High-minded corporate missions are increasing in popularity. Some of the most groundbreaking enterprises set ambitious – even outlandish – goals.
The entrepreneur Elon Musk wants to save humanity by colonizing Mars through his company SpaceX and accelerate the transition to sustainable energy through his electric car manufacturer Tesla. The founders of Google and Alphabet, Sergey Brin and Larry Page, aim to organize all (yes, all) information in the world, and they seem to be succeeding. Google finances only “10x projects,” or initiatives that can improve a product or service by a multiple of ten.
These companies declare exalted – and some might say unrealistic – goals and then work hard and with full conviction to implement these targets under real-world conditions.
The comparison with the insurance industry is uncomfortable. Insurers suffer from an increasingly dangerous taboo: a tendency to discredit or disparage lofty goals. We shun the spotlight, so when we do end up on national television, it is often in response to a complaint or crisis. While we privately acknowledge the great social good of insurance, we are oddly reluctant to promote our products’ benefits outside of our sector. And because we celebrate healthy caution and risk aversion, our feet remain firmly planted on the ground, while other industries reach toward the stars – or Mars.
Of course, a certain conservatism and prudential attitude is essential in our industry. After all, insurance relies on actuarial science and sound risk management. The money we receive is a responsibility, part of our commitment that we will manage funds carefully to protect the insured. As a financial service, insurance also relies on the language of numbers more than emotion; this is how we must communicate to our shareholders and stakeholders.
However, it has become increasingly apparent that our own culture may be hindering us from moving the industry forward. To further innovation and future growth, we must think differently about our business. Insurers can learn from companies and sectors that have mastered the art of pursuing a higher purpose and are already achieving great results.
Searching for Inspiration
Perhaps the most important lesson of Google is that the company itself sells far more than an effective search algorithm or a series of technologies. It markets an ability to imagine – and inspire. So, when Brin and Page searched for a new CEO for Google, they selected the only candidate who had participated in the free-wheeling Burning Man festival in the Nevada Desert: Eric Schmidt. That is, Google chose a CEO precisely for his willingness to explore an uncommon experience, or as Burning Man describes itself, a celebration of “radical self-expression and radical self-reliance.”
Google looked for human qualities such as curiosity and the pursuit of deeper meaning – not just technical skills or the ability to generate earnings per share. Under Eric Schmidt’s leadership, Google multiplied revenues 400x in 10 years (from $100 million to $40 billion).
Of course, Burning Man attendance is no prerequisite for insurance product innovation – but perhaps defining a meaningful purpose beyond profit should be. As University of Virginia Darden School of Business professor R. Edward Freeman said, “We need red blood cells to live (the same way a business needs profits to live), but the purpose of life is more than to make red blood cells (the same way the purpose of business is more than simply to generate profits).”
I believe that innovation is not generated by those whose sole objective is profit, but by those who pursue a transformational purpose (“it will change your life”) can impact a large number of people. A necessary, but insufficient, condition is to listen to these potential customers and understand them. So, how far can life and health insurers go with a declaration of a massive transformative purpose for humanity? Can we put ourselves on the same level as Google, Tesla, Amazon, and Apple? Of course we can.
Defining our Noble Purpose
What, then, is the great purpose of insurance that we can emphasize when we communicate outside our sector? (I am referring in particular to life and health insurance, RGA’s dedicated focus).Read More +