During the last six months, we all have likely called upon our innermost innovative spirit.
For those in work from home (WFH) situations, you have been inventive in how and where to work. Do you have a home office? Spare bedroom? Kitchen table? Basement? Perhaps you are one of those people who changes your WFH room location now and then to “surprise” your coworkers on videoconferences?
For those seeking job opportunities, you have been groundbreakingly original in creating your “on-air” persona, as video interviewing has become the norm. Perhaps unlike the ABC News reporter who was found out earlier this year, you’ve inconspicuously gotten away with a blazer on top and shorts on the bottom?
For those starting new jobs, you have pioneered a presence in your latest role thanks to modern technology—you may have been onboarded remotely without having the chance to meet the majority of your new coworkers in person. Unfortunately, I will not have the opportunity to coexist in the office with our collegiate summer co-op students due to all of us working from home.
For those rigidly adhering to the “stay at home” guidance, you have been imaginative in how to keep yourselves (and even more important, your children!) entertained. Perhaps you even breathed a sigh of relief when you found your son creatively passing the time utilizing the ceiling fan as a high-speed carousel for his Fortnite “Loot Llama” plush animal? At least it afforded you a few more minutes to get that one additional email sent before being interrupted.
As you may have already guessed, this online collection of articles in The Actuary is centered around the theme of Expansion and Innovation. Pieces highlight innovations within the profession, such as modernizations related to data and technologies, the human element of resilience and how to develop our thinking to become more innovative. The compilation also includes two company case studies related to recent innovative efforts: one on the Q1 2020 move to a fully virtual financial close cycle and the other on the transcendence of the life insurance buying process to the digital age. Additional articles include reflections on cultivating actuarial opportunities—from individuals who more recently embarked upon the pursuit of the actuarial profession, as well as perspectives from those involved with evolving and delivering actuarial professional development content.
But what exactly is innovation? Why might certain individuals be viewed as innovators or as possessing innovative qualities? What role might innovation play in the workplace? What stance are companies taking on innovation?
The term innovation is a buzzword with fluctuating definitions. Some say the essence of innovation is creativity, while others believe it is the art of being current, relevant or simply “new and improved.” In certain instances, innovation is viewed as a process, such as an idea evolving into a reality. Corporations often define the term whereby the result of innovation is adding value to both the customer experience and the firm’s bottom line.
When researching this article, the definition that most resonated with me was articulated by Pete Foley, founder of Pete Foley Innovation LLC. He says innovation is “a great idea, executed brilliantly, and communicated in a way that is both intuitive and fully celebrates the magic of the initial concept.” While innovation may be viewed as magical, all of us, as mere mortals (and actuaries!), have the potential to be innovators.
One signature trait of truly innovative individuals is that they are not satisfied with being singularly focused. Instead, they engage in various endeavors. This ability to shine in a variety of areas is called “multipotentiality”—and has been defined in Education Week as “the state of having many exceptional talents.”1 Over the last six months, the pandemic has compelled us to draw upon what may have been our previously hidden quality of multipotentiality.
Our identities have undergone chameleonic states, whereby all of the roles we play have blurred together (as an employee, spouse/significant other, parent, caregiver, friend, schoolteacher, short-order cook, and enthusiast of anything that might keep us healthy, safe, engaged, entertained and perhaps even distracted from the reality around us). We have thought and questioned—whether it be said aloud or just murmured to ourselves—why has this happened and how will it impact our futures?
Dr. Albert Szent-Györgyi, a Hungarian biochemist who won the Nobel Prize in 1937, said, “Innovation is seeing what everybody has seen and thinking what nobody has thought.” Innovative people are curious and want to understand how and why things happen and, ultimately, work the way they do. (This sounds just like every actuary I know!) Through a lens of examination, innovators can decompose and rebuild. Scrutiny then inspires improvement to existing processes and leads to both modernization and transformation. From a corporate perspective, the innovator’s skill set has become a desired employee trait.
