Greetings from Massachusetts, where I’ve just completed a series of face-to-face interviews with several technology and business executives at MassMutual for an upcoming Carrier Confidential feature.

The Springfield, Mass.-based carrier is in the midst of an ambitious and far reaching technology transformation effort and while the nuts and bolts of that initiative (including SOA and ECM implementations) dominated many of the conversations, MassMutual’s technology leadership made sure that the topic of workplace culture was discussed as well.

In part to facilitate the kind of collaboration and cross-department outreach that is needed to support these large technology and process transformation, MassMutual has taken time to reassess its work environment. And in two specific programs, says Rich Pedersen, MassMutual’s corporate vice president and division head for US insurance group systems, the company has completely changed it workplace layout to address those needs.

“We’ve changed completely the lay out of the room [in these cases]. There are big open spaces and big overstuffed chairs,” Pederson says. “It’s a much more conducive place for creative work and for doing that out-of-the-box type thinking.”

Also as part of that effort, IT and business workers were co-located in the same space to facilitate alignment between the two groups. Overall, the goal is for open spaces and non-hierarchical seating. “You can see from one end of the room to the other. It’s that open, expansive kind of feeling and it’s just a different way than [how] a traditional insurance company might have approached it even five years ago,” Pedersen says.

As someone who has worked in both stuffy, uninviting workspaces and in more open, collaborative areas (the I&T offices share much in common with MassMutual’s new spaces, although I wouldn’t mind a more “overstuffed” desk chair.) I believe that these efforts are more important than most realize.

If you treat someone like a cubicle monkey, don’t be surprised when they act like one. And, on the other hand, when you place your intellectual capital in a collaborative environment, don’t be surprised if you start to see better partnerships formed and more innovative ideas.

“It’s a move away from that expected conservatism towards a more collegial environment,” explains MassMutual deputy CIO Bob Casale. “People seem to respond well to that.”

It’s just a rhetorical question — of course insurance is sexy. But just how sexy is it? Very, according to Sean Bourgeois, the founder of Sexy Insurance, which he characterizes as “the world’s first international social networking site for the sexiest industry on the planet.” Perhaps sensing that it’s also the most cheapskate industry on the planet, Bourgeois’ blurb adds, “100% free. Put away your credit card.” What makes insurance so sexy, according to Bourgeois is that “it’s a big industry, it has lots of money and the financial centers it operates out of are pretty sexy—London, New York, Bermuda.”

He left out Hartford, Des Moines and Omaha, but you get the picture. Speaking of Omaha, if you scroll down at the Sexy Insurance homepage you’ll see a portrait of Warren Buffett with a thought balloon saying, “I’m so sexy it hurts.” Bourgeois could have left out the words because, frankly, it’s written all over Warren’s face. Who can deny it? If Henry Kissinger is sexy, Warren Buffett is doubly so. What the site needs is a picture of Hank Greenberg saying, “I’m so sexy it hurts Eliot Spitzer.”

As Bourgeois emphasizes, insurance’s sexiness is of an understated kind. Other industries, such as Hollywood and professional sports, clearly have more superficial sexiness. In all fairness, I&T is not likely to publish a swimsuit Elite 8 issue any time soon, as attractive as many of our honorees undoubtedly are.

The point of the site, after all, is for those who know that they belong to the sexiest industry on the planet to interact. Social networking, if it makes sense at all, makes sense for just about any industry. However, it may make more sense for insurance than other industries, Bourgeois suggests. “Insurance is a very sociable industry and its interactions are often informal,” he says. “One of the purposes of the site is to help facilitate those interactions.”

Though Sexy Insurance is open to anybody in the insurance industry, Bourgeois thinks that the site may have even more appeal for insurance technology executives. “Being tech savvy to begin with, I’d hope they appreciate the site,” he notes. “They are probably well versed with Web 2.0 and what social networking is about.”

That may be a rash assumption, given the stunned reaction of attendees at I&T’s Executive Summit to keynote speaker Todd Masonis, founder of Plaxo. However, maybe insurance technology people are ready to adopt a social networking site that deals with their professional realm. Social networking gives participants an opportunity to share “war stories,” as Bourgeois’ site suggests, and getting to know a lot of people can be good for one’s career. The site has only been up for a couple of weeks and some guy in Georgia has already managed to find a job through interacting with another member.

Having been raised by Scottish parents, I found the membership fees of Sexy Insurance consistent with my family values. I’ve gone ahead and joined up (I’m the guy holding the big fish), making Sexy Insurance even sexier than it was yesterday.

