You've Got a Friend

As Bill Hartnett, director of U.S. insurance solutions for Microsoft Corp., describes it, there is a tidal wave coming–80 million consumers and employees whom the insurance industry will have to engage as the people who buy their products and run their operations in the very near future. "Boards [of directors] are starting to look at it as a crisis," he says. "How are they going to attract the right employees and compete in the marketplace where expectations are being set by other firms?"

Millennials are the first generation arriving in the workplace with prior experience with technology, notes consultant and author (Generation Blend) Rob Salkowitz. "Boomers and Gen X typically learned to use workplace technology at work and didn't come into the environment with a lot of expectations about what it could and should do," he says. "That's changed in the last 10 years as a generation that grew up with the Internet and mobile devices also saw how useful and innovative these services could be on the Web for doing important activities. You run the risk of having for the first time a group coming in that is more sophisticated than the IT decision-makers."

The history of insurance always has been built around affinity groups–people who share the same risks, explains David Piesse, global head of insurance for Sun Microsystems. "With social networking, we're looking at the rise of some massive affinity markets: the underbanked, underinsured, the Muslim population around the world, and Gen Y–younger people who look at life differently," he says.

Piesse believes changes are being caused by the next-generation Internet and everyone wanting to do things in different ways. "With the new Internet, everyone collaborates together," he says. "If I worked for an insurance company and I offered young people a product, they most likely would talk to all their friends about the product before they buy it. Whereas people like me would just go out and buy it."

Usually it's the Web 2.0 implementations that are lagging in an enterprise environment, according to Salkowitz, pointing to technology such as blogs, wikis, Twitter, location-based social networking using mobile devices, and GPS that is integrated so users can see whether someone is in their office or on the move. "Typically, there's a three- to five-year lag to get things into the enterprise in terms of security and compliance requirements," he says. "What frustrates the end users is they don't understand where that lag comes from. What frustrates the IT decision-makers is the end users don't understand the security problem."

Oliver Young, a senior analyst with Forrester Research, points out there are good open-source tools available for a company to get started with social networking. The bigger issue, he maintains, is a cultural one–getting people to use the tools appropriately and to their fullest effect. "It's not an easy culture to instill," he says. "It's a big change to go from e-mail in a private set of conversations to something that is out in the public space."

The best way for companies to begin is to start small, advises Young. "Because it's going to require a big change in how employees get their job done–a shift away from e-mail to collaboration tools–it's helpful to bring employees along gently and do so in a way that shows [users] concrete business value," he says.

Insurance firms traditionally are very slow to adopt technology, continues Young, but despite this, the Web 2.0 collaboration tools are finding their way around the industry. "I have an inordinately large number of calls and conversations with insurance companies [on this issue]," he says. "Fundamentally, these tools are about helping knowledge workers get their job done, and insurance is a knowledge business."

When blogs first began to become prevalent, they generated great interest among the upper management at Northwestern Mutual Financial Network to bring the communication tools into the enterprise. "What we wanted to do was be able to increase our dialog between our employees and our field force, start to encourage idea sharing, enhance our productivity, and begin to capture institutional knowledge and drive employee engagement," says Paul Buss, intranet manager for Northwestern.

The key factor was employee engagement, Buss asserts. "We believe in open communication here and wanted to foster that by giving people an open forum to allow for that instead of the traditional [communication] methods that usually are one way," he says.

The Northwestern blogs have created a lot of interest. "We've been fortunate people latched on quickly and became comfortable with it," says Buss. "They openly share ideas and comment back on them. There are a few focused blogs that are regular features, but that's a smaller amount of what we have out there."

There are no restrictions on blog topics at Northwestern, according to Buss. "They run the gamut from new technology coming out to more of the things that are happening around the enterprise that impact everyone," he says.

The blogs are reaching Northwestern's millennial audience, reports Buss. "They are the ones that latched on the quickest," he says. Northwestern does not allow anonymous blogging, so employees put their name to their post. "When you go through the posts, you can see it is a majority of the millennials doing this," he says. "They've actually come up with some new ideas."

Social and recreational groups within Northwestern are allowed to use the blogs to promote their social events and as an open forum to discuss some of their events and ideas. There aren't any posts about the newest movies or how the hometown Brewers will do in the coming baseball season. "We haven't seen many purely social posts," says Buss. "People understand they are at work, so they have bought into it as a channel to share work information. There is some fringe stuff such as technology that gets talked about–even blogging about blogging–but it relates back to either their job or the company as a whole."

The time-wasting potential for this technology is immediately obvious to Salkowitz and many companies. "All of the abuses and the things that happen on IM networks raise the eyebrows of HR and compliance officers and are the first things you think of," he says, adding the business value of social networking is more subtle, though. "If you get a critical mass of user participation, you're going to get better ideas coming into the innovation process and more attachment to the brand because consumers feel ownership of it," he says. "All it takes is one breakthrough idea to emerge from the social networking collaboration system that could be worth millions of dollars."

With past projects involving its vendor partner CSC, North Carolina Farm Bureau (NCFB) tracked updates on a CSC Web site, but Kitty Price, operations division manager for NCFB, didn't feel her staff used the site to full effect.