A 2019 EY survey conducted by Wakefield Research polled 500 U.S. C-level executives on the topic of innovation. Out of those surveyed, more than one-quarter stated they have a designated innovation leader in their organization, such as a chief innovation officer.2 Other ways firms foster innovation include embedding it within their cultures—such as via mentorship programs (particularly targeted at millennials, who are current on recent trends), workshop-style brainstorming sessions and the adoption of emerging technologies (e.g., artificial intelligence). Additionally, according to an MIT Sloan Management Review and Deloitte’s fifth annual study of digital business published in 2019, digital innovation can be furthered by partnering with other organizations (said 80 percent of respondents) or relying upon internal cross-functional teams (said 83 percent).3
In conjunction with aforementioned activities to inspire innovation, corporations must embrace innovation-inducing behaviors within their cultures. For example, this might be achieved by putting in place a cyclical feedback loop to ensure continuous learning and improvement throughout the organization. Perhaps most important, companies must instill a tolerance of failure to ensure that innovation is not stifled. Professor, lecturer and author Brené Brown said: “There is no innovation and creativity without failure. Period.”
Despite the need for innovation, companies find the topic to be challenging across multiple spectrums. It can be complex to define, wily to quantify and it is not a skill set that is easily staffed.
- Looking across the financial services industry, or across any sector, organizations do not have a consistent definition of innovation. What innovation means to a company varies based on numerous factors. It may require internal iterations over weeks, months or even years for a firm to develop the definition to be aligned with the business strategy. In some cases, firms look outward to their customers to define innovation, as stated by 54 percent of the 1,200 global companies surveyed in PwC’s Innovation Benchmark in 2017. Similarly, 35 percent of companies believe their customers are their most important innovation partners.4
- Once defined, capturing and measuring the success of innovation proves to be problematic. Only one-third of Fortune 1000 companies have formal innovation metrics because of this difficulty.5 Across these firms, common metrics include the number of patents filed in the past year, the number of ideas submitted by employees, and the annual research and development budget as a percentage of annual sales. The multinational conglomerate 3M, for example, has tried to mandate that 35 percent of company revenues be generated by products introduced within the last four years.6
- If a company is fortunate enough to define and measure innovation thoughtfully, it still may be challenged in staffing roles necessitating the trait. According to Gartner’s 2019 Innovation Survey, marketers state the biggest barriers to innovation are risk resistance (46 percent), the inability to measure impact (41 percent) and talent shortages (41 percent).7 Similarly, senior leaders believe there is a talent gap in filling roles requiring innovative expertise. The 2018 GE Global Innovation Barometer cites that nearly three in four executives believe a lack of skills is an issue facing their industry, and 64 percent believe this problem is restricting their ability to innovate.8
Should a company be clever enough to define, measure and employ for innovation successfully, it then must balance innovation with a risk management mindset. “When properly fused, [risk management and innovation] can help organizations pursue opportunities that a risk-averse culture might leave on the cutting-room floor,” notes Accenture Senior Managing Director Steve Culp. Communication and cooperation throughout the firm are critical for innovative efforts to succeed. And, to garner support at a corporate level, innovative projects should be aligned with the strategy of the overall organization.
We hope upon reading this collection of articles that you come away inspired to further discover the innovator within you, as well as to more broadly cultivate innovation across your place of work. Reflect on your company’s culture and what it might already be doing— or could begin doing—to invoke and support an ecosystem of innovation. In the words of author Steven Johnson, “Innovation doesn’t come just from giving people incentives; it comes from creating environments where their ideas can connect.”
- 1. Rivero, Lisa. Multipotentiality: When High Ability Leads to Too Many Options. Psychology Today, July 24, 2011 (accessed June 21, 2020). ↩
- 2. EY Americas. C-suite Is Bullish on Innovation, but Funding Still Lags. EY, February 21, 2019 (accessed June 21, 2020). ↩
- 3. Deloitte. MIT Sloan Management Review and Deloitte 2019 Global Study IDs External Networks as Key to Advanced Digital Innovation. Deloitte, June 4, 2019 (accessed June 21, 2020). ↩
- 4. Staack, Volker, and Brandon Cole. Reinventing Innovation. pwc (accessed June 21, 2020). ↩
- 5. Kaplan, Soren. The Complete Guide to Innovation Metrics—How to Measure Innovation for Business Growth. InnovationPoint (accessed June 21, 2020). ↩
- 6. Ibid. ↩
- 7. Gartner. Gartner Reveals the Top Three Barriers to Innovation in Marketing. Gartner, November 11, 2019 (accessed June 21, 2020). ↩
- 8. Edelman Intelligence. 2018 GE Global Innovation Barometer. GE, February 2018 (accessed June 21, 2020). ↩
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