Invisible Man on Third…

I was wandering around my yard after dinner the other night, half-heartedly taking inventory of the garden chores I had been dodging, when I noticed some kids playing kickball across the street. There were six of them, three per team, and they were pretty good kickers, so they were doing a lot of base running. I chuckled when the tall kid standing on third base yelled "Invisible man on third!," at which point the base runners on first and second and the kids on the other team watched intently while he jogged to home plate to kick. Bases loaded, invisible man on third! I hadn't heard that proclamation for a long time, but if you have ever played kickball, stickball, baseball or softball with teams of three or less, you know all about the invisible man.

For some reason, that kickball game got me thinking about invisibility as a attribute in planning and operations and personal behavior. In certain circumstances, as in the small team base-running scenario, it is an operating imperative as the game can't proceed unless the invisible runner rule is invoked. Invisibility is the goal of many corporate security protocols, to protect sensitive information, to preserve privacy and confidentiality, and to shield intellectual property from attack or discovery. It is the intended product of stealth functionality, to camouflage activities while providing cover or anonymity. It can be an element of a individual's operating model, or a preference, as when someone acts behind the scenes or tries to avoid visibility or to otherwise conceal their activities. And sometimes it emerges as an incidental factor in a program or project, usually through negligence or inadvertence, when folks aren't paying attention and ownership, accountability and decision rights don't get clearly established.

My first encounter with a corporate version of the invisible man came decades ago while I was working as a claims supervisor for a large insurer in Massachusetts. I remember the claims supervisor job as a tough one, largely because the supervisor was responsible for monitoring and directing a hefty and constantly shifting portfolio of claims toward timely and appropriate resolution. Theoretically, the supervisor would assign the claims to claims handlers who moved them through the phases--investigation, evaluation and resolution--but sometimes there just weren't enough claim handlers available to handle all the claims. Turnover, training, vacations, hiring freezes, an increasing volume of new claims--any one of these things could create a situation where there were too many claims and not enough claim handlers. The solution? At that particular company the solution was Mr. X, who had a diary number and carried a large caseload of slow moving claims reassigned from other claim handlers. Every claims supervisor had a Mr.X on staff. He was imaginary and invisible, so he wasn't able to accomplish anything on the claims, but the reassignments to Mr.X created workload capacity so the real claim handlers could handle more new claims. Mr.X was an operating imperative.
 
Years later, I bumped into Mr.X's cousins at a third party claims administrator in New Jersey. The TPA had guaranteed their clients that claim workloads would not exceed a certain number per claim handler. As the end of the month approached, if workloads were higher than promised the TPA claims supervisors would reassign claims to themselves or to their office manager to reduce the claim handler workloads to the agreed number. This was done for stealth reasons, to conceal actual workload levels. Of course the supervisors and manager weren't imaginary or invisible, but they may as well have been since they did not actually work on the claims assigned to them. They were simply placeholders until after month end, at which point the claims would be reassigned to the claims handlers.

Radio and TV journalist Richard Harkness is credited with drafting this definition of a committee: "A group of the unwilling, picked from the unfit, to do the unnecessary." While I think that characterization is a bit severe, I have probably been on too many committees, so I believe it is fair to say that most committees have at least one member who fails to attend meetings and contributes little or nothing to the committee's work. That's awkward enough, but when the invisible committee member also happens to be the committee chair, it is even more awkward. I remember working on a committee in New York where the chair would schedule a meeting, then miss the meeting at the last minute because of a vague, recurring malady he described only as "man flu." The committee would meet without him, cover the agenda, provide him with the minutes, then he would schedule another meeting, and at the last minute...well, you have probably lived this dream yourself. He was an absentee committee chair, he took credit for the committee's work, yet he never contributed anything to that work.

I have seen the same type of incidental invisibility in large scale technology development and/or implementation projects, where it is frequently difficult to determine who, if anyone, actually "owns" the project. I always ask two questions: 1) Has any one person actually been tasked with setting direction, managing obstacles and making decisions on the project? 2) Is there a real person who knows and understands he/she will be held responsible and accountable if things don't work out as expected on the project? It is usually easy to identify the project sponsor, and the steering committee, and the subject matter experts, and the IT folks who are managing the project, but the project owner is often not visible. Why? Either project ownership responsibility was never specifically assigned or, more likely, ownership was assigned to a committee. Psychologist Will Schutz was no doubt thinking of something else when he wrote this, but he did a good job of describing the inevitable, unfortunate outcome when an owner-less or committee-owned project fails to meet expectations: "Everyone is responsible but no one is to blame."

It is even worse when the wrong person or department is identified as the owner. I think it is crazy for Human Resources executives to own an employee engagement project, for example, or for IT executives to own a technology development or implementation project. These are business projects, and they should be owned by the business leader who convinced the organization that he/she had a problem or an opportunity, and that the project was the solution. Sure, HR and IT are there to assist, to provide expertise, structure, oversight, and maybe even project management, but the business person owner needs to remain visible, responsible and accountable.

Jonathan Lethem made a point about invisibility in his book Chronic City: "The invisible are always so resolutely invisible, until you see them." That's true in business and in life, I suppose, but no matter how hard you try, you'll never be able to see the invisible man on third.  That's just the way it is.

Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert and advisor on Property Casualty insurance claims and operations. He can be reached at dean.harring@theclm.org or through LinkedIn or Twitter.

Innovate or Die. Really?

