Insurers: “Improve Your Path”
There’s no shortage of competition in the insurance industry. Indeed there is so much of it that insurance products and services are perceived as commodities by many, if not most, consumers. Can you name one insurer who, if it disappeared, wouldn’t be replaced by the competition within nano-seconds? Exactly. So, the question is….what are you doing to be remarkable and thrive over the long-term?
Few insurers have been able to break the mold and stand out in a way that has resulted in extraordinary new growth. The sales tactic that worked will not be the same things that lead to customer retention, loyalty and long-term profitability.
It was Einstein who said that the definition of insanity is “doing the same thing over and over again and expecting different results.” Having been in a great position to observe the way many insurance organizations operate over the past 2 decades I can say that while most leaders understand what Einstein meant, many smart executives find it difficult to execute against a strategy for doing anything much different from the way they are doing things last year. The problem, I believe, is that too many equate change with switching paths when there’s more to be gained, in most cases, by improving paths…. becoming more engaged with existing customers, processes (yes, engage with a process!) and employees and treating them all in ways that will beget loyalty which leads to organic growth.
Large companies sometimes argue that because of their size they are unable to move as briskly as they would like and envy smaller companies. At the same time, smaller companies complain that they don’t have the same access to capital that larger companies have and it is keeping them from being as innovative as they want to be. My take? Einstein didn’t rely on excuses and neither do strong business leaders.
To significantly improve results over the long-term, the companies who win will be the ones with the deepest view and understanding about their 1. customers, 2. processes and 3. employees. Once that view is obtained and shared throughout the organization, alignment takes place, waste is abandoned and customers feel special and recommend the company to friends, family members and colleagues.
The average insurer is on the right path but they are spending too much time thinking about the destination and not enough time tending to the path. Just remember that there are specific measures you can take to begin improving that path and increase your ability to win over the long term. Anyone who doesn’t improve it will follow those that do. Success in the insurance industry won’t depend as much on size as much as it will depend on knowledge of customers and the will to execute improvements that benefit them. It is too often we talk about reaching goals or a vision without adequately addressing the path that will take us there.
Here are some perspectives from thought (and action) leaders that you will find interesting. I hope they will help you improve your path. Enjoy!
Net Promoter Score®: A Primer http://tinyurl.com/yfv5qln Companies are turning to the Net Promoter Score for a better read on what customers really think. This link to Bain & Company’s website will lead you to a short article and a valuable 4 minute video of Rob Markey, a Partner at Bain and Company, describing the Net Promoter Score process. This is especially helpful to anyone who hasn’t read “The Ultimate Question” byFred Reichheld or heard of the Net Promoter Score (NPS), which is a radically simple way of viewing your customers and becoming a great ’starting point’ for many companies around the globe to begin ‘improving the path’. Disclosure statement: Many of you may already know this, but after 20 + years working within insurance operations and then spending some time on my own as a consultant, I approached SATMETRIX, co-founder of NPS with Bain and Fred Reichheld and am now happy to be working with them on NPS and matters of insurance globally.
Willis’ Plumeri discussed ’The Big Picture” in Beyond the Boardroom http://tinyurl.com/ygyq4mk This interview of Joe Plumeri by Loews Chairman and CEO John Tisch is about 23 minutes long. The first portion of the video (approx 6 minutes) covers the Plumeri’s background, upbringing, etc. The second part shows his optimism about the future and his company’s path for strengthening its position in both the US and global market. Whether one agrees with him or not, Plumeri’s perspective is insightful to anyone in the risk business. Enjoy!
Google CEO Eric Schmidt on the economy and the future. http://tinyurl.com/yk6chek
This 55 minute interview of Google’s President and CEO from The Aspen Ideas Festival gives us a perspective from a relatively new, large technology company leader. I like the interview, in particular, because he discusses the value of a historic perspective and information. Can you innovate your way out of a recession? That question and questions about making decisions on end-user benefit, something we can relate well to as insurance professionals, are discussed in this great interview.
