Given much of what we see and hear — much of what appears in but is not limited to the trade media in insurance or any other industry — we’re frequently reminded of the lyrics from the old Buffalo Springfield song, “For What It’s Worth”:

There’s something happening here.
What it is ain’t exactly clear.

The part that ain’t exactly clear has to do with disruption. According to Merriam-Webster, disruption is, “the act or process of disrupting something : a break or interruption in the normal course or continuation of some activity, process, etc.” That’s where things start to get muddy.

Homework Worth Doing

In much the same way that innovation is now interpreted to mean change, disruption is now interpreted, at least in many quarters, to mean improvement. Compounding the problem posed by the interpretation (and introducing irony into the equation) is the fact that many companies that promise disruption (meaning improvement), actually deliver disruption (meaning operational catastrophe). And every organization can tolerate (let alone afford) just so much disruption.

To minimize disruption (meaning organizational chaos), we employ what we call PREP (Project Risk-Elimination Planning). Here’s what we do:

• We come to your location for a few days.
• We get to know you, your organization, and the way it operates.
• We review your systems and their functionality, as well as your LOBs and their state variations.
• We show you our workflows for Policy, Billing, and Claims and review our Design Studio toolset.
• We validate the necessary integrations and share our implementation methodology.
• We discuss roles, responsibilities, and resources.
• We give you a project-management overview and develop a data-migration strategy specific to your needs.

That enables all of us to become familiar with each other, our respective organizations, the way each organization does things, and why. And it shortens the work of work associated with contracting because we’re already … well … prepped.

No More Disruptions

The last thing we want to create — and the one thing our customers can least afford — is operational disruption. If we can’t keep you online, conducting day-to-day business without interruption, as we deliver our system to you (improvement), we’re doing it wrong, regardless of what it means.

We don’t mean to suggest that our way is the only way. But it’s the best way we know to minimize disruption (meaning business disaster).

Some disruptions just can’t be pardoned.

You need to replace your core administration system, but you think you need too much customization. You know you’ll fall behind competitively if you don’t replace your system, but you think the customizations you want will cost too much. Are you sure?

We’re not necessarily anti-customization. But we do think customizations — their perception of their benefits and advantages — may be matters of perspective. This may seem like an extreme example, but please consider the following exchange:

Ed: I’d like to put a manual transmission in my car.

Fred: But it has an automatic transmission.

Ed: Yeah. But I want it customized.

Fred: It’s going to cost a lot of money.

Ed: Never mind. I want to shift the way I want to shift. And your price is too high now anyway.

Speaking of Shifting …

What if Ed had taken a slightly more objective perspective? What if he’d been willing to take a look at the way he went about the business of driving? What if he’d realized he could decrease the cost of going about that business, get to his desired destination more efficiently, and save himself some time and effort if he’d been willing to drive the car the way it was intended to be driven? We may never know. Neither will Ed.

From his perspective, it was better to re-engineer the tool than to consider the reasons for which it was built the way it was and to use it the way it worked best. It was more important to Ed to turn his car into something it was never intended to be, rather than to accept it as it was, to understand its advantages, and to reap its benefits.

Another Interpretation

If you have the tendency to view software the way Ed viewed his car, we have a suggestion: As you head to NAMIC this year, try thinking about another interpretation of the acronym this way: Not All Methods Involve Customization.

If you do that, your experience at NAMIC might be more fruitful. You might find things you didn’t expect to find, including new perspectives. And you just might find yourself driving toward competitive success in a whole new vehicle.

At the very least, maybe you’ll be able to see the possibilities once you’re able to see out from behind the eight ball.

This is the fourth post in a series inspired by a Harvard Business Review article, “The Hard Truth About Innovative Cultures”, that posited these five characteristics of effective corporate cultures:

1. Tolerance for Failure but No Tolerance for Incompetence
2. Willingness to Experiment but Highly Disciplined
3. Psychologically Safe but Brutally Candid
4. Collaboration but with Individual Accountability
5. Flat but Strong Leadership.

In our last episode, we pondered the role of respect in psychologically safe but brutally candid environments. In this episode, we contemplate the importance of coupling collaboration with accountability.

Free To Do It Well

The article from which this series derives has this to say, in part, about combining collaboration with individual accountability:

People who work in a collaborative culture … have a sense of collective responsibility. But too often, collaboration gets confused with consensus. And consensus is poison for rapid decision making and navigating the complex problems associated with transformational innovation. Ultimately, someone has to make a decision and be accountable for it.

While the people in our organization do, indeed, possess that collective sense of responsibility, we facilitate the success of their efforts — collaborative and individual — by ensuring our people are given responsibility and authority. Making people responsible for things — without giving them the authority to make appropriate decisions about them — sets those people up for failure.

Giving a competent person responsibility for achieving something — but giving decision-making authority to another person (who may be less competent, less responsive, less knowledgeable about the responsibility, or simply more detached from it), puts both of them in ineffective, inefficient positions. That’s why we make sure our people are free to do their jobs well.

