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September 14 2015 | Deb Smallwood

Recently, I wrote about innovation and changing the way we acknowledge, nurture, and incorporate it into our organizational culture. There are many areas where our industry desperately needs transformation and innovation. Our very survival depends on it.

At SMA, we have the luxury of a rather unique view of the industry. Our research and ongoing activities with a wide variety of insurers, industry associations, and solution providers positions us to view what is happening through a very broad lens. Not only can we “see” what is happening, but we are also equipped with a compare and contrast perspective. There are many learning points about innovation progress in our industry – the primary being the fact that innovation is on a bullet train – insurers are not standing still. That is great news!

While we are witnessing remarkable progress, we have some interesting observations about the opportunities and the obstacles for innovation. There are high hopes for a boatload of great ideas – creative product offerings, process improvements, better ways to engage the customer, more effective service modes, new approaches to capitalize on maturing and emerging technologies, etc. But, the reality is that in many organizations, the innovation path is lined with obstacles that leave potentially success-producing concepts off the table and out of the picture. In many cases, these hurdles and roadblocks are not intentional – in fact, they are not even apparent to the very leaders that are working hard to stimulate innovation in their organization.

Some insurers are open to any and all ideas – every single one! Any and all innovation ideas are nurtured. In contrast, other insurers have targeted their innovation efforts by assigning teams to look at specific process areas or business lines. A project approach makes it easier to manage and measure but can limit the scope of the vision. Other insurers designate the responsibility for innovation to a department head, frequently IT or a line of business. With this approach, responsibility is assigned, typically with accompanying funding, but it too can be limiting due to unintended gatekeepers and biased priorities.

Innovation requires a nurturing environment, one that encourages people to submit ideas with the confidence that this is a place to explore and experiment – to assess the state of readiness, address potential obstacles, find probable pitfalls, and measure the potential for success with the assurance that failure is acceptable. Once an idea is explored there needs to be a place for it to mature and flourish or a graceful way to table it until timing is right, and in some cases, a gentle way to kill it. The ideal is an environment with no gating criteria, no judgment, no politics.

Innovation requires a nurturing environment, one that encourages people to submit ideas with the confidence that this is a place to explore and experiment

Embracing true transformation and innovation requires a thorough and straightforward examination of the current role innovation is allowed to play within your organization. To discover the roadblocks, begin asking some questions: Is there a genuine acceptance that valuable ideas can come from any level within our organization? Are employees empowered to offer suggestions without the fear of embarrassment or possible reprimand? Is there authentic encouragement for an exchange of opinions? Does a pathway for fresh ideas exist? Have we demonstrated administrative as well as executive support for innovation in general?

SMA often sees hurdles that prevent good ideas from being presented and coming to fruition. Most are unintentional, and some continue to exist because they haven’t been recognized as obstacles. That will be the focus of our sold out 2015 SMA Summit: The Next-Gen Insurer being held in Boston on September 21. Be sure to follow us on our website and on Twitter (#SMASummit) to hear about how the insurance industry is embracing innovation. Insurers are actively confronting the status quo and adopting a culture of change that accepts and encourages transformation. They are turning obstacles into opportunities. They are making transformational leaps, giving them the business capabilities to power the necessary growth and future successes.