A few years ago, I was helping facilitate a resiliency workshop at ITC Vegas. "I'm realizing my peers don’t know what I do," one of the participants shared, "and I don't know what they do. Furthermore, there's no one above us who really understands our work."
That observation stuck with me, and I thought of it again as I read through the results of a global survey of insurance executives from SAS and Risk.net. The survey revealed the same dynamic: a lack of understanding and appreciation of decisions made elsewhere in the business, and of their impact.
This is a problem.
Claims decisions feed into pricing, and therefore risk acceptance practices. Customer interactions hinge on explainable, consistent decisions.
The success of the entire enterprise depends on aligned actions supporting common goals. Decisions made in a vacuum work counter to desired outcomes.
How bad is it?
Nearly one in three respondents to the survey admitted they "don't consider the impact on other areas."
If you and two colleagues were discussing operational decisions, and you discovered one was making decisions with no regard to the impact on your teams, you'd have a problem. Or perhaps you're the third wheel making such decisions. Either way, there's opportunity for better alignment.
Additionally, when broken down by board, business or technology roles, over half of respondents (53%) are both 1) aware and 2) concerned about tech and data decisions that affect financial metrics in their areas.
What concerns me most about this finding is the irreversibility of these decisions. Technology is expensive. Moving people through a technology adoption change curve takes years, and it can be painful. Everyone has lived the impact of the "new underwriting desktop" and the "claims estimation software." People leave jobs over it. Once the check is stroked for that new initiative, walking back a roll-out is no longer an option.
Especially where technology investment is concerned, value matters. Otherwise, time and money are wasted.
What do we do about it?
So how do we find alignment, collaboration and value?
First, get together on the metrics.
When you're debating the numbers, you're not actually moving the enterprise forward. We all know bad data quality hampers decision-making. As do decision-makers who lack command of the numbers. I'd suggest starting by getting aligned on results and metrics — not just what they are, but why they matter to other business units. Go beyond trade combined ratio, premium growth or loss costs. Debate straight through processing rates, quote-to-bind ratios, and average days to claims settlement after first notice of loss.
Eliminating the endless debate on whose numbers matter creates a shared language and clear direction.
Next, Gemba.
The Japanese term meaning "the real place," adopted in the Principles of Lean Six Sigma, encourages us to go to the place where value is created and observe the process.
How many people with an underwriting background have spent any time listening to claims calls? Or volunteered for CAT duty? How many adjusters have worked with an agent to underwrite a risk? Or helped a customer complete a policy application?
This may seem an odd comparison, but White Castle CEO Lisa Ingram famously works the line at her company's restaurants (and expects her leaders to do the same).
Sure, flipping burgers is different than standing next to a customer surveying the wreckage of their home, but the lesson still applies: There is value in feeling the work in person. It's a time commitment, but I promise you: That experience breaks down silos faster than debating priorities.
Last, create space to collaborate.
We're all busy. But without time on the calendar to talk with your peers, nothing will ever change.
In one of my prior roles, the entire executive leadership team for the region I supported got together once a quarter to check in. Not just on progress toward goals, but to spend time together, build trust and have fun. (I got to design a scavenger hunt at a museum and pit teams against one another; the resulting competition was unforgettable.)
Conversation creates accountability, and people are far more likely to follow through knowing there's a date on the calendar when others will expect they report in, especially if they trust and respect their peers.
Final thoughts
Knowing you have a problem is the first step, but it's not enough. You may well already feel the weight of disconnected decisions in your organization. I'd challenge you to ask your peers how they feel about your compass heading. And then commit to making small changes.
As a former leader once shared regarding times of heightened anxiety, change or stress: "We're all on the same side of the ball, so let's act like it. The enemy is out there, not in here."
Franklin Manchester, CPCU, is Global Insurance Strategic Advisor at SAS. You can reach this contributor by sending an email to Franklin.Manchester@sas.com. Opinions expressed here are the author's own.
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