About the Role
Scott Kirsner: You’ve been at Allstate for about a year now. Tell us a little bit about what your focus is. Was it a totally new innovation program when you arrived, or was there already something in place?
Moises Norena: It’s going to be a full year in July, so I’m three-quarters of the way. Allstate has attempted innovation for a long time, so I would not say it was a new thing. There has been an innovation program for a number of years.
This is the first time we were looking at this holistically. I have two main areas of responsibility. The first one is the strategic innovation side. We’re establishing an innovation process for the company. What I mean is we’re looking at how do we organize the whole program? How do we manage the portfolio? How do we make sure that we’re getting traction? What are the pieces of the engine that have to be built to make it sustainable, etcetera.
That’s a very macro program that has a lot of people involved. I’m part of the team creating this program, which is exciting. It’s getting Allstate to a new place.
The second part, which is more of my marketing hat, is what we call targeted markets. One of the strategies of the company is to really start focusing on consumer needs, which sounds obvious for all of us in innovation and even in consumer packaged goods, but in companies like this that have been in the market for many, many years, we’ve thought about ourselves as product companies. Home insurance, auto insurance — we will sell and transact that. We’re flipping that to be more focused on the consumer needs of specific target segments.
We’re building offerings that will allow us to really meet those needs in a meaningful way, and help our agents be more than just that transaction.
I must say, when I joined Allstate, I came with some skepticism about what it’s going to mean. Insurance sounds a little boring when you think about it. The possibilities are endless. The world is changing a lot. Technology is really disrupting industries, and insurance is going to be one of them. It’s exciting to be here.
Accomplishments at Whirlpool
Kirsner: If I could ask one backward-looking question about Whirlpool, what I’d be most curious about is what were the big accomplishments of your tenure when you were at Whirlpool? What are a couple concrete things that you’d point to and say, “Hey, that’s something that really delivered value and continues to deliver value for Whirlpool.”
Norena: I was in Whirlpool for a long time, and in the innovation role for about six years. It was a very exciting time. I had the pleasure to work with the most renowned innovation people in the world —Nancy Tennant being one of them, who I had the pleasure to report to.
Some of the biggest contributions in that time were really the global expansion of our process — really nailing down that common language for an organization as large as Whirlpool, which is global. You can put people from different regions and functions into one place, and they’ll operate efficiently in the innovation space because of this common language. Along with that, we established management systems that allowed the organization to see innovation as a business process, and not just as an event.
We implemented metrics that are part of that enterprise planning cycle. We ran an initiative that was a very intense called Innovation Turbocharge. When I look back, it was probably the biggest thing I was part of.
The last thing, which is still going on and I’m still very involved with, is the creation of iVia, which is a partnership with Notre Dame University. One of the things that Whirlpool did very well was expanding the innovation knowledge in the company.
We had the iMentor program. We trained thousands of iMentors. We thought, “How can we bring that to the world and help the front line innovation people learn about what it means to do innovation?” We partnered with the University of Notre Dame. That program is available in the market now. We are going through our second class. It’s a way for us to really bring all of that experience and share it with the world. That’s another great accomplishment. I have a couple of people from Allstate in the current class, and hopefully we can continue to grow it.
Kirsner: Are there any specific products or businesses that Whirlpool got into as a result of all this mentorship, innovation training, and systematization?
Norena: I can think of two that are visible in the market and are sizable enough that we can point to in the US. There are others in other parts of the world. In the US, the Gladiator brand of garage organization [products] was born out of this effort and has continued to grow.
The other one is Swash. This goes back to the beginnings of innovation at Whirlpool about 12 years ago, when we thought the laundry process is not only about washing or dry cleaning. There’s something in between that sometimes. You need to refresh your clothes. [That led to] this partnership with Procter & Gamble, and the product Swash.
In other parts of the world, in Brazil we have an offering called EcoHouse. It’s a service that provides water to homes instead of having to buy these big jugs. EcoHouse is a service where people can rent high-end filters. This customer base grew to several hundreds of thousands of customers. The proof points are that the investment was worth it.
Differences between Product and Service Companies
Kirsner: Talk about the transition to Allstate, in terms of what you saw, or what you have seen in your seven or eight months at the company, as the biggest challenges.
And maybe the difference of being somebody moving out of that product-oriented context at Whirlpool into a totally service-oriented context in Allstate.
Norena: When you think about product companies, there is some expectation, some predictable cycle. You need to bring new products — it’s more built into the enterprise planning cycle. You can see the cadence and people are used to that. It’s expected. Also, there’s a product development process that, whether it’s consumer-focused or not, has been there for a long time. The organization knows what to expect.
