In the last two days, I wrote about: Integrating the Interactions with the Transactions, and Maybe Enterprise 2.0 Is About the Technology. I this post I want to share an example of an early success with this type of integration using old school tools. The new enterprise 2.0 could make this type of effort both easier and more powerful. We did this before the term knowledge management was pervasive. We then adopted this term for what we did but it was really an early example enterprise 2.0.
Many years ago in the dark ages of the early 90s there was a property casualty insurance company in deep trouble, especially in their commercial lines. On average they paid out far more than they took in so simply getting more customers was not the solution. One of the troubles was the inability to effectively underwrite the many niche markets in small and midsize businesses (e.g, movie theaters, laundry mats, etc.). They tend to just price, attracting the bad risks and losing the good ones to people who were smarter at assessing risk.
The IT system that “supported” the underwriters was a transaction recording system developed by IT so the home office people could keep track of what was happening in the field. The underwriters saw no value in using it and avoided it whenever possible. They tended to not be careful or complete when they did use the system. Home office often operated on bad data. However, there was one IT system that everyone did use. That was the rumor mill, aka the email system. The people felt they had some control here and rumors spread around the enterprise in nanoseconds. Everyone stayed engaged and current with the rumor mill and frequently contributed content. This was the system of engagement and interactions.
The firm decided that big changes were needed or this business might close. One of the changes was to instill a sense of underwriting discipline and a careful underwriting process. They engaged some of their best underwriters to conceive the process and developed an IT system to align with the new process. They asked many people in the field for feedback on the process and made adjustments.
They also asked the field about what type of IT system would help those in the field and what features would be useful. This approach was new, as the people had never been asked this question. It generated a lot of excitement and hope. News of the new approach spread quickly through the rumor mill and the new IT system got a lot of good press.
Underwriters wanted access to best practices in areas they were not familiar with and access to experts in those areas. They wanted this information aligned with the steps in the new underwriting process. They wanted to get the information they needed to make intelligent underwriting decisions. They did not want an automated system telling then what to do. The IT developers and senior management listened and these positive developments continued to spread through the rumor mill.
Underwriters used the system and they contributed their experiences into the “shared learnings” database for others to benefit from their experiences. It became a system supporting both transaction and interactions. Underwriters were able to find the right people to talk with on their current issues. Then they were able to contribute back their learnings into the system.
Many things happen to turn the company around but one was the ability of the firm to more effectively underwrite using the collective expertise of the firm. Progress was also made on the claims side through a similar transformation of the IT system from a top down imposition to a bottom up support and shared learning system that connected transaction and interactions. User generated content went from few contributions and poor quality to pervasive input and good quality. People took the first step. They now actually used the system.
However, the system still required a lot of additional work to make the experiences and reflections on transactions available to others. This practice, aka knowledge management, has met with varying degrees of success in other firms. The successes generally were aligned with specific business processes, like this example. They involved the user in developing the system and took time to persuade them of its value, like this system. And their success was measured by how it impacted specific functional business measures, like this system. This was one of those knowledge management successes for these reasons. The failures in knowledge management tend to be simply databases of content where the emphasis is on management and software, not people and process, and there is not connection to the transaction systems.
The transparency possible in enterprise 2.0 applications could make the aggregated experiences of others available as a byproduct of simply working with these new and more open tools. They have the potential to accomplish what was done with this property casualty company and achieve even greater success.