By DAN REYNOLDS, senior editor of Risk & Insurance®
You might say big companies and the scale of their operations are the places where innovation goes to die. You can't take the focused, potent ideas developed by a smaller company and scale it to the needs of a larger entity.
Not so. As we parsed the nomination materials of dozens of organizations and individuals for our second annual Risk Innovator award, we found plenty of large companies with more than enough innovation to go around.
Marsh, ACE, FM Global and others right along with them are not only innovating on a grand scale but providing a receptive environment for innovation on the part of their employees and their company officers.
We gave Dr. Archibald Tewarson a Risk Innovator award for his relentless pursuit of better ways to retard the ignition and spread of flame in plastics. But how far would Tewarson have gotten without the resources of FM Global, where he has worked for more than 30 years?
How far would he have gotten without corporate clients like General Motors, now in ruins, perhaps, but once of a size that gave him an opportunity to test his fire-retardant theories and materials in a multiplicity of industrial environments?
Tewarson graduated from Penn State University in the early 1970's with a doctorate in physical chemistry. Environmentalism and consumer protection were just emerging as fields. He could have gone anywhere but he went to FM Global and there he has stayed, doing ground-breaking work that has and will make many of us much safer.
What about Jeff Alpaugh? The planet-trotting global real estate practice leader for Marsh turned our heads with his exhaustive contacts and knowledge of the industry he works in. When a downturn rocked both the commercial and the residential real estate markets, it didn't take years for Alpaugh and Marsh to come up with solutions that give real estate companies options as they rearm for the next upturn: no, it took Alpaugh five months to bring a middle market solution to market in collaboration with yet another large company, Zurich.
Why? It's because of the scale that Alpaugh operates on. Many of the risk managers he works with work for large companies that touch enough of the market to identify where the significant trends are and where products are needed.
Bill Hazelton, another Risk Innovator winner in the construction and real estate category, works for another big company and his concepts are being tested on a large scale. That company is ACE USA, a division of the mammoth Zurich-based insurer ACE.
Without the resources of an ACE, how could Hazelton stay on the road the 40 weeks per year that he needs to visit risk managers in his field, to listen to their concerns and help to develop the necessary products? It was Hazleton who was able to use his position in a large company to unleash a team of ACE professionals to devise partnerships and products to help contractors take advantage of the government's financial stimulus package and learn green building techniques and regulations. That's operating on a grand scale.
In the realm of research and innovation, larger organizations easily win over smaller ones everywhere you turn.
Human resources: Big companies have the manpower to divert one player or a set of players to attack an issue and or develop a concept.
Networking: Big companies can pool resources of a truly global nature to educate their point men or women on what customers from a variety of landscapes are seeing and needing from an insurance perspective.
Stability: Tewarson is just one case in point, but big companies, well managed over time, can provide a safe harbor for an exceptional individual or group of exceptional individuals to take root and blossom.
Innovation on a grand scale requires resources, courage and vision--drawing more water from the well. But it also irrigates a much larger field from whence the crops of knowledge, wealth and progress grow.
(To read the Counterpoint to this by Managing Editor Cyril Tuohy, click here.)
September 15, 2009
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