A time of great promise and peril

Nicolaas Kruger, CEO of MMI Holdings

Being innovative is as much about having a specific mindset as it is about investing significant capital into your organisation. This has been proven a number of times over the years, most famously during the Space Race in the middle of the Cold War. The Americans spent millions of dollars to develop a pen which could write in space while the Russians merely sent a pencil up with their Cosmonauts.

With the world digitalising at such a rapid pace, innovation is imperative for companies. How do we adapt to a world where there will be less human interaction?

The pace of change

Are we aware of the rapid pace that this change is happening at? The majority of the insurance market in the UK is made up of direct advise models, we are seeing robo-advisers starting to make an appearance in the local market, and the internet of things is making consumers more educated about products that you are going to sell them before you even meet with them.

There are other challenges as well. Medical advancements are compounding the longevity issue and driverless cars are threatening to become the next big thing in the industry. At the World Economic Forum, Uber stated that by 2030 it would not be inconceivable that the majority of its fleet will be made up of driverless cars.

A time of peril and opportunity

Speaking at the inaugural FIA Short-term Broking Summit, Nicolaas Kruger – CEO of MMI Holdings – said that this is an exciting time for the insurance industry. “There has never been a time of greater promise or a time of greater peril for the insurance industry. If we don’t embrace innovation in a way that suits us, we will struggle,” said Kruger.

The first step towards solving the innovation puzzle is to establish if you are fighting against it or if you are embracing it. Kruger pointed out that while many companies think that it takes a significant investment to become innovative, it is often about making the small changes in a business that makes a big difference in the end.

Innovation is about a culture, its realising that you need to make a complete change in the way you approach customers. Apple and IBM were involved in a significant fight for customers during their rise to popularity; Louis Gerstner Jr, CEO of IBM at the time, said that culture isn’t a part of the game, it is the game.

The unknown quantity

One of the challenges with innovation is that it is not quantifiable; you cannot place it in a box and display it in a museum. It needs to be informal.

“This is where the leadership of the organisation comes to the fore. Innovation does not play by a set of rules, so how can you apply old world logic to achieve it? Managers and senior executives need to be at the forefront of change. They need to be on the ground and walking among their troops (advisers) encouraging change through example,” said Kruger.

A part of this is being open to change and listening to new ideas, no matter where they come from. Leaders in today’s world cannot thrive on prestige, they need to earn the trust of those around them and in the business world, they need to be in tune with client centricity.  

The new world order

In this new world order, incentivisation is important. And it goes beyond a person’s salary, Kruger pointed out that workers need positive reinforcement; they need to feel as if they are working in an environment that encourages experimentation and builds their own sense of self fulfilment.

“While experimentation is important, it needs to be implemented incrementally. Do not be scared to fail; managers often learn valuable lessons about themselves and their companies through failure,” said Kruger. He added that successful companies challenge the status quo, but need to be careful where and how this is implemented.  

If we are being completely honest with ourselves, it is our culture rather than our product that defines us. Remember the days when cell phones all looked different? These days all smartphones look the same, they are a specific size, they have touch screens and they are modelled on the IPhone or the products Samsung produces. It is easy to replicate a product and a service, but it is difficult to replicate a culture. And this is what separates Apple and Samsung from the rest of the companies in their industry. What separates you from your peers?

Editor’s Thoughts:
When commenting on the digital revolution, Kruger said that there will never be a replacement for human interaction, but this interaction may not be on the same basis as it was in the past. How are you embracing change to innovate your business? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.