As NCFB began newer projects with CSC, though, the vendor's Wikonnect network proved invaluable. "Both of our new products [purchased by NCFB] have a page [on Wikonnect] and we found it was an easy way to get information," says Price.

CSC can post information on the product page and Wikonnect serves as a repository, so there's documentation to which customers can gain access. "We use it to post our status when testing," says Price. "We found it was a good collaborative area where we could work together."

Price has been pushing her staff to use Wikonnect in order to build relationships, not only with the CSC staff but with other CSC customers as well. "We've begun to develop relationships with other [CSC] customers," she says. "I could not have imagined doing that a couple of years ago. As [CSC] customers become more familiar with Wikonnect, I can see it really taking off."

It used to be considered taboo to discuss anything with another insurance company, Price remarks, but today both sides realize they are looking at the same issues. "We aren't looking at it as competitors but as a way we might be able to help each other," she says.

Millennials on the NCFB staff were quicker to respond to Wikonnect than others, who, Price explains, needed some prodding. "We were not afraid to ask [younger staffers] questions because they were familiar with the technology," she says. "Those who were younger and more familiar with the navigation were able to share that with us."

If you are a member of CSC's Wikonnect, you can connect with all other members, according to Myra Frailey, director of Wikonnect for CSC. "We have more than 4,000 users now," she says. "Each one of our products is forming its own community. There are lots of different ways [users] can participate and find people who are like them."

Currently, Wikonnect is a closed community, indicates Frailey. "We are exploring ways where we can have private communities, but we're also looking at ways to open sections of Wikonnect for partners of CSC and partners of our customers."

Frailey thought all the communities would be product based, but now she is seeing groups, such as the vendor's BPO customers, that have created communities to discuss a particular interpretation of something. "It's allowed them to manage and create communities based on the way they think," she says.

To enhance communication externally, Northwestern directs blogs to its independent agency force. "We've allowed for password-protected blogs so we could reach specific groups," says Buss. "It's a good vehicle for [agents] to share ideas and help with some innovative selling techniques. It's a lot like any other technology; there's a group that latches on quickly. I don't want to say it's by age, but it is by comfort level."

Northwestern is interested in exploring how social media can help the company support its relationship with clients and policyholders, according to Buss. "We're investigating those avenues, but since we're in a tightly regulated industry, we want to be careful before we start rolling out things," he says.

Connecting people outside the enterprise is one of the bigger challenges for social networking, indicates Buss. "It's easy to do it in the home office; it gets a little trickier when we want to communicate out to our field force because of compliance and legal issues, and when we want to go out to our policyholders, it gets even more challenging," he says.

Northwestern is investigating some of the technologies that have taken hold since the blogs first started to see how the company might be able to deliver those out to its three primary groups–home office, field force, and policyholders.

Regulatory compliance is an extremely legitimate reason some of the social networking tools are being kept out of the office, contends Salkowitz. "The CIOs are paid to make sure those compliance requirements are met," he says. "On the other hand, what we see in some organizations is the compliance requirements are used as a rationale to be more conservative about the application than they need to be. There's an inclination on the part of the IT department to say it doesn't see the business value of this stuff, so rather than go to the trouble of exploring how to say yes, IT is going to just say no and explain it's a compliance issue."

E-mail had to fight this battle earlier this decade, points out Salkowitz. "In the financial services industry, there were compliance issues around e-mail as late as 2002," he says.

It is easy today to build interactive and rich transactional applications on the Web so customers get a better experience in dealing with your company, suggests Hartnett. "Those aren't really expensive to deploy. But the problem is unless you have the pieces on the back end and have transformed the employee experience, you actually are setting up a situation where you have a decline in customer experience and a really frustrating employee experience," he says. "The knee-jerk reaction would be to say it is easier to invest in the customers because of the cultural change involved in bringing in new technology for the employee base. The initial investment on the consumer side might be a little less, but it's not a simple equation."

Nevertheless, according to Young, the customer-facing side of social networking, especially for insurance and other regulated industries, is scary. "A lot of companies want to engage their customers in a social way but don't feel they can," he says. "At this point, there is no precedent out there, and none of these companies are particularly interested in becoming that precedent."

Piesse sees a massive change in the way people do business–both in buying and how employees work. "We're looking at a buying culture and an employee culture with social networking," he says. "We call it a disruption because insurers are not really the only players [in the insurance space] anymore. We have nonfinancial players looking into financial services–Yahoo, Google, and Alibaba–and these already are doing social networking. This disruption has nothing to do with management; it's an organizational change. If companies don't recognize this, they are likely to find themselves in a world where they no longer exist. It's extremely important companies move to social networking for financial services."

With almost any technology change, Hartnett believes, it becomes a cultural challenge. "Cultural issues in the insurance industry relate to this generational shift," he says. "The older people don't want to see any wholesale changes. The cultural change of managing through that environment where you have to create applications for the newer group of people combined with the expectations of no change for the older people, it gets difficult to balance."

Millennials might relish working for a company that offers the latest technology, but Young disagrees with those who believe employees won't come to work for a company if it doesn't offer those tools. "Even in good times, I didn't believe that was the case, and certainly not now," he says. "If we were to take this to its logical extreme, everything else exactly equal, would a young employee prefer a company with collaborative tools over one that didn't? Probably, but [such an occurrence] is never the case."