I don’t know that I can speak for all service companies, but one thing when you are in an environment like this — that cycle doesn’t exist. It’s primarily reacting to approval cycles, and things that are legislated. There’s no launch, per se, of our offerings. We’re trying to change that, but that’s one of the things that I’ve seen to be a big difference.
Another thing that I’ve seen that’s a significant difference is how focused we are on the customer experience. When you think about products, you sometimes don’t control that. You let the retailers take care of that. In some instances — and Whirlpool tried this — you want to create your own experience by putting up your own storefronts. Apple can do that perfectly, but most companies that build products don’t do that.
The affinity with the brand has a high relevance when you think about services. One thing that’s interesting from a perspective of the innovation practice is that I’ve seen more dependence on open innovation, or partnerships. A lot of the things that we are building right now are depending on our ability to do good open innovation with partners.
Those are the big differences. But when I think about the commonalities in these two types of environments, I would say that the innovation process — and you can call it design thinking for people who are more used to that type of approach — that’s a skill that’s transferable. People that know it well would be able to apply it in both types of environments.
I continue to see that innovation is hard to measure. We’ve talked about measures all the time. It’s probably easier in the consumer goods space, or product companies.
Kirsner: Because you can look and say, “OK, what is the revenue being generated by this new product that came from our innovation process?”
Norena: Exactly, yes. You can quickly go and do that. You can measure that in market share for product, and number of units. You can estimate what your steady state is going to be when you look at all the retailers you have, etcetera.
When it comes to services, we know a number of policies, but as we think of expanding our services, it’s a little harder to measure. It makes it harder to sell. The sell is a little bit harder in this [services] environment. When you think about going to your innovation board, or people making these decisions, I’ve seen that the sales are a little tougher in these types of environments. At the end, when you think about innovation — I don’t think this is going to be a surprise for anyone — but it’s about people. Making it work is going to be about people. That’s no surprise, but it’s something that I’ve seen as important at Allstate as it was at Whirlpool. Leadership involvement and the way leaders are pushing the agenda, getting engaged, inspiring people is another big element that will make things succeed.
Reporting Relationship and Advisory Boards
Kirsner: A quick question that I always like to ask is, who do you report to? Do you have some innovation advisory board, too?
Norena: Yes, I report to the Vice President of Innovation. We are under the marketing arm. There are several groups that are involved in innovation at different levels. There is an innovation board. Some of the members of the CEO’s staff [are on that]— and the CEO has been very engaged lately.
There’s an innovation council that has people that report to that group, which makes some decisions in terms of how to assign resources that have been carved out to support innovation. And we’re in the process of building a larger community. One of the things that is important for a company of this size is to create our own way of doing things. We’re not there yet. That’s one thing that Whirlpool does very good. We knew what the Whirlpool innovation way was. Here, as we think of all the different investments we’re making, all the people we’re engaging, we can get to that point very soon.
Kirsner: The first listener question is about the highly-regulated nature of the insurance industry. How has your approach to innovation changed moving into a more highly-regulated industry? Or has it not changed?
Norena: It has changed. The legislation really takes a lot of lobbying. There are groups here working on that. A lot of the efforts I’m driving are things that would not be regulated. We let the core business teams deal with innovation that is regulated. There are a lot of intricacies to doing that.
What gets interesting is when these things get inter-related, and we are starting to get into that space. This is going to be about trying to figure out how we can make that work. There’s not an easy answer for that, but there’s a clear distinction in how we address things things that are regulated.
Working with IT
Kirsner: The next question is about how you work with IT in terms of the ways mobile is going to change Allstate’s businesses. It seems that young people might want to buy insurance products entirely through an app with no agents involved. What’s your relationship like to IT or software development teams there?
Norena: The question is a little bit broader than the agents, because there is certainly a significant disruption that’s going to happen given data abundance, and the involvement of technology in the way we deliver services.
To give you a very simple example, think about all of us using Google Maps and being tracked everywhere we go, what distance we’re going, which turns we make, whether there’s traffic or not. You can think of a whole different model for insurance if you take that example.
Another group within Allstate is looking at all those technologies and helping us integrate them into our operations. When it comes to the agent, that’s a very good question. We’ve found that the agent model still makes a lot of sense for our type of product, but we’re looking for ways to enable that conversation to happen in a different way. It doesn’t have to happen by you either going to an agency or calling someone.
We need to integrate digital tools that enable the agent to be efficient in the segments that we’re addressing. [People] probably don’t have the patience to wait for a quote the next day. All of that is something that we’re actively working on. The strategy is to still go with the agent, making them a trusted advisor, and giving them tools that can help them serve our customers in different ways.
We also have a direct-to-consumer strategy. That’s Esurance. In that case we don’t have an agent model. That’s how we’re addressing those two aspects that you asked about.
