Insurance companies, in recent years, have invested heavily in innovation practices, looking for improvement in both efficiency and profitability. While it is easy to stress the advantages of innovation, it is difficult to transform a good idea into a successful business outcome, or, in other words, managing innovation in the right way takes effort, patience, and skill. From a management perspective, how can we best manage, support, and evaluate the process of innovation practice?
Dan Kaiser, Senior Vice President for CUNA Mutual Group (CMG), discussed his perception and experience within a corporate innovation context during a visit with MBA students studying risk management and insurance at UW-Madison on February 27th. Leading an innovation team in CMG, Mr. Kaiser has been involved in several innovative initiatives, including internal efficiency improvement and creating entirely new product concepts. These initiatives are being done within an existing, mature enterprise, leading Mr. Kaiser to study and contemplate the needs of innovation in varying scenarios. What is needed in a new enterprise is quite different from what is needed in a mature enterprise. Yet the mature enterprise may not recognize these differences. Being able to communicate in terms that the leaders of a mature enterprise understand while still being able to address the innovation more akin to a start-up is a skill that is critical to success in these situations. It takes time and needs courage for an organization to adopt a new IT system, to optimize operation process, and to manage the risks. Nonetheless, markets will reward the front runners in innovative practice.
As for external or independent innovation management, Mr. Kaiser visualized the concept by sharing a few charts which illustrate the growth curve for a company. He argued that managerial resources and behavior should match different stages along the company’s growth curve, otherwise it could arrest the development. Moreover, it is crucial to develop appropriate metrics to measure the value of an innovation process. Even though financial indicators seem objective and efficient, the value of a new project embeds in other implicit progress. Running a start-up company as a co-founder, this methodology resonates with me. A successful innovation practice needs reasonable expectation, support, and time to develop. Having Mr. Kaiser put these ideas into a coherent structure for us helps embed them firmly in our understanding and our own personal development. Innovation will be key to our future success, and Mr. Kaiser’s lessons will help get us there.