CNA’s Golden Making Technological Transformation a Reality
When asked recently which qualities will be most important to CIOs over the next 10 years, John Golden put credibility at the top of the list. More than any other officers at their level, Golden foresees, CIOs will be called upon to shape their companies, so they will need to establish a record of consistent delivery of functionality that justifies the investment it requires. While he was referring to the future of other CIOs, Golden may well have been thinking about his own past.
Golden arrived at Chicago-based CNA (more than $56 billion in assets) in 2001 as EVP and CIO, at a time when the commercial lines carrier was adjusting to a changing business environment in which the traditional reliance on investment results was no longer adequate. To improve bottom-line performance, Golden recalls, "CNA embarked on a strategy to improve data analysis in order to better understand exposures, improve underwriting discipline and operational execution, and reduce expenses to achieve operational scalability and profitability."
The overarching aim of that strategy has been to integrate the carrier's technology and business processing into a single efficient, flexible and scalable processing platform — an ongoing initiative known internally as the Operating Platform Transformation. Golden's first task upon arrival, however, was more immediate: to reshape a decentralized technology organization that consisted of 11 independently functioning teams that supported more than 30 business units.
"The CNA IT team was known for not delivering and for being difficult to communicate with," Golden says. "We quickly focused on consistent delivery and maximizing return on IT investments."
Efficiency Dividend
In moving to an enterprise-level IT organization, CNA enjoyed an immediate efficiency dividend of more than $30 million, according to Golden. By leveraging internal synergies and focusing on delivery and return on investment, the organization was able to deliver 98 percent of IT commitments, while reducing expenses by more than 40 percent and tripling the amount of new work delivered within an 18-month period, he reports. During the year after Golden's arrival, the IT organization eliminated 17 percent of its applications and reversed its ratio of new-to-maintenance projects to better than 60/40, he adds.
That record of success helped to secure Golden's credibility with CNA CEO Steve Lilienthal and earn the CIO a "seat at the table" among the carrier's senior executives, according to Golden. But as important as that achievement was, Golden insists, it was only a starting point for IT to be able to play a more influential role in the fortunes of CNA.
"You cannot be merely a witness at the table -- you have to be an active participant," Golden comments. "Earning the right to remain fully engaged with the CEO's agenda requires sharing the risk of running the company and contributing to tough corporate decisions."
Golden was given the opportunity to fulfill that requirement as IT was granted responsibility for process transformation and overall program management, in addition to the organization's fundamental brief to provide technology solutions. Golden's strategic task of redefining and replacing the carrier's entire business operational platform represents a $500 million investment in technology in order to achieve a more than 5-point improvement in CNA's combined ratio. "I have responsibility for leading CNA in defining, constructing and deploying the new processes and technologies that will help CNA remain competitive," he comments.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio
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