“Work Smarter, Not Harder:” Marsh’s Pieroni Talks Innovation

It used to be normal for companies to spend 80 years on the S&P 500. However, Bill Pieroni, global COO of Marsh, Inc., noted in his keynote speech at the 2013 Insurance & Technology Elite 8 Executive Forum, held at the Trump Soho hotel in New York last night that today the reality is closer to 15 years.

Businesses are more likely to shrink or go bankrupt in an increasingly unforgiving market, Pieroni said. And, he contends, this is especially applicable to insurance, which is now what he described as a "hyper-mature" industry in which customers worry less about brand names and more about cost. Companies will have difficulty differentiating themselves among competitors, so it is crucial for them to innovate to remain successful.

[Insurance & Technology Elite 8s are noted innovation agents in the industry. Read how Amica’s Peter Moreau Innovates with Local Pride]

While many businesses associate innovation with implementing new technologies, Pieroni explained that they must first consider company goals and how those objectives align with the marketplace. IT matters, but it must be used in the context of purposeful investment: “If it’s not in line with what you’re trying to accomplish, it doesn’t matter,” he said.

Effective innovation is difficult to achieve – about 65% of innovation efforts fail, while only about 30% meet expectations and 5% exceed them.

A primary reason behind innovation failure is the choice to make small, gradual changes as opposed to big ones, Pieroni asserted. Most organizations use traditional strategy execution, which involves incremental, not disruptive, change.

“To live you need to incrementally change, but to thrive, you need to be innovative,” Pieroni said.

To inspire the big ideas that will lead to “real change,” take on an external perspective, he recommended. Look at your company from the outside in, and compare it to businesses that will be future competition, because those are the ones to watch. Focus on employee strengths, consider outside forces, think in a long-term mindset, and take on a creative approach to inspire innovative ideas. Encourage employees to think outside the box, as innovation can come from anywhere within a business.

Innovation can also derive from strategically using big data, especially in financial services, Pieroni explained. With data, businesses learn more about customer preferences, then improve customer experiences and implement target marketing. It also provides insight that will help business efficiency and product innovation. Companies can garner helpful data from transactions, machines and sensors, emails, documents, and social media.

Ultimately, innovation is not just about hard work, Pieroni said. Working harder is easier but leads to downfall in the long term. To survive, he concluded, businesses must combine their strong work ethic with innovative strategies.

Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio