Life & Accident Insurance Company

The client is a leader in providing voluntary supplemental benefit products and services for employees and their families at the worksite. The company has more than two million policies in force and serves more than 45,000 businesses and organizations by offering a broad line of insurance products, including disability, accident, life, cancer, critical illness, and hospital confinement.

Challenges

Operational efficiency has been a core value at the client for many years, driven by the need to process large transaction volumes efficiently and cost effectively. Additionally, delivering quality products to the market quickly is a key driver of growth in the voluntary benefit market. This operating environment demands an effective product development process that is able to quickly convert product concepts into well-designed, customer-focused products and services, and deploy them efficiently to the field sales force. The client's existing product development process was simply taking too long — more than 12 months for “next generation” products and 12 – 24 months for “new” products. Rapid changes in the voluntary insurance market heightened the client need to significantly speed up the process. The client has conducted process improvement initiatives over the years, but was at a turning point when it began looking for new ways to meet the demands of a competitive marketplace.

Nolan Approach

It was at this crucial point that the client engaged the Robert E. Nolan Company to help it take a different approach: one focused on innovation, rather than incremental improvement. Nolan partnered with the client to redesign its product development process and help it implement an effective, flexible, and repeatable process innovation methodology. Nolan was selected for its 38 years of experience in assisting financial services organizations with improvement initiatives, and for its collaborative approach to consulting. Nolan recommended the use of a cross-functional team to look at the entire product development process, from ideation through product launch and assessment, to identify opportunities for increased speed while maintaining or increasing the level of quality.

Methodology

Nolan’s approach was to help the client formalize a process innovation capability, characterized as having:

• A collaborative, participative approach to build ownership and imbed innovation into the culture
• A customer- and fact-focused approach using assessment of current and desired results
• A focus on stretch goals to stimulate innovative thinking and willingness to overturn traditions
• A customized ability to meet the client's needs using mapping and metrics
• An “end-to-end” process view from Operations to Marketing to Sales to the Customer

As part of this initiative, a cross-functional team was formed, consisting of employees that were at the heart of the product development process. The team was charged with analyzing all of their processes, both core and peripheral, and identifying those that were impeding speed or not adding value to customers. The result would be a product development process capable of providing faster and better products to the market. Additionally, this initiative would drive the development of an environment that embraces process innovation.

Recommendations

With assistance from Nolan, the team identified 17 distinct opportunities for improvement within their respective functional areas, as well as across the enterprise. Most importantly, the team’s solution was tailored to the client's strong customer orientation and culture that is built on an appreciation for efficiency and optimum effectiveness. The recommendations for rapid product development focus on communication, between functions in the organization and between product developers and the field. They also provide a greater degree of integration among various functions in the organization. They involve non-Marketing functions early in the product development process and allow these functions (such as Underwriting, Compliance and IT) to significantly influence decision-making; they encourage physical proximity of product development personnel; and they give sufficient authority to project managers to get the job done. Product concepts are now vetted by a small cross-functional team and design principles are applied to generate exact product specifications. Similar to an architect’s blueprint, they provide the detail necessary to begin construction. Construction is followed by Product Launch, in which the product is released to the field sales force. Each step in the product development process is followed by a formal decision point to move forward to the next step, terminate the project, or return to the previous step to revise conceptual or design work. The development process is carefully staged to permit assessment of the work to date, validate assumptions, and avoid problems before additional resources are committed. The decision points, in effect, mitigate risk and help ensure faster and more successful product launches.

Results

Nolan helped the client design a new product development process capable of delivering multiple products concurrently, as well as next generation products in three months, versus the previous 12 months — and new products in nine months, versus the previous one to two years. Some of the recommendations coming out of the workshop have already been implemented, while others are being implemented during the next few months. Among these are a number of changes designed to improve workflow and eliminate unnecessary or non-value added work and increase speed to market.