If I've learned anything from the many conversations I've had and heard here in Orlando at CSC Future Focus 2007, it's that insurers are aware of the potential dangers that baby boomer retirement could bring to their enterprises.

Most of those conversations -- including one during part of a panel discussion with Steve Forte of Gartner, Chad Hersh of Celent and IBM's Carol Stafford -- have revolved around retiring IT workers and the recruitment of young college graduates to replace them. Meanwhile though, similar turnover threats have not been widely discussed when it comes the CIO position.

June Drewry, Global Chief Information Officer for the Chubb Group of Insurance Companies, addressed that topic on Monday afternoon in Call to Action: Mentoring the Next Enterprise CIO. "At some point, if this isn't our primary job," Drewry said of grooming future CIOs, "then we're going to retire and we're going to leave the company high and dry."

Historically, outside recruitment has been a key approach to filling leadership roles in the industry, but Drewry says that continuing with that method could prove troublesome. "The demographics indicate that recruitment will be a much more difficult option in the future. The next generation of leaders is much smaller in size," Drewry said.

Drewry told the audience that internal staff need to know that the top job is not closed off to them and urged CIOs in attendance to reassess their priorities when they return to their offices. "Think about how much time you put towards your customers, how much you put towards learning and your outside network, and how much time you put towards developing your senior team," she urged.

The Chubb CIO suggested that a more developed and empowered senior team could allow a CIO more time to focus in those other areas. "The more all the rest of that work you'll be able to get done," she said. "I ask you to go back, reassess and give your top priority to developing that competitive advantage -- your staff."

Developing future leaders in IT will require relinquishing some control today. At some point, CIOs can inadvertently obstruct leadership development by doing too much. "We need to get out of the way so [future leaders] can grow on their own," Drewry explains.

A more federated model can help, Drewry believes. In insurance, that requires a company to organize itself by strategic business units (SBUs), which in turn creates CIO positions within each SBU. As a result, senior IT leaders can take ownership of entire projects and initiatives within their unit, earning valuable experience.

"We as CIOs would no longer be responsible for making decisions or setting the strategy. We would be responsible for creating the environment within which everyone can accept responsibility for these tasks. The entire senior leadership team comes to the table and is held accountable," Drewry explains.

Such a system also allows for better business alignment. "IT eventually becomes one more proficiency within the business unit. When the senior team [in a specific SBU] is gathered, IT is a part of it," she said. And that's important, if future enterprise CIOs want to retain the 'seat at the table' that their predecessors earned.

Many present day CIOs have earned involvement in top-level business conversations and have even picked up some non-IT responsibilities within their organizations. "It's my observation that these 'seats' were earned by particular people, not by the IT function," Drewry related. "As a result, as CIOs retire, IT is apt to lose those functions unless we groom our successors to be natural replacements in these areas."

Broad knowledge across an organization is also something that carrier's will look for in a future CIO. That can be a tough skill to development, even within the SBU model, because individual business groups are often hesitant to let their IT leaders accept an assignment elsewhere in the company.

"Building that enterprise wide experience is a tough one, but it's well worth it," Drewry said. "People who have that experience are more prone to be considered when that next big job comes up." She suggests rotating senior IT leaders in different SBUs, such as by periodically asking a senior IT leader within a business unit with applications responsibilities to fix an infrastructure problem, or vice versa.

"Let's have someone other than the infrastructure person lead that project, as a learning experience," Drewry explained.

The overriding theme throughout Drewry's speech was stepping out of the way. She described today's CIO as a large oak tree with far reaching branches that block the sun and subsequently stunt the growth of smaller trees residing underneath it. While it may be easier for a CIO to assume all responsibilities, such an approach will stifle the growth of future leaders.

"This is much harder than doing it yourself, but it's the only way, I believe, that you can grow people in this area," Drewry said.

I spent yesterday morning at Google's Industry Press Day, held at the company's new(ish) NYC building where, aside from checking out the office space, I attended presentations by Tim Armstrong, Google's president of advertising & commerce in North America and Jon Kaplan, the company's industry director for financial services.

More importantly though, let me tell you that Google's office is populated with many large exercise balls, free food and drink areas and Razor scooters. In fact, outside of many meeting areas there are racks build specifically for scooter parking. That last tidbit I particularly appreciated -- New York's lack of on-street scooter parking has grinded my gears ever since the parking authority towed my Razor Scuttle Bug from a fire zone outside a Starbucks on 6th Ave. (I was just running in for a second to pick up a latte!).

