The Wild West of insurance innovation: why pilots seldom scale
…and why HR & L&D teams may hold the answer
There is a sad graveyard that I often find myself visiting, in Ninety’s work in insurance innovation: it’s the graveyard of the never-went-to-scale pilot.
Great insurance ideas. Such potential. Seldom fulfilled. They died too young.
I hear this a LOT. But why is this the case? Why do so many great pilots never make it to scale?
True, sometimes “great ideas” have major flaws: they are undesirable, unfeasible, or non-viable. These shouldn’t be taken to a full market scale. Plenty of ideas quite correctly die at this stage.
But it’s not such ‘failed’ ideas that we’re speaking of here. The kinds of ideas I’m referencing are ones that have been through a full Design Thinking and Lean Startup experimentation process and have been proved to be customer desirable, commercially viable, and perfectly feasible.
Why do we let such great ideas die too young?
Here’s my view: it’s all about people.
Innovation is a fundamentally human, people-based process. It explores the boundaries of uncertainties, the risks of the unknown, and the excitement of the new. At its heart, innovation is a creative risk management process.
And so, if you accept that innovation is all about people, then the success of innovation is more down to the people involved than the idea itself.The success of innovation is more down to the people involved than the idea itself. Click To Tweet
“People > Idea.”
I find a Wild West metaphor* helpful here: Pioneers, Settlers & Sheriffs.
Let me tell you a story…
When the Wild West was being explored, three types of people were involved.
First, the Pioneers: they looked West with hunger, impatience, and insatiable curiosity. They were comfortable with the unknown and itched for new experiences. Very little could hold them back, and so they boldly went West, exploring the unknown and making new discoveries.
Happening, one day, upon a perfect site for a settlement, the Pioneers cut a few trees and quickly built a basic shack – a sign of the ‘promise’ the site held. The views were great, the water supply ample, and natural resources abundant. But the West was calling, and it wasn’t long before their curiosity drew them ever-onwards, over the next unexplored horizon.
Next, the Settlers: these hard-workers weren’t comfortable with the unknown, and so they waited until the Pioneers set off, letting them blaze the trail. Once that trail was blazed, though, and the report came back of a perfect settlement site, they picked up their tools and went off, eager to build the settlement. Arriving at the site, they chuckled at the Pioneers’ basic shack, quickly knocked it down, and set about marshaling resources, organizing themselves for construction, and building a proper settlement.
Over many months, the Settlers worked hard, and built out a full settlement, with roads, buildings, and administration facilities. Then they downed tools, sent word back down the trail to those they had left behind, and wondered what next. At that moment, a message came back from the trailblazing Pioneers, who had found a new site to settle. The Settlers picked up their tools and headed off down the trail.
Last, the Sheriffs: these organized individuals don’t tend to explore or build things, but they’re great at overseeing things that already exist. When the report came back from the Settlers, announcing the readiness of a new settlement, one of the Sheriffs set off immediately and set about organizing and running the new settlement.
For years thereafter, the Sheriff ran the settlement well, maintaining law and order, and collecting taxes. The settlement thrived under the Sheriff’s leadership and became a vibrant, populous town.
End of story.
What does it mean in innovation
Let me translate this back to our day-to-day of insurance innovation:
- Pioneers: these are typically those we see as ‘innovators’, running experiments, proposition design work, or customer labs.
- Settlers: these are typically the change teams, often consisting of IT, operations, claims, project management, or regulatory compliance.
- Sheriffs: these are typically the BAU responsible ‘heads of’, often P&L owners or function leads.
The settlement site is a new business opportunity, and the ‘quick shack’ is the MVP or pilot.
Very often, in our innovation work with insurers, we find that innovation failures are down to how these three roles interact. The two most common examples of these failures are these:
- “The pilot still has not been scaled”: this is usually caused by Pioneers having left the Settlers behind, or – worse – having deliberately stopped them from coming up the trail behind them (a bit of a ‘we know best’ arrogance?). The best way of avoiding this problem is to promote awareness of the importance of the other teams and to consciously ‘take them along’ on the journey.
- “Nobody’s interested in my idea”: this is usually caused by the Pioneers not having taken a ‘brief’ from a Sheriff. When this happens, the Pioneers discover ‘settlement opportunities’ that no Sheriff is interested in running. Hence the lack of interest. The best way of avoiding this problem is to strongly connect the Pioneers to the Sheriffs and to make sure that the insurance innovation portfolio is aligned to Exec priorities.
Lessons from the frontline
In our 123 Framework™ for insurance innovation, we solve these issues by having a structured approach to how we engage/deploy each of the Pioneers, Settlers, and Sheriffs. Some tips we’ve learned the hard way, are offered here as something of a ‘framework’ for building effective innovation teams:
- We’re careful about letting the P&L owner or sponsor initiate the process.
- We’re protective of letting the creative innovators unleash their creative spirit early in the ideation phase.
- We’re deliberate about bringing the change/ops / IT / regulatory teams on the journey, from surprisingly early on. (Avoids ‘not invented here’ syndrome, in our experience.)
- We’re clear on the P&L owner or sponsor being the one making the go/no-go (or pivot / persevere) decisions after each stage.
As you build your own innovation teams, think long and hard about the roles you need; when you need them involved; how to hand-off; and how to ensure each role is valued.
My personal proclivity is that of a Pioneer. And so I look for the Settlers, and I search for the Sheriff. Without these critical roles, and without mutual understanding/appreciation, and effective handoffs, my ideas are doomed, no matter how good.
And here’s where we think that HR has an essential role to play: these are the “people people”. They should be better than anyone else at making sure the right skills are recruited, that individuals are helped to understand their personality types and tendencies, and that effective team structures are understood and enacted.
If you’re reading this piece on innovation in insurance, chances are you’re a Pioneer, too. Like me, you probably need help getting this right. And so I’d suggest you arrange an urgent conversation with your HR business partner. A few thoughts to discuss with HR:
- How do we identify team members with the right personality types?
- How can we organize teams based on an optimum Pioneer / Settler / Sheriff mix?
- How do we build mutual respect between Pioneers and Settlers?
- How can we get the Sheriffs to give clear, concise briefs?
- How do we get Pioneers to ‘let go’ of their exciting new idea?
- How can we encourage Pioneers to embrace an idea that someone else developed?
- How should we build this type of profiling into talent recruitment?
HR has a critical role to play in facilitating effective innovation. Whilst it’s not rocket science, it certainly is people science.HR has a critical role to play in facilitating effective innovation. Click To Tweet
In innovation, as any VC investing in startups know well, even the idea plays a second fiddle to the effectiveness of the team. Time to get on the phone to HR.
* Note: my Wild West metaphor is shamelessly adapted from Wardley’s excellent “Pioneers, Settlers and Town Planners“ metaphor (https://blog.gardeviance.org/2015/03/on-pioneers-settlers-town-planners-and.html), a derivative itself of Cringely’s “Commandos, Infantry and Police” metaphor in his 1993 book, Accidental Empires – https://www.amazon.co.uk/Accidental-Empires-Silicon-Millions-Competition/dp/0140258264