Over the past few years it seems you couldn't pick up a magazine, go to a conference, or even go to your own organization's board meeting without something being said about the need to be more innovative. Everyone's asking: Are we as innovative as our competitors? What are we doing about being innovative? How do we get some of that innovation stuff?
This author even jumped on the bandwagon by recently writing a column about successful CIOs that indicated how important the need for innovation was. However, after writing the piece a little handwringing ensued over what innovation really means, or perhaps should mean, to CIOs in the insurance industry.
Let's start by defining the term, or more precisely by using a definition that hasn't been made up by consultants or vendors. According to the Merriman-Webster dictionary, innovation is defined as follows:
in·no·va·tion noun \ˌi-nə-ˈvā-shən\ : a new idea, device, or method : the act or process of introducing new ideas, devices, or methods
That seems simple enough. By that definition it seems like a pretty core part of what any CIO in the industry should be doing, past or present. And that's the point. Innovation isn't something new.
[Previously from Petersmark: Leadership or Disruption: Which comes First?]
For those of us who have been fortunate enough to be in the industry for some time, and who have even had the opportunity to run IT divisions, innovation has always been part of the job. It was a natural outgrowth of restricted budgets, problematic hardware, bug-infested software, and never quite having the kinds and numbers of resources required to really do the job. The answer to all those quandaries was to dream up other ways to get the job done – including new ideas, devices, or methods. . Any CIO worth their salt has always been the Chief Innovation Officer in their organization out of necessity, not because it's the management concept du jour.
The fact that it is the management concept du jour says something much more about the insurance industry than it does about its CIOs. In short, innovation is important to the industry now in the same way that underwriting profitability become important in the wake of lost income from investment portfolios, or that big data has emerged as a way to leverage an under-utilized asset that's already been capitalized.
Innovation, and the process change that accompanies it, is part of a past-due bill the industry needs to make good on at a time where its customers, agents, and employees, all have higher expectations about availability, communications, service, ease of doing business, and responsiveness.
It would have been better had the industry anticipated many of these societal and demographic shifts and proactively planned accordingly, but that did not happen. Instead, innovation in all its definitions and permutations has been thrust upon the industry as a matter of survival, and more ludicrously, as a way to celebrate and give awards to carriers and people for attaining some subjective level of innovating. Really.
And that brings us back to what CIOs can and should do about innovation. Let's turn down the hype level and concentrate on what good CIOs have been doing their entire careers – getting things done that add value to their organizations. And in most cases, not necessarily making that big of a deal about it as it was just part of the gig.
However, if it helps a CIO, or a carrier, or the industry, to change the perception that policyholders, agents, and employees have about their ability to compete in a technologically competitive world by placing a special emphasis on the notion of innovation, then so be it. Most savvy industry CIOs will leverage this prevailing sentiment by simply doubling down on their modernization and process-change transformation efforts. If they're doing that with any success at all, they're innovating!
About the author: Frank Petersmark is the CIO Advocate at X by 2, a technology consulting company in Farmington Hills, Mich., specializing in software and data architecture and transformation projects for the insurance industry. As CIO Advocate, he travels the country meeting CIOs and other senior IT and business executives at insurers, learning about their goals and frustrations, sharing lessons learned, and offering strategic counsel. Formerly Chief Information Officer and Vice President of information technology at Amerisure Mutual Insurance Company, Frank has more 30 years' experience as an information technology professional and executive.