Tag Archives: business strategy

Helping Data Scientists Through Storytelling

Good communication is always a two-way street. Insurers that employ data scientists or partner with data science consulting firms often look at those experts much like one-way suppliers. Data science supplies the analytics; the business consumes the analytics.

But as data science grows within the organization, most insurers find the relationship is less about one-sided data storytelling and more about the synergies that occur in data science and business conversations. We at Majesco don’t think it is overselling data science to say these conversations and relationships can have a monumental impact on the organization’s business direction. So, forward-thinking insurers will want to take some initiative in supporting both data scientists and business data users as they work to translate their efforts and needs for each other.

In my last two blog posts, we walked through why effective data science storytelling matters, and we looked at how data scientists can improve data science storytelling in ways that will have a meaningful impact.

In this last blog post of the series, we want to look more closely at the organization’s role in providing the personnel, tools and environment that will foster those conversations.

Hiring, supporting and partnering

Organizations should begin by attempting to hire and retain talented data scientists who are also strong communicators. They should be able to talk to their audience at different levels—very elementary levels for “newbies” and highly theoretical levels if their customers are other data scientists. Hiring a data scientist who only has a head for math or coding will not fulfill the business need for meaningful translation.

Even data scientists who are proven communicators could benefit from access to in-house designers and copywriters for presentation material. Depending on the size of the insurer, a small data communication support staff could be built to include a member of in-house marketing, a developer who understands reports and dashboards and the data scientist(s). Just creating this production support team, however, may not be enough. The team members must work together to gain their own understanding. Designers, for example, will need to work closely with the analyst to get the story right for presentation materials. This kind of scenario works well if an organization is mass-producing models of a similar type. Smooth development and effective data translation will happen with experience. The goal is to keep data scientists doing what they do best—using less time on tasks that are outside of their domain—and giving data’s story its best possibility to make an impact.

Many insurers aren’t yet large enough to employ or attract data scientists. A data science partner provides more than just added support. It supplies experience in marketing and risk modeling, experience in the details of analytic communications and a broad understanding of how many areas of the organization can be improved.

Investing in data visualization tools

Organizations will need to support their data scientists, not only with advanced statistical tools but with visualization tools. There are already many data mining tools on the market, but many of these are designed with outputs that serve a theoretical perspective, not necessarily a business perspective. For these, you’ll want to employ tools such as Tableau, Qlikview and YellowFin, which are all excellent data visualization tools that are key to business intelligence but are not central to advanced analytics. These tools are especially effective at showing how models can be used to improve the business using overlaid KPIs and statistical metrics. They can slice and dice the analytical populations of interest almost instantaneously.

When it comes to data science storytelling, one tool normally will not tell the whole story. Story telling will require a variety of tools, depending on the various ideas the data scientist is trying to convey. To implement the data and model algorithms into a system the insurer already uses, a number of additional tools may be required. (These normally aren’t major investments.)

In the near future, I think data mining/advanced analytics tools will morph into something able to contain more superior data visualization tools than are currently available. Insurers shouldn’t wait, however, to test and use the tools that are available today. Experience today will improve tomorrow’s business outcomes.

Constructing the best environment

Telling data’s story effectively may work best if the organization can foster a team management approach to data science. This kind of strategic team (different than the production team) would manage the traffic of coming and current data projects. It could include a data liaison from each department, a project manager assigned by IT to handle project flow and a business executive whose role is to make sure priority focus remains on areas of high business impact. Some of these ideas, and others, are dealt with in John Johansen’s recent blog series, Where’s the Real Home for Analytics?

To quickly reap the rewards of the data team’s knowledge, a feedback vehicle should be in place. A communication loop will allow the business to comment on what is helpful in communication; what is not helpful; which areas are ripe for current focus; and which products, services and processes could use (or provide) data streams in the future. With the digital realm in a consistent state of fresh ideas and upheaval, an energetic data science team will have the opportunity to grow together, get more creative and brainstorm more effectively on how to connect analytics to business strategies.

Equally important in these relationships is building adequate levels of trust. When the business not only understands the stories data scientists have translated for them but also trusts the sources and the scientists themselves, a vital shift has occurred. The value loop is complete, and the organization should become highly competitive.

Above all, in discussing the needs and hurdles, do not lose the excitement of what is transpiring. An insurer’s thirst for data science and data’s increased availability is a positive thing. It means complex decisions are being made with greater clarity and better opportunities for success. As business users see results that are tied to the stories supplied by data science, its value will continue to grow. It will become a fixed pillar of organizational support.

This article was written by Jane Turnbull, vice president – analytics for Majesco.

growing

If Growing Gets Tough, Tough Get Growing

Successful businesses continuously draw on their strengths – and their people – for growth.

How do you describe the strengths of your business now? How would you describe the strengths that you’ll likely need in a year? In a few years? And how do these strengths translate into the skills your people will need in the future? For most companies, the answers to these questions are always evolving, as disruption increases and the pace of business picks up.

We’ve seen the recent evolution of companies’ capabilities — like fast-food chains rolling out deluxe coffee-shop menus, or utilities delving into smart home appliances.

A lot of organizations have solid processes for evolving their business strategies. But as sound as the development and approval process is, it often leaves out an important aspect: Can your people evolve, too?

Most CEOs aren’t certain that theirs can. In our latest CEO survey, nearly 80% of U.S. business leaders say they’re concerned that a lack of key skills threatens their organizations’ growth prospects.

This stat raises the question: Are some of these organizations taking their growth strategies too far afield, beyond their core strengths, in a desperate search for faster growth?