I have been thinking and reading about innovation recently, and I must say there certainly is no shortage of material on the topic—much of it with a critical slant.  That may surprise you, since no matter where you work I am sure your organization talks about innovation, believes it is already innovative, or at least plans to become innovative. Why?  Innovation is a trendy concept, it sounds cool, cutting-edge and entrepreneurial. Business schools have embraced it, and consultants have built practices around it. More importantly, many people believe the phrase “innovate or die” is absolutely true and that it applies to all businesses. So, as Dennis Berman points out in the Wall Street Journal: “Most CEOs now spray the word "innovation" as if it were an air freshener.”

William Taylor, co-founder of Fast Company magazine and blogger on the Harvard Business Review Blog Network, described it this way in his 12/6/13 blog Stop Me Before I “Innovate” Again:

“Words matter — in business and in life. I’ve always found that companies that aspire to do extraordinary things, leaders who aim to challenge the limits of what’s possible in their fields, develop a “vocabulary of competition” that captures the impact they’re trying to have, the difference they’re trying to make, the future they’re hoping to create. Almost none of these companies and leaders use the word “innovation” to describe their strategy — implicitly or explicitly, they understand that it has been sapped of all substance. Instead, they offer rich and vivid descriptions of what they hope to do, where they hope to get, and why it matters.”

Ginanpiero Pteriglieri, an associate professor of organizational behavior at Insead, puts an even sharper point on it in remarks quoted in The Experts blog in the Wall Street Journal:

“Innovation is a strong contender for the crown of business buzzword of the decade. The term has all it takes. It is ubiquitous, mysterious and, like its acolyte "leadership," it works alone and pairs well with many adjectives. Is there a problem that transformational leadership and disruptive innovation aren't invoked to solve? Is there a company whose failure is not explained by a lack of both?”

Business buzzword of the decade? Wow. In that race, the competition is steep, and the contenders are many.  By the way, a great place to check out a good collection of the “jargon monoxide” (a term coined by Polly LaBarre) contenders is The Ridiculous Business Jargon Dictionary where you can browse terms ranging from “above board” to “zero-zero split.” 

Whether or not you believe it is appropriate or well deserved, the property-casualty insurance industry isn’t often described as innovative.  Complacent and risk-averse, stolid, stodgy, and conservative are descriptors more commonly used. But let’s step back a minute—what is innovation, and how critical is it to the success of a property-casualty insurance company?

Innovation is often described as the implementation of something new—a product, a service, a process, an alliance, a market, or an experience—that creates value. So while the innovation process may begin with big ideas, it takes execution and results before it qualifies as innovation. Or, as Dr. Lewis Duncan, president of Rollins College, put it: “Innovation is the ability to convert ideas into invoices.” 

Of course, there are also other flavors of value out there to be harvested through innovation—lower costs, higher margins, new or more attractive products or services, more engaged employees, new customers, new distribution channels, happier customers, more loyal customers, enhanced reputation, etc.  Yet for property-casualty insurers who believe they are operating in essentially closed markets characterized by a high level of maturity and stability, the decision about innovating often turns on their competitive situation.  If they believe they are competing successfully (however they define that term), they may elect to avoid the costs of innovation and to focus instead on engineering incremental operating improvements, tweaking their products and operations and processes so they can continue to function competitively.

But if a company is not competing successfully, or if they aspire to grow and be profitable but that just isn’t happening, they need to step back and analyze what isn’t working, why, and what needs to be done to improve results. That’s an opportunity for innovation, for sure, but it also offers a convenient excuse to avoid or abandon any initiative or process that is new (or unwelcome or costly) and to “get back to basics.”  Getting back to basics means different things to different people, of course, but it usually involves a return to a time-tested and proven method of doing something, like implementation of well-established and widely understood industry methods and best practices. You might characterize it as the converse of innovation. Truth be told--it is much easier and more comfortable to get back to basics than it is to get innovative and develop something new to create value. And it just might be enough for an insurance company to get things back on track if their inability to compete had its roots in substandard or underperforming products, practices, services, or operations.

I do always wonder, when an insurance company goes public with its plans to embark upon an ambitious, multi-year program of operational transformation (first cousin of innovation), just how long it will take before they lose their nerve and push the “back to basics” button. I have experienced it, and I have watched others go through it, and it isn’t really that unexpected.  Innovation is often a costly undertaking that generates uncomfortable, disruptive change with no guarantee of success,  That is particularly true when the “value” that is expected to result is difficult to measure and demonstrate convincingly since it arises from something other than “invoices.”  If you have lived through any type of claims-related transformation or innovation, you know exactly what I mean.

Still, I am not convinced that all property-casualty insurance companies are necessarily entangled in an “innovate or die” predicament, at least not yet. Plenty of companies manage to stick to the basics, focus on execution, play around the edges with incremental improvements, and the market allows them to survive and sometimes even prosper.  Yet we all know there are insurance companies out there who are constantly pushing the envelope and doing whatever it takes to create value—they just don’t spend a lot of time bragging about how innovative they are or broadcasting what they are doing. Instead, they are busy trying to create distinctive marketplace advantages that resonate with customers and to give themselves an edge in pricing, costs, products or services.  Why? So they can operate with higher profit margins and grow by attracting customers away from their competitors. So even though innovation for property casualty insurers probably isn’t really a matter of life and death today, it can impact an insurer’s quality of life and general well being. Kind of like diet and exercise can for humans, I suppose.

Narrow the focus to property casualty claims operations, however, and I think the “innovate or die” predicament becomes a bit more pressing and complicated; but that’s a tale for another day.

Dean K. Harring, CPCU, CIC is a retired Chief Claims Officer and an expert and advisor on Property Casualty insurance claims and operations. He can be reached at dean.harring@theclm.org or through www.linkedin.com/in/deanharring/