For an industry that frequently decries the view of its product as a commodity and talks about the v...
For an industry that frequently decries the view of its product as a commodity and talks about the value of innovation as a differentiating factor, the insurance sector has a fairly weak grasp of the processes - and I mean processes - that lead to the generation of new ways of thinking.
There's a belief in the insurance industry that innovation is just another name for the 'Eureka!' moment - that sudden and unexpected flowering of enlightenment. This is, after all, the popular perception of the birth of new ideas.
Innovation, contrary to its portrayal in history books, is not just about lone mavericks and sudden insights, it is about the culture of an organisation and the processes its management puts in place. Innovation is not something that happens by accident - it has to be nurtured and designed.
In structural terms, our industry has some inbuilt impediments. Innovation carries risk and we are, by nature, a risk-averse industry. Also much of our business is intermediated, which often requires that two parties think something is a good idea before it finds its way to market. While this does not equate to halving the chances of success, it does present us with an obstacle to innovation.
The Financial Services Authority's regime will have the short-term effect of forcing us to innovate with our own inner workings as we get to grips with regulatory requirements. This is no bad thing and exemplifies how innovation can be as much about workflow as about new products or markets.
Truly innovative organisations re-engineer their own structures so that new thinking is encouraged and becomes a planned end-result. That requires a range of modifications, ensuring you have sufficient resources to nurture ideas, building ideas generation processes, educating staff to understand their role in innovation, focusing on factors such as leadership, gathering momentum - the score-carding of new thinking. It is tangible processes like these that transform innovation from something that flowers as infrequently as a rare tropical plant to an integral part of a business.
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