17 Minutes of Seth Godin on ‘Tribes” http://tinyurl.com/yjmu2qm In this video, Godin talks about leading change and why bombarding the general public with advertizing will eventually give way to approaching specific markets with specific messages on a micro level. If you care about the power of word of mouth and the future of penetrating ‘tribes’ of people with your message, this is a must watch.
Bo Burlingham author of ‘Small Giants’ http://tinyurl.com/yjnh4qx In his book Small Giants, Burlingham reviews 7 business leaders who made a decision not to grow for growth’s sake. While this vid. is 3 years old, the message is more pertinent today then ever. In this authors@google video, he talks about what some of those companies have in common, their definitions of success, and profitable growth for the long-term. As companies struggle to do the same, we see that leadership and culture aren’t things we can read about and then just execute on. Caring means a lot. Communication means a lot. “Everything truly matters”.
I bought Small Giants for myself this past Christmas and am really enjoying the book. It’s a great read for leaders of any company regardless of size.
Lastly, please forward this blog link to your contacts in the insurance industry. I spend a lot of time combing the internet for useful material and want it to reach as many people as possible.
Until next time,
Bernie Rosauer
Mark Hurd, CEO HP – great hour long talk at UC Berkeley
HP spends $13mil. an hour to run their business. Amazing.
Like your insurance company, Hewlett Packard has customers, employees and processes surrounding and between the two. HP is the second largest tech company in the world and Hurd does a great job putting HP in perspective size-wise compare top the industry on a global basis. This is an hour long lecture given by HP CEO Mark Hurd to the business students at U.C. Berkeley.
This one hour vid. will reveal the relative simplicity of HP’s strategy and what HP does to maximize the returns on it. Whether you lead at a carrier, brokerage, bike shop or grocery store, this video is a great one to watch. If you like this as much as I did, go ahead and pass this along to other leaders throughout your organization. Best, Bernard
Allianz’s New Bonus Plan: Doing Business The Right Way.
While AIG talent threatens to walk out the door, Allianz’s talent leads. What an outstanding move from a global giant. Follow this link to read the short article. http://tinyurl.com/ygvezzx
Note that Allianz adopted The Net Promoter Score (NPS) some years back to help them get their workforce thinking about growing over the long term – the smart way. I am joining the NPS/Satmetrix crew next year, working on their insurance verticle efforts (policyholder and agency/broker VOC, consulting, etc.) and am really looking forward to it. Conference in February 2010.
Happy holidays everyone. Challenging times ahead. Stay close to your customers, get them talking about you and you will win.
Bernard
The Economy by Peter Schiff
“Peter Schiff is an American economic commentator, author and licensed stock broker who currently serves as president of Euro Pacific Capital Inc., a fully accredited brokerage firm based in Darien, Connecticut.” – Authors@Google
If this is where our economy is going, what will your policyholders be needing 3, 5 or 10 years out? If hyper-inflation is inevitable, how will you position yourself as a company that is there for them when they need you most? Will M&A’s result in strength or will they result in limiting the flexibility that will be required to best support customers in the US economy? Is bigger better?
My perspective is that companies need to cut to the chase, get as close to their customers as possible, listen to them and then execute against their needs. Banish everything else – because everything else (unless its required by law) is waste. Get close, stay close, grow organically more than ever before. Oh, and get great leaders. You’re going to need them.
Net Promoter Conference Feb 1&2 2010
I will be joining the Satmetrix team next year! My role will be to help insurance carriers understand NPS – what it is, what it isn’t. Very much looking forward to helping companies grow the smart way. If you attend this conference, please reach out and let me know. I’d love to chat about what you do over a latte’…or two…
Insurance Market Leadership Blog – Consumers Thoughts in the Years Ahead
Welcome to the blog for insurance leaders. We all read our own industry’s periodicals and track thought leadership that pertains specifically to our industry. This blog opens the borders a bit and brings to insurance leaders information about how businesses and the customers they serve can align for mutual long-term benefit.
