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Management Strategies

09:58 AM
Frank Petersmark, X by 2
Frank Petersmark, X by 2

Pioneers vs. Settlers – Which Expedition Should I Join?

While CIOs haven't signed up for the Wild West, there is more risk tolerance on the part of many organizations for the potential benefits that new and innovative approach or technology might bring.

"It is the flash that appears; the thunderbolt will follow."

Francois Marie Arouet, better known to history as Voltaire, the French philosopher of the Enlightenment, expressed this sentiment in the middle of the eighteenth century as a way to suggest that actions have consequences, and that the start of something in one manner often leads to outcomes of another manner.

Much the same might be said for today's CIOs and the kinds of business and technological conundrums they often find themselves in. On the one hand, innovation, experimentation, and research and development are viewed by many of their business colleagues as the key to marketplace competitive advantage and having customers who never think of shopping their business around.

Frank Petersmark
Frank Petersmark, X by 2

On the other hand, taking on those types of activities and initiatives comes with a requisite amount of risk. And risk has historically been anathema to CIOs, and for good reasons. A core part of any CIOs job is to make sure that the technology used by their organization is available, effective, and efficient. The way most CIOs assured this -- some more successfully than others -- was to reduce the risk of errors and outages by employing any number of familiar practices, behaviors, and tools -- all of which combined to govern the amount of risk inherent in carrying out the technological mission of the organization.

All of this led, quite naturally, to an IT culture of risk aversion through systemic controls. It became part of an overall IT approach to assessing, acquiring, and implementing new technologies and processes into the organizational bloodstream. The last thing that any CIO, especially at an insurance company, wanted to do was to introduce some exotic bacteria that their governing antibodies couldn't deal with!

[Previously from Petersmark: Why Working in Insurance IT is Like Running Detroit]

For many CIOs and insurers, the general approach was a risk adverse one – let's let others be the pioneers who take all of the slings and arrows, and we'll be the settlers who follow when it's safe. However, like so many other aspects of the CIO's world, that has now changed.

While CIOs haven't signed up for the Wild West, there is more risk tolerance on the part of many organizations for the potential benefits that new and innovative approach or technology might bring. This is both good and bad news for many CIOs who now find themselves in the position of changing – or at least modifying – an IT culture whose bedrock principle has always been to proceed cautiously and be wary of any sudden changes to anything.

So how does a CIO strike the right balance in this brave new world?

Many CIOs begin to answer that question by introducing some sort of new functional area whose mission is to seek out new and interesting processes and technologies. These are things like a research and development group, or an innovation center, where neither existed before.

While the benefits of having such groups are open to debate, if nothing else it does introduce the organization to the concept of moving from their traditional settler position to more of a pioneer mindset. Still others take it a step further by introducing collaborative platforms or portals whose sole purpose is to encourage disparate functional areas to contribute thought and ideas that might be used for short innovation sprints, where several ideas are pursued at once by a small team for several weeks. The sprints are time-boxed on purpose so that time isn't spent unnecessarily on dead ends, and the goal is to see if anything interesting comes out the other end that might be acted upon.

A few bold CIOs are going all-in as pioneers, dangers be damned, with the hope that being a first mover on something will yield a substantial competitive advantage before all of the settlers show up.

All of these and more are valid approaches, and they all rub up against the risk-averse culture that has developed in insurance IT shops over many years. The savvy CIO will quickly understand that the key to the settler-to-pioneer transition is not the tools, technologies, or process changes--all important things to be sure--but rather the shift in culture and attitude as it related to risk.

It requires the CIO to create, or more accurately re-create, the environment in which IT people work and collaborate, and to make the environment a safe zone for experimentation, and yes, even failure. It sounds like a simple thing, but it cuts across the grain of some very entrenched cultural norms and attitudes about the risk-reward equation in insurance, and about how insurance IT professionals have been historically encouraged — or not — to embrace risk.

And lest anybody thinks that insurance IT will soon embrace risk in the same way that many Silicon Valley startups do, let's be clear in terms of expectations. This call to action is an incremental one, and will be measured in degrees of change rather than new products.

Being a settler rather than a pioneer in insurance IT used to be the safe place to be. Increasingly though, that choice of expedition by CIOs will become a career and an organizational differentiator.

[Budgets and technology specifications are only part of an technology leader's responsibilities. Managing an IT workforce might be the most challenging aspect of any executive's job. Attend the Humans Aren’t Computers: Effective Management Strategies for IT Leaders session at Interop 2014 in Las Vegas, March 31-April 4 to learn new management techniques.

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