If We Don’t Succeed, Our Customers Can’t Succeed

The other reason, of course, for assigning people authority for their responsibilities is that, as an organization, we want to be as responsive to our customers as possible. We do believe that two heads are better than one (collaboration). But we also believe good decisions made promptly are preferable to perfect decisions (which aren’t possible) made later. That’s why we strive to maintain an environment in which our customers succeed because we succeed.

Our customers and our employees seem to think that works pretty well.

This is the second post in a series inspired by a Harvard Business Review article, “The Hard Truth About Innovative Cultures”, that posited these five characteristics of effective corporate cultures:

1. Tolerance for Failure but No Tolerance for Incompetence
2. Willingness to Experiment but Highly Disciplined
3. Psychologically Safe but Brutally Candid
4. Collaboration but with Individual Accountability
5. Flat but Strong Leadership.

After distinguishing between mistakes and failures in the first post, we continue the series with an examination of experimentation and discipline from the perspective of our own organization.

First Things First

The premise of the article’s point #2 is summarized here:

Organizations that embrace experimentation are comfortable with uncertainty and ambiguity … They experiment to learn rather than to produce an immediately marketable product or service … [but they] select experiments carefully on the basis of their potential learning value, and they design them rigorously to yield as much information as possible relative to the costs. They establish clear criteria at the outset for deciding whether to move forward with, modify, or kill an idea. And they face the facts generated by experiments.

It’s fair to suggest we face facts first: We don’t know everything. We can’t predict everything. We can’t control (the outcomes) of everything. So, we approach every act of experimentation with discipline, informed by the years we spent as developers before founding Finys. Those facts — and the fact that our customers rely on us to make their businesses run better — compel us to approach new features or capabilities not as experiments but as trials based on previous empirical experiences: If this did that, we expect a particular variant of this to yield something new that’s a correspondingly particular variant of that.

Faith In, Faith Out

We choose to reward the faith our customers place in us by approaching every act of experimentation with all the discipline and all the knowledge we’ve acquired to date. We begin with clearly articulated and unanimously shared objectives. We celebrate the experiments that accomplish what we thought they would. And we nuke the ones that don’t. We won’t reward the faith of our customers by playing fast and loose with their businesses or their futures.

Uncertainty and ambiguity are parts of life and living. But facing facts with discipline is an effective way to foil failure.

We came across an article the other day on a site called, The Frisky (we’re not making that up). The article was called, “11 Emerging Insurance Technology Trends to Watch in 2019”, and it featured, wouldn’t you know it, an infographic. It also made this prognostication:

$2 Billion will be invested into emerging insurance technologies known as “InsureTech” … to completely disrupt the way consumers buy insurance and initiation [sic] claims.

That statement stands in stark contrast, of course, to the oft-stated contention that the insurance industry operates in the technological equivalent of the Stone Age. So, where’s the middle? And is there truth in it?

The Truth is Where You Find It

The fact is the insurance industry doesn’t exist to introduce or pioneer technology. But you’d never know that from reading most of the industry literature. That would have you believe driverless cars, programmed with nanotechnology and controlled by mobile devices, were being monitored by drones carrying wearables, running applications from the cloud, connected to the Internet of Everything and fulfilling Richard Brautigan’s promise that we’ll be “All Watched Over By Machines of Loving Grace“. Not so much.

As implausible as it seems given the fact that the speed of consumer adoption of technologies far outpaces entire industry adoptions of technologies, even the retail industry is having trouble adjusting to mobile. You can create technology. But that doesn’t mean it’s ready to emerge. You have to solicit the input of the people for whom it’s intended. You have to keep it up to date and functionally capable. You have to monitor its usage. And you have to resist surprise and frustration if the tried, true, and deeply entrenched do not go gentle into that good night — especially since practicality has a considerably longer shelf-life than sensationalism.

Consider this: When’s the last time you read an article about the number of insurance companies still working on green screens? Many insurers still do. When’s the last time you heard anyone admit to still using a dial-up modem? Some people still do. When’s the last time you heard anyone in any industry say anything other than their technologies were emerging, disruptive, or innovative? And why do you think that is?

It’s because talk is cheap. It’s also less expensive and more practical than chasing the rainbow and betting the ranch on emerging technologies.

Practical Is As Practical Does

And speaking of practical, is any industry more practical than insurance? Insurance has to be practical by definition. If you’re in the business of reserving the premiums of your policyholders against potential losses, what else could you be?

Yes. Like every other industry, insurance needs to keep its eye on emerging technologies. But its first look has to be at reliable ways in which to serve its constituents, minimally risky ways in which to deliver its products and services. If insurers spent their time and attention pursuing emerging technologies, how much would be left in which to satisfy and retain their policyholders?

We love our clients. They’re in the insurance business. That’s why we’re in the technology business.

For our clients, technology will continue to emerge as it can.