More Open to Open Innovation
Kirsner: The next question is about open innovation. Can you talk a little bit more about what you mean when you talk about open innovation and maybe give us an example?
Norena: Open innovation is a tool kit that allows you to deliver your innovation — either scale it or make it faster or maybe give you access to markets that you are not part of. When I think about the relationships that are needed for us to deliver some of the services we have, you can think of a partner we have, which is Angie’s List.
You can think of them as a platform for us to deliver some of the things that allow us to be in the home in a different way than we are today.
That’s not the only way to think about open innovation. You can also think all the way to the front end, in how we partner with companies that offer technology platforms that we can jump on that will help us deliver some of these data-driven offerings.
Not only that, but all the strategic ventures efforts, too. We’re looking at emerging technologies that can really differentiate us in the market. It’s a wide spectrum of ways in which you can leverage open innovation.
But I’ve seen that it’s more prominent in a company like this, versus Whirlpool where you’ve had the engineering efforts inside. I’m not disregarding the fact that open innovation is important for a company like Whirlpool, it just has a different level of relevance here.
Kirsner: The Angie’s List partnership you mentioned, is that a way for Allstate to reach Angie’s List members that are thinking about home improvement?
Norena: Yes. We’re running a pilot with them. It isn’t necessarily about reaching their customers. It’s more about what we can offer that is going to be meaningful for customers, whether they are an Allstate customer or not.
It’s in the process of being deployed. You can think of the actual things that are needed for customers to keep their homes up-to-date, maintain their value, make sure that their homes are less risky, and will have less claims.
There’s a program that we developed with them called Home Tune-Up. The idea is some of their best handymen will come and do a checklist for a very affordable price and will do the things that most people don’t know they need to do.
Four Ways We Measure Innovation
Kirsner: The next question is about metrics. Are there some metrics you have in place at Allstate, or what would you like to measure if you could snap your fingers and make it happen?
Norena: Our definition of innovation is more loose than the one we had Whirlpool, given the nature of products and the nature of services. We’re going all the way from creating new services and sources of revenue, to new business models, opening access to new markets — but also going to the core business and looking at creating new sources of retention or acquisition of our customers.
We also look at internal innovations that can yield significant savings, like on the claims side. If you think about how you measure that, there are four ways in which you can measure that. We’re building those as we speak.
One is the differentiation. Is it something that you can really point to that is differentiating the market? We look at that from a consumer standpoint. What is the magnitude that they bring — whether it’s addressing a big and sizable problem.
Obviously, we need to look at ROI, in terms of how big this is going to be, even though sometimes you don’t have enough data to prove that. Then, it’s also looking at the strength of the portfolio. We look at that in aggregate. Are we moving where we want to go?
I would say that they’re not strictly managed as I was used to with Whirlpool, where it was very numbers-driven. Part of it is just the nature of [products versus services.]
Innovation Team Survival and Keys to Success
Kirsner: This is a question lots of innovation executives have. What is your advice about weathering changes in management, and changes in leadership at business units, and ensuring that your innovation team will survive?
Norena: It comes down to value that the team can provide. One thing that I learned at Whirlpool and am trying to apply here is that not all of the people in the organization are thinking about innovation 365 days a year. The innovation teams have to be the ones that are pushing the boundaries, that are [developing the] best practices, that people look to when they have questions.
That’s achieved not only by delivering and showing what the possibilities are in the actual innovations, but also being active out there in developing networks.
Even with that I’ve seen teams from colleagues being dismantled. I will say that no company has found the right answer.
At the end of the day it comes down to, does the leadership believe in it? Can you get the right inertia and momentum so it stays there, even though people may move? That’s a challenging question for everyone.
Kirsner: Let’s get in one last question. Talk about what you think some of the keys to success in innovation are, within the context of a big company.
Norena: Try to create, as best as you can, a strong link between strategy and innovation. That’s not that easy, because you always have that tension in answering to shareholders. That connection cannot be created overnight, but that is what can ensure things stick over time. The second one would be really creating that common language. When I talk about that, I’m not necessarily referring to the innovation process itself. We know discovery, opportunity, development, experimentation, etcetera. It’s more than that. It’s how you’re measuring it. What are the types of skills that we want? And that doesn’t happen by having the C-suite discuss it.
I don’t think there’s a way of creating a stable innovation practice just by pushing top down, but nor the opposite way. I don’t think it’s possible to say we’re going to do a grassroots effort and that’s going to change the company. In my mind, one of the key roles of the innovation leader is you have to be able to manage upwards and talk strategy. At the same time you have to be working with the teams executing the project, trying to get inspired, and [get them to] understand how the innovation process works on a step by step basis. It’s almost like a dual life that we have to create to be successful at innovation.