Zen and the Art of Innovating Smartly
As the digital disruption of the insurance industry continues, the pace of technological change seems to be accelerating. Amidst this sea change, chief information officers feel more pressure than ever from their CEOs to bring major projects to completion, deliver tangible results on increasing investments in technology, and demonstrate the agility necessary to compete in a digital world.
Inflexible legacy systems and the multi-year efforts to modernize them are a big obstacle to innovation for many carriers. As a result, they find their nascent digital initiatives have stalled, like scores of ocean freighters anchored near a backlogged container port.
In the face of overwhelming complexity and seemingly insurmountable barriers, business and IT employees can become frustrated, lose hope, and withdraw from full-spirited participation in innovation activities. This disengagement only exacerbates the barriers to innovation, creating a vicious cycle of decelerating progress. In his philosophical treatise Zen and the Art of Motorcycle Maintenance, author Robert Persig named this cycle the gumption trap.
Some carriers have found a way to reverse this cycle. They recognize that the primary barriers to innovation are not technological but organizational. To innovate smartly, they are changing the way they manage innovation.
It starts with better strategic focus. Carriers are making hard choices about the market segments they target and the business strategies necessary to differentiate themselves from competitors. They are aligning technology strategies to deliver critical business capabilities and sustainable unit economics.
Innovative insurers are embracing design thinking in a substantive way, beyond simply aspiring to create better human experiences. They are implementing repeatable processes for innovation, deploying new tools, and taking a more scientific approach. Iterative, data-driven experimentation, with a focus on rapid learning, is replacing rigid planning as the best way to manage uncertainty and risk.
Design thinking is driving changes to the organizational structure of insurance companies. Multi-disciplinary product teams are becoming a primary organizational construct to manage innovation in a holistic, non-siloed manner. These teams are charged with developing a deep understanding of customers, discovering problems worth solving, and prototyping possible solutions. New roles in product management are emerging to facilitate the important work of these teams.
Most importantly, some insurers are taking a more enlightened approach to culture. They recognize that trying to motivate employees to be more innovative—whatever that means—is not enough. The key is to cultivate creativity. How? By issuing audacious challenges to employees, empowering them to lead and make decisions, and providing dedicated time and a safe space for ideation.
Doing these things, especially within an organization that has been retooled to innovate smartly, can create the conditions for employees to experience creative flow, an almost zen-like state that fully engages the hearts and minds of employees in innovation. It’s the exact opposite of a gumption trap.
But don’t take my word for it. See for yourself what it looks like to manage innovation differently. The exemplars of innovating smartly within insurance and financial services will be on the virtual stage of Celent’s 16th annual Innovation & Insight Week, held March 15-17, 2022.
There is still time to register for this free event, at https://www.celent.com/iiweek2022.