In a rapidly evolving landscape where disruption is increasingly becoming the “new normal”, businesses will have to cast their nets wider in search of new ideas to drive growth and profitability. The insurance industry is no exception given the changes being witnessed in the financial services sector as technological and regulatory risks multiply. Some of the best ideas will come from within organisations, even from unexpected sources. For that to happen, we must foster a culture of innovation… In the 14th century, in a city called Florence in modern day Italy, something very interesting happened. A wealthy family of bankers known as the Medicis assembled and funded a motley group of individuals from a wide range of professions – sculptors, scientists, poets, philosophers, painters and architects. The ensuing vibrant confluence of brilliant minds and ideas from diverse disciplines sparked one of the most creative epochs in human history – the Renaissance. Six hundred years later, a Swedish-American entrepreneur named Frans Johannson, described this phenomenon as the “Medici Effect” – the intersection of different cultures and disciplines leading to a creative revolution that ushered in a new world of ideas whose impact is felt by humanity till today. In a world where organisations, businesses and companies are grappling with how to remain relevant in the face of disruptive ideas, we can learn many lessons from the Medici family: diverse opinions, ideas and disciplines can be harnessed to fuel significant shifts in thinking in society. That’s precisely what innovation entails – not just new ideas but fostering the right environment for those ideas to thrive no matter where they originate. Organisations including businesses have to increasingly nurture a culture of innovation if they hope to navigate the conundrum of uncertainty brought on by disruption. It matters not what industry one is in. No business or industry is immune to the existential threats lurking in the form of new products, competitors and business models. Dramatic shifts may come from outside a particular industry. Think how M-Pesa a telco product fundamentally changed banking in Kenya. Uber and Airbnb are examples of how cross-cutting ideas can upend traditional industries in this case transport and hospitality. It was Google not the auto industry that developed the concept of the “driverless” car. To be innovative requires asking some hard questions. The job description of every business leader is of course to constantly seek answers to the challenges facing his company but as management guru Peter Drucker noted, “The important and difficult job is never to find the right answers, it is to find the right question.” That essentially defines innovation. At the heart of the new thinking on innovation is the notion that creative ideas do not necessarily have to come from the top rather from different and sometimes unexpected sources within the organisation. Johansson argues this is only made possible by finding the right intersection of disciplines and cultures. Thus by cultivating the “Medici Effect” –that vibrant intersection of ideas and cultures - organisations can empower their employees to drive the innovation process. This requires breaking down the barriers imposed by silos operating within the organisation. Silo mentality kills the free sharing of ideas from one corner or level of the organisation to the other. Traditionally, the insurance industry has been described as slow in adopting new ideas. Insurers are often accused of selling the same products only with different tags. There’s little differentiation of the insurance commodity. That is however changing with the entry of new technologies that are dramatically altering how we engage with consumers. A survey conducted by consulting firm PwC in 2015 identified the “ability to change” as the biggest concern for insurance executives globally when it comes to the role of innovation in meeting the changing risks of business. In other words, insurance firms are worried not just about the disruptive nature of innovation (technology, competition etc.) but more importantly finding new ways to price risk, engage consumers, enhance efficiency and grow market share. In Kenya, where the insurance market is becoming increasingly competitive with the entry of new players and looming threat of disruption, innovation especially driven by technological changes, will play a central role in addressing such risks. Things like cloud computing, mobile phones, online/digital platforms and other emerging technologies will profoundly influence the creation of new insurance products, services and business models. Innovation is a pre-requisite for developing better products that are responsive to consumer needs. From an insurance perspective, innovation also helps break barriers to inclusion and access. Most people hardly view insurance as a financial product yet the ultimate goal is to provide financial security to individuals and businesses against risks. By making insurance more accessible and affordable – through innovations like mobile and internet platforms – we empower more people to achieve financial security. In other words, insurance is not just about settling claims. It transcends this narrow scope, where a client whose premises has been gutted by a fire is quickly put back into business. Weaving the sometimes chaotic tapestry of creative ideas into a coherent process requires a new approach underpinned by an internal culture that encourage rather than stifles new ideas no matter how unconventional Muema Muindi is the CEO of Kenya Orient Insurance Limited. The views expressed in this article are of the author.
