Technology Is More Art Than Science
I was a liberal arts major, focused on industrial psychology in graduate school, and began my insurance career in technology (data processing in those days). Go figure.
My friends were management science majors and I often wondered what was so scientific about it. I was skeptical. After 33 years in the business, I am convinced that it is more art than science. The insurance industry is not much different than others in this regard. We have our share of people who transform mediocre companies into winners and those who run them into the ground.
You already know that the "In Search of Excellence" companies are mostly gone or have become shadows of their former selves. The AOL/Time Warner merger, often referred to as the "great heist" (by AOL), is another example of personal vision gone awry by someone who most admire for his genius–Gerald Levin of Time Warner. That combination turned out to be lethal for him, and now even Steve Case is resigning as chairman.
Our industry had mergers that were never meant to be and bold visions that few challenged beforehand but now criticize in retrospect. And the trend of recruiting financial wunderkinds to "get back to basics" and focus on the "numbers and ratios" does not make it any more scientific either. Sometimes the numbers can blind people as well.
In fact, at this month's Joint Industry Forum in New York (a gathering of mostly CEOs), almost all the conversation was about their numbers, as it should be. Although they spoke about significantly reducing operating ratios and improving the "manufacturing" process, there was no mention of IT, except for a downbeat remark by one industry analyst. (In all fairness, it was during a heavy commercial lines discussion.)
On the heels of Y2K and the Internet bubble, I suspect IT has become something of a "third rail" in business forums today. And while I relish the attention when CEOs talk about IT, they sometimes talk about topics they seldom understand (unlike the numbers), so I guess I should be pleased. But unless there is an appreciation for IT-enabled change, were not really going to transform our very complicated business processes.
The CEOs also spoke about vision, and suggested that it was not about vision at all (not entirely correct) but rather about execution (however, quite true). They chuckled and said that they could come up with visions and a few strategies before breakfast, but execution was the make-or-break concern.
They also recognized the gap that exists between the top and the rest of the organization. The best and the brightest would have been challenged to deal with the culture conflicts that existed among the rank-and-file in the AOL Time Warner consolidation. So management turns out to be an art form driven by vision, followed by good execution, and measured by the numbers.
The same is true about information technology. Aside from the science that makes it possible for electrons to be manipulated in ways that are meaningful to humans, we have an art form. Vision (for the business), coupled with good IT execution, showing a positive return on investment requires creativity and re-thinking what we do and how we do it. Whether its actuarial, accounting, underwriting, marketing or claims, we need to be creative.
Even on a practical level, art overshadows science. Web sites designed by left-brained programmers tend to be inferior to sites designed by right-brained graphic artists. The left side of the brain is the seat of language, and processes in a logical and sequential order. The right side is more visual, and processes intuitively, holistically and randomly. (My industrial psychology is manifesting itself.)
There was a time when I eagerly awaited technological breakthroughs. They came fast and furious for awhile, but the pace slowed, and for the better.
When I attended the Consumer Electronics Show this year, I was pleased to see fewer new gizmos, but rather more devices being perfected to better fit the human condition.
Someone thought it would be cool to converge all kinds of mobile devices into a single device. Its the Swiss army knife mentality of combining features ad nauseam. We seem to find voice recorders on everything mobile today. Sometimes it makes sense and sometimes it just doesnt. As I walked through the exhibit hall, I was struck by the way manufacturers were improving upon what we already had. And this is a good thing.
Thinking about the customer and our business in new and creative ways is vital in a networked world with increasingly digital expectations from customers.
One analyst said large commercial lines were so complicated that they will always be people-intensive. Of course, this suggests that those people cannot be significantly helped by technology.
Well, computers happen to be very helpful when dealing with complexity. And if were not thinking creatively about helping people deal with complex transactions, we will be disappointed with our returns in the years ahead.
Yes, left-brain attributes are important for running successful companies. And being good at what you do is important, but so is doing the right things at the right time.
Being the best in a class of 20th century insurers is not going to guarantee success in the 21st century. And, I suspect, regardless of how you measure success in the years ahead, you will find more right-brained thinking behind it.
Gregory A. Maciag is president and chief executive officer of ACORD, the non-profit, standards-setting association based in Pearl River, N.Y., with offices in London.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 27, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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