Earlier this month, I moderated a panel on emerging liability of social media at the annual PLUS Conference in San Antonio. I promised then to make the slide deck available. Here are the slides.
The notes to the slides contain the main points we were aiming to make to our audience, some of whom we expected would be very familiar with the subject, while others would need a more fundamental introduction.
I will post about this again in more detail but I think the two most interesting takeaways for me were about social media strategy. I should confess, for those who were not in San Antonio, that I admitted during the panel that my interest in social media started long ago with the wider consequences of collaborative technologies for our industry and only later concerned how we specifically address our customers’ concerns – including social media concerns - very real though I hope we showed they are!
Early in the panel, Bilal made the comment "Strategy follows the conversation". I understood him to have meant two things.
First, I took him to be stating the obvious point that, unless a firm follows what is being said about it, its business and the environment in which it is operating, it cannot expect to formulate a meaningful strategy.
The second and less obvious thought reminded me of the first time I read the Cluetrain Manifesto. Cluetrain was an online manifesto (and later a book) written ten years ago (and recently up-dated), which discussed the promise of the Internet as the writers already then saw it. Though that promise is arguably only now fully emerging, emerging it undoubtedly is. (I highly recommend the book...)
The basic premise of the manifesto is that ‘markets are conversations’. ‘Strategy follows the conversation’ in this context means to me that being fully immersed in the conversation, for some firms in some markets, can be their core strategy.
Think, for example, of the LMX market (London Market Excess reinsurance market) of twenty years ago. There is no space here to repeat all the challenges the LMX market faced but it had relatively few players, all of whom knew each other extremely well. As a consequence, the market was little more than one big conversation. So far so good except that the LMX spiral, which got Lloyd’s into so much trouble, was arguably caused by the smarter market operators moving from conversation to conversation, carrying and trading discussion ‘topics’ from one conversation to another. For those smarter market operators, simply being in the conversation was their core strategy.
In a more modern context, Bilal described how IBM recognized that people are it's biggest asset and suggested further that the collective knowledgebase is it's main source of competitive advantage. This makes its ability to be part of the conversation one of IBM’s absolutely core strategies – not just a tactic.
And as IBM learnt, to make this a successful strategy meant not just providing the technological resources to support IBMers conversing inside and outside the firm. The key to their success was to promote the culture necessary to encourage and support the conversation.
The second takeaway followed from this. Social media is often thought about as a solely technological issue. This completely misses the point - that technologies come and go. What endures is culture and without the right culture, no amount of technology is going to make a blind bit of difference to a firm’s success at making the most of the new ways that technology is just beginning to let us work.
It seems to me that this poses obvious and significant questions for the insurance industry. While different industries will be affected in different ways, the following seems to be one of the key ones for us. Because of how we structure ourselves, we are a silo-based industry; this is at best unhelpful and at worst, anathema to the successful use of social media.
Silos govern almost everything we do, from the specific role insurance plays in the wider risk management value chain, to the compartmentalisation of our intermediary and principal roles, to portfolio composition (and firm structures) that aggregates risk more often by type of risk than by type of customer.
This isn’t the place to explore why taking a silo approach is more important and/or understandable in some circumstances than in others but it is a key question we will have to address. Whether we use social media to create competitive advantage, to understand as much of the who, what, where, how and why of our customers as we can, to re-think how we design and deliver our services or just to make sure we are in the conversation with our customers, I don’t think there is any question that our industry will be major adopters of collaborative technologies, including social media.
If IBM are right though – that cultural change is a prerequisite of successful collaborative technology adoption – and if our culture is a function of the disciplines and approaches that have hitherto been essential for the prudent acceptance of risk, we really do face the most interesting of challenges...
The notes to the slides contain the main points we were aiming to make to our audience, some of whom we expected would be very familiar with the subject, while others would need a more fundamental introduction.
I will post about this again in more detail but I think the two most interesting takeaways for me were about social media strategy. I should confess, for those who were not in San Antonio, that I admitted during the panel that my interest in social media started long ago with the wider consequences of collaborative technologies for our industry and only later concerned how we specifically address our customers’ concerns – including social media concerns - very real though I hope we showed they are!
Early in the panel, Bilal made the comment "Strategy follows the conversation". I understood him to have meant two things.
First, I took him to be stating the obvious point that, unless a firm follows what is being said about it, its business and the environment in which it is operating, it cannot expect to formulate a meaningful strategy.
The second and less obvious thought reminded me of the first time I read the Cluetrain Manifesto. Cluetrain was an online manifesto (and later a book) written ten years ago (and recently up-dated), which discussed the promise of the Internet as the writers already then saw it. Though that promise is arguably only now fully emerging, emerging it undoubtedly is. (I highly recommend the book...)
The basic premise of the manifesto is that ‘markets are conversations’. ‘Strategy follows the conversation’ in this context means to me that being fully immersed in the conversation, for some firms in some markets, can be their core strategy.
Think, for example, of the LMX market (London Market Excess reinsurance market) of twenty years ago. There is no space here to repeat all the challenges the LMX market faced but it had relatively few players, all of whom knew each other extremely well. As a consequence, the market was little more than one big conversation. So far so good except that the LMX spiral, which got Lloyd’s into so much trouble, was arguably caused by the smarter market operators moving from conversation to conversation, carrying and trading discussion ‘topics’ from one conversation to another. For those smarter market operators, simply being in the conversation was their core strategy.
In a more modern context, Bilal described how IBM recognized that people are it's biggest asset and suggested further that the collective knowledgebase is it's main source of competitive advantage. This makes its ability to be part of the conversation one of IBM’s absolutely core strategies – not just a tactic.
And as IBM learnt, to make this a successful strategy meant not just providing the technological resources to support IBMers conversing inside and outside the firm. The key to their success was to promote the culture necessary to encourage and support the conversation.
The second takeaway followed from this. Social media is often thought about as a solely technological issue. This completely misses the point - that technologies come and go. What endures is culture and without the right culture, no amount of technology is going to make a blind bit of difference to a firm’s success at making the most of the new ways that technology is just beginning to let us work.
It seems to me that this poses obvious and significant questions for the insurance industry. While different industries will be affected in different ways, the following seems to be one of the key ones for us. Because of how we structure ourselves, we are a silo-based industry; this is at best unhelpful and at worst, anathema to the successful use of social media.
Silos govern almost everything we do, from the specific role insurance plays in the wider risk management value chain, to the compartmentalisation of our intermediary and principal roles, to portfolio composition (and firm structures) that aggregates risk more often by type of risk than by type of customer.
This isn’t the place to explore why taking a silo approach is more important and/or understandable in some circumstances than in others but it is a key question we will have to address. Whether we use social media to create competitive advantage, to understand as much of the who, what, where, how and why of our customers as we can, to re-think how we design and deliver our services or just to make sure we are in the conversation with our customers, I don’t think there is any question that our industry will be major adopters of collaborative technologies, including social media.
If IBM are right though – that cultural change is a prerequisite of successful collaborative technology adoption – and if our culture is a function of the disciplines and approaches that have hitherto been essential for the prudent acceptance of risk, we really do face the most interesting of challenges...
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