With digital and analytics skills in short supply, how best can insurers foster innovation within their organizations?
This was a key discussion point at the Digital Insurer Network workshop. In a sense, the fact that the skills on which innovation will ultimately depend—analytics and digital in general—are in short supply will dictate the answer.
We are working with several clients at present to address similar issues and our belief is that one of the most viable approaches is to create a central organization that can act as a catalyst. For example, one client has developed a data innovation lab that aims to nurture cross-functional innovation. A key success factor is that the lab is led by a C-level executive: as we all know, the right level of executive sponsorship is critical, especially when the project is breaking new ground.
Such an entity would house people offering three different types of skill: a deep understanding of the business and its value drivers, pure analytics, and the technical smarts to put in place the right kind of infrastructure. It would test and pilot analytics projects that generate value, and then spearhead the rollout of those pilots that are deemed successful. This second phase—which one might call industrializing innovation—is perhaps the most challenging, and it’s an area to which we are giving special attention.
In similar vein, some insurers are creating a digital lab, with much the same set of goals, this time covering the broad spectrum of digital technologies. One of our clients is adopting a partnership approach, and working with key vendor companies to identify, pilot and then roll out new initiatives based on digitization.
Another area of focus for such a lab is to develop and experiment with new digital or connected offerings. As we know, innovations affect how life is lived and so testing, learning and adapting to new concepts at speed is vital.
This type of approach brings all the scarce talent together in one place to ensure an environment that is most conducive to collaboration, and then uses it as a catalyst for change within the broader organization. In my view, one of the most important things to get right is to ensure that the new organization is genuinely cross-functional. Insurance companies, like their peers elsewhere in financial services, tend to be highly siloed—by contrast, data analytics in particular and the notion of the digital insurer in general are founded on the concept of one company. Insurance customers, for sure, have indicated that they want a consistent and personalized experience, and that can only be delivered by a company that acts as one. (Read more about what insurance customers are looking for by downloading the Accenture 2013 Consumer-Driven Innovation Survey.)
Next time, let’s explore the related issue of how to infuse this culture of innovation throughout the company.