Why now is the time to bolster your competitive intelligence network
By Karen Rothwell
"Swiss Re's economists predict a severe recession until mid-2009 in industrialised economies, including the United States and Europe. In emerging markets, slower growth is expected, but not a full-blown recession. In 2008, the insurance industry successfully weathered the financial turmoil. As market uncertainty could continue well into 2010, the industry needs to preserve capital to remain resilient." (Post Magazine, December 9, 2008)
Within the insurance industry, the economic crisis has triggered the need for a new look at capital preservation as well as regulation, underwriting criteria and sound financial practices. Another item that insurance companies ought to be evaluating internally is how to bolster their intelligence function. As noted in my previous column, the insurance industry stands out in terms of having an organized intelligence function from the norm when compared to other sectors. But, of course, there is always more work to be done.
In a soft-market cycle, companies need to use every asset available to them -- especially their intelligence assets. Competitive insights into competitor practices, products and policies can be useful in developing and marketing one's own products. These insights come from secondary sources, but the most valuable ones are from primary sources -- your own employees -- who have first-hand information from client and market interactions.
Ironically, one of the most important and underutilized intelligence tools at your disposal is your own internal network of employees. Insurance companies have a plethora of employees to tap for competitive intelligence, including underwriters, claims personnel, adjusters, customer service representatives, etc. Market-facing employees can provide insights on how a company can improve its competitive offerings to cross-sell, up-sell or introduce new products or services. However, in difficult times when firms are strapped for time and short-staffed, it can be easy to overlook these internal assets. But with just a little effort, insurance firms can pave the way to tap into valuable employee insights.
The key for organizations is to harness these insights through a few key steps.
1. Identify vital sources within your company and the information they have access to that can increase your intelligence on the competitive environment.
2. Develop a process that educates your employee network on how to share insights that can contribute to the intelligence function.
3. Establish regular communication with your internal network to provide ample opportunities for sharing.
Still, few CI programs maintain formal human-source networks. Why?
The biggest obstacle is determining how to motivate a group of individuals to participate in the CI program over which CI practitioners have no direct authority. CI programs must essentially recruit a group of volunteers to receive direct information collection requests and report their findings on a regular basis. In a time of staff cuts and packed schedules, identifying and enlisting such volunteers can be difficult.
My firm recently worked with one client, however, that followed the principles of change theory of management to develop and successfully launch a human-source network. The client started by recruiting senior management -- in this case, a business unit head and a SVP of strategy -- to state the case for the importance of the network and each member's contribution. The CI director then met with each proposed network member individually to enlist their preferences and concerns about participating in the network. Finally, the CI team launched a day-long network kick-off meeting at which network members were encouraged to contribute their thoughts about how the network would work on a day-to-day basis.
The result? An established and motivated group of individuals representing a variety of company functions, ready and eager to collect and share their information, insights and observations. They are motivated by exposure to top management; clear, direct and relevant tasks; and the opportunity to participate in the CI function, which top management has publicly stated is of top importance to the company. Who could say no to such an opportunity?
In a soft market, organizations need to be on top of their game and the insurance sector is no exception. Companies cannot afford to overlook one of the most valuable assets available -- their own internal network of employees.
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