The topic was how to build a practical and successful innovation culture in insurance, with a focus on identifying the common roadblocks and supporting intrapreneurship within insurance firms.
The event was co-hosted by:
- Ben Johnson, Managing Director & Global Head of Insurance, Sheffield Haworth
- Gaëlle Pritchard, Head of Assessment, SH Leadership
- Tim McEwan, Managing Director SH Leadership
Ben and Tim kicked off with an introduction to the topic. This was followed with breakout sessions for attendees facilitated by Ben, Gaëlle, and Tim, with support from:
- Becca Wood, Manager FSO – Insurance, Ernst & Young
- Peta Kilian, Strategy and Innovation, Talbot Underwriting
The attendees then regrouped for a wrap-up session in which the facilitators played back the main discussion points from the breakout sessions.
Attracting and retaining top talent to drive innovation
By Ben Johnson
Innovation in the insurance market is a broad topic and varies depending on what you mean by innovation, which part of the market you’re in, and which solutions you’re looking at. What we can all agree on is that insurance – in common with most other industries – is becoming much more technologically advanced.
It seems clear that transformation is moving at a slow pace within Insurance, particularly in comparison to other industries. According to Willis Towers Watson, fundraising in the global InsurTech industry for Q1 this year was a record high for any quarter, at $2.55bn. We could be looking at $10bn investment in InsurTech over this year. Although these are huge figures, I’m sure many in the industry would agree that this suggests how much transformation is still needed.
The industry still struggles to attract the talent it needs
Along with personalisation, data, digitisation, and automation, one of the biggest challenges facing the market is the ability to attract and retain top talent. We still see Insurance struggling to attract the talent it needs, despite being a multi-trillion dollar growth industry.
In the US only 2% of university graduates are considering insurance as an industry they want to move into, with many of them looking at different areas of financial services that seem faster paced and more innovative. Insurance is challenged to attract those new skills needed for innovation.
In the US only 2% of university graduates are considering insurance
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What’s holding Insurance back from implementing innovation?
If you can’t attract the talent, you need then you can’t develop or integrate those solutions you’re looking at. It’s one thing being aware of the innovations that are shaping our industry, it’s quite another implementing them, and that’s what I’d like us to talk about today. How are we going to look at implementing those solutions?
None of this is revolutionary. Many of us know that these are the challenges our markets are facing, but why is Insurance is still so challenged with regards to adoption? A lot of the conversation here will be around legacy systems and challenges around software and infrastructure. We’ve heard these conversations several times over. But what are going to do? What are we going to transform? Where are you on that journey?
Encouraging and supporting intrapreneurship
Intrapreneurs need organisational intelligence
An intrapreneur has additional challenges and additional characteristics. I define these as OQ. You’ve got IQ – Intelligence Quotient. EQ is our Emotional Quotient. OQ is an Organisational Quotient or organisational intelligence. How good are we at understanding the organisation within which we’re trying to innovate, change, challenge, be different? That’s where an intrapreneur differs from an entrepreneur. It’s the ability to read the landscape of a complicated organisation. Where are the key points of influence? How do I bring my emotional intelligence to bear in this whole piece? It’s this ability to innovate whilst also being challenged by the everyday.
Harvard professor Clayton Christian wrote a lot of the early work on innovation and disruption and made the point that you can’t disrupt yourself. Every time you try, the immune system of the organisation rejects the potential threat for being too different. An intrapreneur needs to be able to balance the natural tendency of an organisation to push back at you when you are trying to push forwards.
It’s a fine balance because at some point you’re going to start to really irritate people. And that doesn’t do any good either. You’ve got to try and balance it somehow.
Juggling innovation and business-as-usual
The final characteristic of an intrapreneur is the ability to juggle their business-as-usual job and their innovation role. Some of you may be lucky enough to be sitting in a lab that your firms have created in isolation. That’s a wonderful situation to be in. But not many people are there, so you’re having to constantly juggle BAU and innovation.
What does a supportive culture look like?
The thing that helps most is a culture that supports innovation and intrapreneurship. It makes it easier. That doesn’t mean innovation can’t happen in other organisations that don’t have a culture that supports it, it just makes it really hard.
What does that supportive culture look like? It looks like a leadership team which has a growth mindset. You’ve probably all come across the idea of growth mindset from Carol Dweck the US educational psychologist. Matthew Syed picked it up in his books Black Box Thinking and Rebel Ideas. A growth mindset is all about curiosity, about trying stuff, not being afraid to fail.
A growth mindset is all about curiosity, about trying stuff, not being afraid to fail.
his leads to my second point about organisational culture: that leaders need to create an environment where it’s psychologically safe to try stuff and to fail. Psychologically safe to put your hand up and say: “I don’t know.” Psychologically safe to be different, and to give new ideas a go and occasionally swim against the tide.
Know how far you can swim against the tide
I go back to my point about emotional intelligence and organisational intelligence: knowing how far you can swim against the tide before the tide overwhelms you.
Something else I think organisational cultures need to have is clarity. Where are we going and why are we going there? Innovation needs to be set within a context. There’s no point coming up with a wonderfully innovative tool if it’s only going to solve a problem in the asset management industry rather than in the insurance industry. It’s got to be within the context you’re operating in. Leaders need to be able to make that context really clear for intrapreneurs to be able to operate.
