It's no secret that one of the best ways to gain a competitive edge is to simply understand what your competitors are doing right and wrong. Both success and failure can come in many forms. At the end of the day, however, it boils down to three key competencies: people, processes, and technology. Organizations either get them right, or they do not; unfortunately the latter is more prevalent.

While all three are of critical importance, it is people who will ultimately define the success of an organization. Having the right people enables fundamental execution of basic blocking and tackling. They will ensure that processes are optimized while technology is appropriately used.

Why are people so important to organizational success? To begin, they become the culture of the organization. It is the culture that ultimately defines outcomes. To put this in perspective, think about a trip to a Disney theme park and the reception that awaits. Friendly staffers abound, looking to do nothing more than make your experience, and that of millions of other guests, unforgettable. Now compare this to another unforgettable experience, such as renewing your license at the Department of Motor Vehicles. Institutional cultures can make or break an organization.

Company Transformation

Next consider the dynamic between good and great. Good teams win when they outplay their opponents. Great teams win when they outplay and outthink their opponents. Dynasties are formed 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, and Google. These companies have leveraged innovation while combining the right people with the right processes. They also consistently appear in Business Week's annual review of the world's most innovative companies.

Interestingly, in reviewing this list for the past several years there was one industry that was conspicuously absent: insurance. Why is it that an industry that wields such power and economic control is so lacking in innovation? Can you imagine if one player transformed the insurance industry in the way that, say, Southwest Airlines transformed the airline industry?

By looking across the aviation landscape, Herb Kelleher recognized that there was room for not only a new player, but one capable of delivering a new type of flying experience at an affordable price. He leveraged a single type of airplane quickly transferrable from crew to crew, avoidance of the costly hub and spoke design and most of all the friendly people came to define Southwest.

Certainly there is room in under the innovation tent for those in the insurance industry. The challenge is to foster such an environment so as to take your organization from ordinary to extraordinary.

At the foundation of the successful organization will be people; the right ones in the right positions. This is easier said than done, but is certainly not an insurmountable task. Sometimes it takes a change in paradigm where traditional hiring practices are retooled to proactively identify and tap potential talent pools.

This change in paradigm was best put into words by former UCLA 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 on change.

Industry Transformation

Facilitating change not only helps your organization, but can also improve entire industries. Think of what Amazon has done to the way we shop, or what Southwest has done to the way we fly. Consider the impact of Honda on the auto industry, Verizon to the telecommunications industry or Pixar to the entertainment industry. These companies have transformed their respective 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 to step outside of their comfort zone. It takes leaders who want to stop things the way it has always been done and start doing it differently.

When breaking down the claims process, consider the crucial elements of liability and damages. An often lamented result is that of improper liability assessment, which I can relate to. During my tenure running claims operations, it was a challenge to get adjusters to assess liability at other than 0 or 100 percent, despite evidence to the contrary.

It shouldn't be this way, especially when nearly half of all claims adjudicated result in an assessment of comparative negligence, or shared fault, by juries. How is it that six or twelve lay people with little to no understanding of theories 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 now allows the adjuster to literally recreate the accident on his or her desktop. By focusing on the scene, weather conditions and points of impact, liability can be properly assessed on a consistent basis.

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

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

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

Special Reports /

Adopting The Paradigm of Success

Related Stories

Recommended For You