It's no secret that one of the best ways to gain a competitiveedge is to simply understand what your competitors are doing rightand wrong. Both success and failure can come in many forms.At the end of the day, however, it boils down to threekey competencies: people, processes, andtechnology. Organizations either get them right, or they donot; unfortunately the latter is more prevalent.

While all three are of critical importance, it ispeople who will ultimately define the success of an organization. Havingthe right people enables fundamental execution of basic blockingand tackling. They will ensure that processes are optimizedwhile technology is appropriately used.

Why are people so important to organizational success? Tobegin, they become the culture of the organization. It is theculture that ultimately defines outcomes. To put this inperspective, think about a trip to a Disney theme park and thereception that awaits. Friendly staffers abound, looking to donothing more than make your experience, and that of millions ofother guests, unforgettable. Now compare this to anotherunforgettable experience, such as renewing your license at theDepartment of Motor Vehicles. Institutional cultures can makeor break an organization.

Company Transformation

Next consider the dynamic between good and great. Goodteams win when they outplay their opponents. Great teams win whenthey outplay and outthink their opponents. Dynasties areformed when outplaying and outthinking results in people,processes, and technology that transform opponents.

When thinking of business dynasties a few names come to mind;Apple, Walt Disney, Wal-Mart, Samsung, Facebook, andGoogle. These companies have leveraged innovation whilecombining the right people with the right processes. They alsoconsistently appear in Business Week's annual review ofthe world's most innovative companies.

Interestingly, in reviewing this list for the past several yearsthere was one industry that was conspicuously absent:insurance. Why is it that an industry that wields such powerand economic control is so lacking in innovation? Can youimagine if one player transformed the insurance industry in the waythat, say, Southwest Airlines transformed the airline industry?

By looking across the aviation landscape, Herb Kelleherrecognized that there was room for not only a new player, but onecapable of delivering a new type of flying experience at anaffordable price. He leveraged a single type of airplanequickly transferrable from crew to crew, avoidance of the costlyhub and spoke design and most of all the friendly people came todefine Southwest.

Certainly there is room in under the innovation tent for thosein the insurance industry. The challenge is to foster such anenvironment so as to take your organization from ordinary toextraordinary.

At the foundation of the successful organization will be people;the right ones in the right positions. This is easier saidthan done, but is certainly not an insurmountabletask. Sometimes it takes a change in paradigm wheretraditional hiring practices are retooled to proactively identifyand tap potential talent pools.

This change in paradigm was best put into words by formerUCLA basketball coach John Wooden, who said, “Failure is not fatal;but failure to change might be.” In most simplistic terms,people are creatures of habit. Those who create dynasties,such as Wooden, are not. Rather, they thrive onchange.

Industry Transformation

Facilitating change not only helps your organization, but canalso improve entire industries. Think of what Amazon hasdone to the way we shop, or what Southwest has done to the way wefly. Consider the impact of Honda on the auto industry,Verizon to the telecommunications industry or Pixar to theentertainment industry. These companies have transformed theirrespective industries for the betterment of all.

Why can't the same be said for the insurance industry? It can,and it will. It simply takes innovators who are willing tostep outside of their comfort zone. It takes leaders who wantto stop things the way it has always been done and start doing itdifferently.

When breaking down the claims process, consider the crucialelements of liability and damages. An often lamented result isthat of improper liability assessment, which I can relateto. During my tenure running claims operations, it was achallenge to get adjusters to assess liability at other than 0 or100 percent, despite evidence to the contrary.

It shouldn't be this way, especially when nearly half of allclaims adjudicated result in an assessment of comparative negligence, or shared fault, by juries. How isit that six or twelve lay people with little to no understanding oftheories of liability are able to properly assess it, yet our“expert” adjusters cannot?

At the end of the day it comes down to the people, processes,and technology that are in place. The advent of technology nowallows the adjuster to literally recreate the accident on hisor her desktop. By focusing on the scene, weatherconditions and points of impact, liability can be properly assessedon a consistent basis.

The same holds true for damages, which when properly evaluated,should reflect the value of the claim, not some attorney's inflateddemand. Again, leveraging the three key competencies allowsfor insurers to gain a competitive edge in themarketplace.

By changing an organizational paradigm from “what we do right”to “where can we improve,” business leaders are taking the firststep in achieving great success and redefining an industry that hasfor too long been defined by the status quo.

Christopher Tidball is an executive claims consultant andthe author of multiple books, including Re-Adjusted: 20 EssentialRules To Take Your Claims Organization From Ordinary ToExtraordinary! His claims career has spanned 20 years withmultiple top 10 P&C organizations in adjusting, management,quality and leadership roles. Tidball is a senior director,casualty solutions consultant with Mitchell International.