This 20 minute video features John Gerzema, Chief Insights officer at Young & Rubicon in New York. After watching it, leave a comment about if/how you think the changing consumer disposition will impact competitiveness in the insurance marketplace. What do you think companies need to be doing now in order to win over the long-term?
Delores Espinosa Saves United Airlines
Let me set the stage. I had a red eye out of San Francisco and then a connection in Chicago to my final destination. My meetings ended early so I thought to get to the airport and standby for an earlier flight. Good fortune came my way and I was able to grab a flight to Chicago 7 hours earlier than my scheduled flight. Cool.
I get to Chicago and see there’s a flight out to Green Bay, which is near Appleton, WI. Now, my ticket was for Appleton, but GB is only a half hour drive away and my ride had no problem with the extra half hour drive. Unfortunately United Airlines wouldnt let me go on standby! I stopped by two ticket counters and the UA information counter and was told that because it was a different airport and because my original flight was for the next morning/day, those would be two big rules they would be breaking and it would cost me $150 – to take a seat that had not been taken! No standby allowed. Hmph.
I called UA’s 1800# and was told the same thing but made the person on the phone defer to a manager…who behind the scenes said no. I saw that coming. The kind person on the phone then told me that I should visit another UA counter because the decision was ‘an airport decision’.
I went back to the gate and spoke with another person, Delores Espinosa. The plane was boarding. I explained everything, she checked my boarding pass, saw she had 4 seats unfilled, and put me on the plane.
On my flight I thought about creating a website where people can report great front-line employees who are supported by crummy systems. Any one of the prior employees could have handled the problem but it was Delores, the busiest of them all, who was left to make the call. Classic lead time process failure for all you ‘lean’ characters out there. Anyway, thanks Delores!
Where is social media going? Ask Gary Vaynerchuck.
This is the best video I’ve seen this year. Gary Vaynerchuck built winelibrary.tv, a 50 million dollar business by turning away from traditional advertising and toward social media. In this video Gary, who’s a no-nonsense down to earth 1st generation Jersey guy whose parents are from Belarus, shares his experiences in a way that will change the way you think about social networking.
If you think competing in social media is easy – watch this. If you think getting in early on the social media train will put you ahead of the game – watch this. If you want to learn more in an hour and a half than you ever have before – WATCH THIS!
Well, I said it…
I read a piece in The National Underwriter that made me think: Whats with all the big studies by expensive consulting groups around carrier/agency relationships? They must be up to something! Anyhow, I unloaded a bit with a post to Sam Friedman’s weblog today and thought I would include it here as well. Happy reading.
http://nusamsoapbox.com/2009/11/09/carriers-producers-fail-to-communicate/#more-1375
Know when to say ‘yes’ and when to say ‘no’ to customers.
Jason Fried owns ’37signals’, a successful software company. Don’t draw quick conclusions – this video is less about software than it is about business in general. What’s interesting to me is how the tech business owners have been forced to learn so quickly what other business leaders have taken entire careers to learn. Its the nature of the business – customer requirements and the speed of change in the tech industry require the industries leaders to learn at what most of us would consider breakneck speed. Its not that they’re smarter. They’re forced to learn or die in short order.
In this video, Fried talks about how software is different than ordinary products in that we cant touch or feel them….this makes them difficult to manage. Having worked in the service industry for over 20 years, I automatically drew parallels between what he was saying about software and my experience with ‘knowledge’ workers. We can’t always see knowledge, motivation, emotions, intelligence etc. yet they are either useful or a detriment to business leaders as they attempt to get a business to succeed.
He also spends time (in this video) talking about customer requirements and the importance of listening to them and then judging which ones to act on, when. Love it!
Enjoy the vid. There are a few cuss words but eh, he’s young and I figured you would get over it to hear the bigger message.