As for the presentations, both were mostly focused on marketing and advertising concepts but there was still very applicable takeaway for IT, particularly in Kaplan's financial services breakout session.

Kaplan pointed to some March 2007 Nielsen NetRating numbers that showed nearly 63-percent of all financial services-related Web searches are made via Google, a number that is 7-percent larger than Google's overall search engine share.

Also, internal Google data showed that insurance companies, on average, spent $2 million more in the first quarter of 2007 than in the same quarter of 2006 (and they're seeing substantial growth in clicks over that same time period).

While all that may be more useful to your advertising and marketing partners, it does provide further evidence that there are opportunities to expand an insurer's brand awareness and reach new customers in unique and sometimes extremely successful ways.

TurboTax, for instance, made a bold move last tax season when it leveraged YouTube (a Google property, if you've been living under a rock) in its Tax Rap marketing project. The tax preparation software company asked users to submit tax-themed rap videos and offered a $25,000 grand prize to the best entry.

Seeing as how Vanilla Ice -- who 16 years ago was a one hit wonder rapper and 10 years ago was a crazy washed-up rapper -- acted as its pitchman, the contest could have turned out to be an exceedingly brilliant marketing ploy or extremely embarrassing hit to TurboTax's reputation. When YouTube's natives, skeptical of any and all things corporate, believe an initiative is contrived or -- even worse -- utterly and completely lame, they can turn on a company very quickly.

The TurboTax initiative, however, generated a mostly positive response. Kaplan says that 370 conetst entries were submitted and 40 million ad impressions were generated for TurboTax. 700 blogs and newspapers mentioned the contest.

That's some priceless buzz generated by leveraging a Web 2.0 technology -- an effort that would likely involve some IT input and involvement with a marketing plan. As insurers talk more and more about multi-channel distribution and reaching customers through different mediums, perhaps we will see a carrier take a similar chance with a YouTube project. Considering the site sees 51 million unique US visitors every month, there are certainly reasons to take the plunge.

This afternoon, I ventured 20 blocks uptown from Insurance & Technology's offices to attend the 2007 Gartner Financial Services Technology Summit, at the New York Marriott Marquis. And contrary to popular belief, I went for more than just the free lunch.

Between meetings--including a very interesting one with ITM, a player that's gaining interest amongst insurers--I was able to attend a few track sessions, namely one directed by Annemarie Earley, managing vice president, insurance industry advisory services, Gartner.

Earley, who spoke on “Balancing Innovation and Proven Practices for the Insurance Consumer,” told attendees that an insurer's ability to innovate is largely dependant on its level of risk acceptance and organizational cultural change.

“It's a cultural shift, not a technology shift,” Earley told the audience. “I wouldn't want you to believe that you can go back to your office tomorrow and start innovating. It's a longer process than that. You have to have the right infrastructure, the right commitment from senior level people and the idea of what it is that is important to the fabric of your organization that may require innovation.”

In order to innovate, some risk needs to be involved, Earley says, and that acceptance of that risk needs to be a part of company culture. “Don't go wild and accept any ideas that come down the pipe. You have to understand your risk appetite,” she explains.

Earley did mention a few technologies that could help support innovation, such as business intelligence, modeling and analytics, but also cautioned against implementing new technologies specifically to increase innovation.

“Use what you have. You get so invested in the new technology that you can forget about the innovation and creation,” Earley says. “Be more creative with the innovation part, and less needy with the technology part.”

From an organizational standpoint, Earley pointed to Humana, the Louisville, Ky.-based health insurer with recent innovations such as real-time claims capabilities. Humana has an innovation team with dedicated employees. However, twice a year, someone from the innovation team is moved to the business team for a six month period and vice versa.

“It's not a complete move. It's just one or two people, so that innovation staff members understand the business and can replicate and design in a way much more in tune with what is need,” Earley relates.

Further, business team members gain insight into the processes the innovation team goes through, such as efforts to create a business case for a given project--helping reduce animosity on the part of the business team members who may believe that the innovation team has little day-to-day work. “That's really not what the [innovation team] environment is like, but that's what people think. It takes the mystique out of the innovation team. When you move them in and out of that environment, the jealousy-factor goes away. Misconceptions of what happens are changed.”

To finish the presentation, Earley left attendees with several recommendations, such as taking on innovation only with a commitment from management, making sure your understand your company's own appetite for risk and making a good business case for every new idea.

Posted by Nathan Conz

Insurance & Technology: The Blog is on the way!