I’m guessing that somewhere in your strategy documentation will be an objective that states that you will succeed as an insurance company through "being innovative." It may be presented upfront as a bold strategic theme, or it may be hidden in the depths of a key initiative. I’m also guessing that, for many of you, this objective may not necessarily be backed up by a statement of how you intend to achieve ‘being innovative’ or what ‘being innovative’ really means.
So, what does it mean to be innovative in insurance? Interestingly, when you search for a definition of being innovative in insurance using Google, you’ll get back over 24 million hits. For fun, you can also read some of the entries in our competition to define what innovation is for our industry in advance of our Innovation & Insight Day in Boston on 27th February (see our LinkedIn discussion group with circa 115 entries submitted so far). Finally, let’s not forget, that there is a whole industry of management self-help books out there online and in airport book shops (circa 39 thousand books listed in Amazon for innovation), plus academic research (639 thousand hits on Google Scholar for innovation and insurance) to help.
With all of this information available, I guess it should be easy for all of us to know exactly what to do to be innovative and how to use innovation to be successful? Mmmh. In my experience of running workshops with clients, innovation is rarely a well articulated or understood concept. In many instances, it is just another word for new, which, rather than helping a firm rally around a radical concept or idea, can underplay its significance.
So, when things start to get confusing or complicated, I personally like to learn through doing or by observation. Over the holiday period, I finally got around to reading Walter Isaacson’s “Steve Jobs: A Biography” (one of the many books you’ll find in or near the Management Section of your airport bookstore). Apart from the biographical elements about his personal life (many of which were eye-opening to me) and his dysfunctional people management style (which is a slight understatement), I found myself identifying some of the themes that made Steve Jobs and Apple innovative in my eyes.
Here’s a quick round-up of my take-aways:
* Adopting a heuristic approach. Learning by doing, taking risks, following instinct and accepting mistakes (well, some of them at least). It would appear from the book that few product launches led by Jobs ever followed a formal plan or typical investment case procedure adopted by many corporates that I’d recognise.
* Maintaining a pure vision. Jobs insisted on perfection. Products being first revealed to consumers were frequently pulled back from their launch date in order to achieve the "insanely great."
* Separating out a small team. Albeit not always by design, Jobs sometimes found himself creating a team outside of the main corporate organization. This had the effect of helping to focus minds as well as creating a distinct identity—even when this had the effect of creating a counter-culture to the parent firm.
* Hiring the "A-team." Jobs claimed that A-team players want to work with A-team players, and that B-Team players would only drain energy away. Jobs was pretty ruthless in insisting on the best.
* Creating a unique value network. Rather than making the best use of what’s out there already, Jobs frequently preferred to create a value network from scratch rather than compromise or find himself in a weak position of power.
Although often dysfunctional and extreme in the case of Steve Jobs and Apple, these observations are consistent with much of the formal management research on disruptive innovation and entrepreneurial success. Being innovative often requires a firm to break away from accepted industry norms and values in order to create something new.
So, in an industry as old as insurance, are we ready to live up to our written strategies and be innovative?
This blog has been reprinted with permission from Celent.
Jamie Macgregor is a senior analyst in Celent's insurance practice, and can be reached at firstname.lastname@example.org.
The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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