as possible. By building tools and processes anticipating changes in staffing over time, and recognizing the periodic need to refresh organizational capability early in an effort, managers and executives can ensure that these initiatives concurrently maintain progress and focus.
It’s important for carriers to manage their teams’ energy in a way that ensures people stay committed to a longer-term outcome rather than focusing only on quick hits, Novarica warns. Highly motivated teams with high morale can produce remarkable results, but adverse results or organizational roadblocks that aren’t understood can quickly demotivate teams such as this. Communication across teams, including active listening by managers and executives, can help alleviate these risks.
While innovation teams may be focused on the here and now, Novarica warns that executive sponsors should be thinking about the future in order to ensure that changes have both impact and longevity. Working with team members to develop individual career path plans can make a significant difference in both the formation of teams and how results are ultimately executed.