By CYRIL TUOHY, managing editor of Risk & Insurance®
Little more than a year ago, Jon Bidwell, then recently minted Chubb Group of Insurance Cos.'s new chief innovation officer, was given his marching orders: Increase the speed, pace and certainty of profitable outcome of products and services sold and distributed by Chubb's global network of 10,000 employees.
Then came the deadline: Bidwell had about 90 days to put in place the infrastructure. It was a daunting task.
"Half of that challenge was to see if we could actually do it," said Bidwell, a veteran underwriter with 26 years of service at the company.
The speed of the of initiative was considered revolutionary for Chubb, an old-line carrier known more for thoroughness and top-quality service than for its quickness of execution, and to pull it off was going to mean some important internal changes.
"It actually required us to do things very differently than before, so it was an innovation in and of itself," recalled Bidwell.
The basis for getting the project under way was a good one. Management suspected--rightly so, as it turned out--that Chubb's thousands of employees were in a much better position than an executive committee sitting in an office back at headquarters in Warren, N.J., to decide which products, services and processes Chubb's clients wanted.
Within 30 days of setting up the IT infrastructure to solicit input, Chubb had generated 607 ideas. Some ideas were as simple as a three paragraph e-mail, Bidwell recalled. Others were much longer, stretching out to entire documents, annotated with comments from colleagues halfway around the world.
"What we found was a lot of ideas that came out that people had, many had the elements in their heads, and had wanted to do it for a long time but could not find an outlet, and could not find funding," he said. "These are relatively small denomination investments in a world where we'll spend $100 million on an IT system, but they're getting crowded out."
THE TOP TWO DOZEN
Six weeks after the deadline for soliciting ideas, Chubb's managers had knocked the number down from 607 to two dozen, and employees submitting the top 24 ideas were each allotted 15 minutes to pitch their concepts.
Within hours, cross-disciplinary teams of managers had voted on the ideas that were most likely to be funded, and those ideas were presented to the carrier's venture capital team for funding.
Less than two months later, the venture capital team had voted on and approved funding--for up to $1 million per idea--on the most promising and compelling concepts, said Bidwell.
The first of these ideas was launched two months ago in July and will be in the marketplace by either late this year or early 2010, with the next batch of successful ideas introduced to the market shortly thereafter.
"We've already got a portfolio of ideas that we can keep mining, and now we're actually rolling it out in other areas of the firm with more focused events to keep doing the same thing over and over to get this pipeline built," said Bidwell, adding that Chubb would continue with the program.
The money is enough to fund the ideas for the first two years, assuming the projects meet their milestones, and Chubb then plans to transfer the budgets to individual business units. The idea, he said, was to bypass the traditional process of vetting ideas through traditional business units beholden to typical budget cycles.
The idea seems simple, "but the way most companies are run, it's fairly radical," the chief innovation officer said.
Bidwell opined that the biggest barrier to innovation in the insurance business is neither a lack of ideas nor an absence of will but the ability to execute. The point of this latest Chubb initiative is to build a better ability to execute.
"I know I can go out to 10,000 people or a smaller relevant group of experts on something, and within three months go from the seed of an idea to a fully fleshed-out business plan, and I've got the money to put behind it. I'm going to beat everybody who's out there, I don't care," said Bidwell. "People have copied contracts forever, but if you've got a far better capacity to execute, you win."
September 15, 2009
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