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Special Report: What Other Industries Can Teach Carriers

Joe McKendrick February 2007

W.L. Gore & Associates is about as far removed from the financial services industry as any company can get. Newark, N.J.-based Gore, best known as the creator of the durable GORE-TEX fabric so popular in outdoor wear, is a manufacturer of consumer products, textiles, electronics, medical and healthcare products, sealants, and filtration. What can a company in the financial services sector learn from Gore?

Plenty, and that's why Wachovia Corp., Charlotte, N.C., hired the head of Gore's research and development team to bring analytical thinking to its own operations.

"W.L. Gore & Associates was very innovation-driven; and physically product focused," relates Dan Thorpe, senior vice president and statistics and modeling director of Wachovia's Customer Analysis Research and Targeting Group. "I worked with engineers and scientists around statistics and modeling. We modeled product lifetimes, we modeled employee engagements, we modeled experiments and we modeled performance."

Thorpe brought his familiarity with SAS analysis and reporting software over to Wachovia, to help the bank more rigorously measure customer loyalty and lifecycles. "Wachovia was looking for someone who was from outside the industry, to come in with a fresh set of eyes, and look at the way Wachovia handles customer data," he says. "They wanted someone who was doing things differently."

Thorpe's expertise and knowledge of software for product lifecycle analysis has helped Wachovia better understand its own customer lifecycles and preferences, and better target its marketing dollars to various segments.

COMMON GROUND IN MESSY DATA

While they are separate industries with different goals, manufacturing and financial services still face many of the same challenges when it comes to data management, Thorpe says. At Gore, Thorpe's mission was "to gain insights from messy data in manufacturing," he notes. "In financial services, you have a lot more data, but it's just as messy as in manufacturing or in R&D."

Thorpe's new engagement at Wachovia is not an isolated phenomenon—companies increasingly find there's value to be gained from solutions outside their own industries, says Kathleen Khirallah, research director for retail banking with TowerGroup, a Needham, Mass., research firm. "In the past five to ten years, solutions have become far more porous. Institutions are looking at solutions that have worked really well in other industries and adapting them to their industry."

The best practices of one industry—usually captured in software packages of one kind or another—can open up new avenues within another industry. Plus, many of the challenges that face the insurance industry-global competition, new demands from consumers, product commodization, industry consolidation and regulations—are the same as those reshaping other industries.

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