Intrapreneurs must be ruthless
The penultimate point might sound like it goes against my points about psychological safety, but there needs to be a degree of ruthlessness in an organisation that wants to be intrapreneurial. I say this because there’s a way to be ruthless and a way not to be ruthless.
Breakout sessions: Identifying internal roadblocks to innovation and what needs to change to support intrapreneurship
After the breakout sessions, the group reconvened to share what they had discussed, and their conclusions:
Breakout group 1 – Innovation can be intimidating
Facilitator: Ben Johnson
Overall, it seemed to be that most of the companies my group were working with are supportive of innovation but actually getting the innovation implemented is where we see the most significant challenge.
We discussed the idea of not trying to be perfect. If you try to get something perfect before you implement it, it’s probably never going to happen because actually perfect doesn’t really exist. We thought it was better to try something and launch it, and then refine and perfect it over a period of time.
Getting the innovation implemented is where we see the most significant challenge.
Another point was the idea of “innovation” as a word. It’s used a lot but in its purest form can be intimidating. Suggesting there’s a need to innovate effectively tells us that the people who are there right now are not innovative, or that we need to change everything that we do. That doesn’t necessarily bring the best out of people or help to take them along the journey. Making sure people know what you mean by innovation, making sure you communicate well, making sure people understand their part in that journey and how they can be involved in that change, we thought was very important.”
Breakout group 2 – Early inclusion helps reduce resistance to change
Facilitator: Becca Wood
Innovation. For some people it really is inspiring… for others it’s just quite overbearing and there’s a lot of pressure.
“We had a pretty similar discussion. We talked about innovation within our own organisations and we found that in parts it’s done really well, and then in others it can be really challenging. What drives that is mindset. It’s a lot about how it flows down from the top and being a lot about culture. Sometimes you can’t quite put your finger on what exactly is causing it or enabling it, but you just kind of feel it.
We also had that same discussion about the word “innovation” and the pressure that it can generate. For some people it really is inspiring and can offer up an awful lot of opportunity. For others it’s just quite overbearing and there’s lots of pressure.
What we did settle on was around what needed to change was having that support and enablement within an organisation – working together. But also making sure that those who might be averse to any kind of change that comes off the back of innovation are actively included from the start. That’s a really powerful thing about change management in general – making sure it is holistic for everyone involved.“
Breakout group 3 – Sharing knowledge can encourage innovation
Facilitator: Peta Kilian
Innovation doesn’t need to be big…it can be really small or done in increments.
“The main things that came out of our blocker discussion were:
- Investment – technology investment specifically
- Capacity to take on innovative projects
- Prioritisation – when there’s lots of other projects running, how do you prioritise innovation?
When we got into the discussion around organisational culture, we got some really good specific individual suggestions. Some of the big things that came out of that were:
- Innovation doesn’t need to be big, such as digitally transforming the whole organisation. It can be really small or done in increments.
- It would be good if it is a strategic priority of the organisation, because that means everyone’s swimming in the same direction.
Some of the more specific suggestions people came up with were:
- Having discussions within your wider team about what hacks or tips and tricks they have for doing things better in the organisation – if you know someone in IT or business change, they might be an enabler. Sharing these things amongst other people would help to get that incremental process change.
- Sharing your specialist knowledge. If you have something you’re good at and people come to you with that skill, instead of just doing it for them, showing them how to do it themselves. Getting that mindset shift to a growth mindset will help nudge people in that direction.”
Breakout group 4 – Empowering all levels of the organisation is key
Facilitator: Gaëlle Pritchard
“Some of what you’ve described we touched upon as well, but our group talked about two major roadblocks:
- The disconnect between the senior executives at the top layer and people who are on the ground and who know what innovation should be like, taking into account customers’ requests, for instance. Therefore, innovation is just a pretence at some level and actually doesn’t filter down because it’s not realistic or it’s not appropriate or relevant.
- The reluctance from some at the top table to change, for whatever reason. It can be in a small company where you have people who are powerful and will hinder the change. In larger organisations where you’re going to have bigger roots in terms of what is done and how.
You need to empower people and not just have innovation come from the top down.
The positive is really around what we discussed around what should happen to encourage innovation, which is about delegating power. To look at lower levels and taking it one step at a time.
Someone in the room described a very specific initiative in her organisation that enables people to share thoughts and suggestions regarding innovation on a yearly basis. We discussed that in more detail about how it needs to be not just one week where you discuss it, but that the ideas discussed are implemented and something actually happens as a result.
To me the big takeaway was about that need to empower people and not just have innovation come from the top down.”
Breakout group 5 – Are all stakeholders prepared for innovation?
Facilitator: Tim McEwan
Getting the innovation implemented is where we see the most significant challenge.
“Some of the blockers you’re mentioned we didn’t get to, which is what’s so good about sharing these ideas afterwards. One of the things we felt was whether or not people are ready for innovation, and whether clients are ready for it.
You can innovate all you like, but if a client doesn’t want it or says “We’re not ready for it yet”, for innovation to work we agreed that all the different stakeholders have got to be in the right place at the right time in their preparedness to adopt innovation. Otherwise, you’re pushing at a closed door.”