In Strategy+Business Magazine, we recently wrote about how companies that deliver sustainable growth remain true to what they do best and take advantage of their strongest capabilities—what we call a capabilities-driven strategy.

It takes a substantial effort. As we say in the story, “If you respond to disruption by changing your business model and capabilities system, you can’t dabble. You have to commit fully.”

That level of commitment is only possible, of course, with the right people to step up and deliver on your company’s greatest strengths.

Think of the potential talent issues at hand for so many businesses: How does a legacy technology company avoid disruption and commoditization? How can a fast-food chain turn up its café side of the business without trained baristas on hand? How can a utility amp up the tech-savvy talent needed to design Internet-and-data-fueled thermostats and security devices?

They’ll all need to align their talent strategy with their business strategy.

In our advisory work with clients, we are in frequent talks with companies that need to make these moves. And talent is at the top of the priority list.

Before preparing to grow your strengths, think about the capabilities in your current ecosystem of people and where gaps might pop up: 

People strategy, leadership and culture: Does our people strategy support our growth initiatives (and, more importantly, is there a strategy)? Is the right leadership development system in place, including a robust global mobility program? Will our culture support the execution that’s required?

  1. Reward: Does our compensation and benefits strategy still fit? Is pay competitive? Are there areas to be restructured that could free capital for re-investment?
  2. Talent acquisition: Do we need to pull in brand-new talent by strategically hiring from the outside or by making strategic acquisitions?
  3. Organization design and operating model: Have we designed an organizational structure and operating model that have clear links between all our capabilities?
  4. Change management and communications: Do we have the right program management structure and strategic change methods for execution? Do we know who the real information brokers are in the organization who will informally drive the change?
  5. Technology: Do we have the right technology to support the kind of employee experience our people need? Are we leveraging workforce analytics to retain our top-performing people, and are we conducting frequent employee surveys to understand the pulse of the organization?

These are just a few of the talent areas that are important to understand.

Odds are you won’t need to revamp all of them. But a carefully designed and innovative talent strategy underlies the successful evolution to get growing.

 To read more details on the strategic changes you may need to make to stretch your growth, read the full article, “Grow from your strengths” in strategy+business magazine.

Hide and Seek With Healthcare Profits

Little did I know that the children’s game of Hide and Seek would provide valuable lessons for a life in business. But success requires trying new strategies, moving in different directions and venturing away from the illusion of comfort that home base appears to provide.

To win at Hide and Seek, you had to be flexible in your thinking to find great hiding spots, had to make a decision while the countdown was ticking and had to move fast if you wanted to win. Managing healthcare profits in a post-ACA world works the same way.

Hide and Seek is a business strategy used in healthcare like no other industry. The key players resist transformational change and use the power of political lobbying, fear, confusion and an almost unbelievable – you can’t make this stuff up – kind of limited transparency.

By lack of transparency, I mean like playing Hide and Seek with no moon in the sky and wearing all black. There’s no way you were going to find my hiding place!

Fully insured health insurance companies and HMOs are exceptional at playing Hide and Seek, with profit margins hidden in the premiums.

Besides the Affordable Care Act and its new extra charges and taxes, you have to look really hard to find out where the contingency margins are hiding in the premium calculations – especially when you consider that there is very limited transparency in the actual healthcare renewal calculations. Ask yourself – did your employees’ good health and low healthcare utilization inure to your corporate bottom line or to the insurance companies?

So, where are the good profit margin hiding places in the fully insured premiums? Let’s take a peek at the ones hiding inside the employer-paid healthcare premiums? For starters, try looking at the pooling charges, medical claims trend factors, demographic load factors, pharmacy claims trend factors or the capitation trend factors.

Of course, there are more profit margin hiding places in the retention factors, IBNR reserve, claim stabilization reserve, pending claim reserve and the earned interest rate assumptions built into reserves.

Don’t limit yourself playing Hide and Seek with your local fully insured health insurance company or HMO, because the game is rigged against you as long as there’s no financial transparency, profits can be hidden, your company’s good claims subsidize bad risks and you have no way of being rewarded for good claims.

The situation reminds me of the poor kid who always lost at “Bubble gum bubble gum in a dish” or “Engine, engine #9 going down Chicago line” to pick who was going to be “it” first. He didn’t know he was playing a rigged numbers game.

The answer was hiding in plain sight… and no one told him.

And, now you know!

How the ‘Internet of Things’ Affects Strategic Planning

When it comes to technology, the boardroom has been learning a new language: mobile, social, cloud, cyber security, digital disruption and more. Recently the National Association of Corporate Directors released an eight-part video series on the board’s role: The Intersection of Technology, Strategy and Risk. We have spent much of the past year focused on cyber security, an essential discussion given the widespread theft of intellectual property, privacy invasions and data breaches. A report on cyber crime and espionage by the Center for Strategic and International Studies (CSIS) in Washington, D.C., last year estimated that cyber crime costs the global economy $300 billion a year – an entire industry is growing around hacking! Research by PwC shows cyber insurance is the fastest-growing specialty coverage ever – around $1.3 billion a year in the U.S. As our boardroom agendas often get filled with discussions on risk, I asked Frontier Communications board director Larraine Segil how to shift the conversation to strategy. Larraine has a keen focus on opportunity and suggested we delve into solutions for governing “The Internet of Things.”

What exactly is the Internet of Things, and what are the implications for business strategy?

Think about connecting any device with an on and off switch to the Internet and to each other. This includes everything from cell phones, thermostats and washing machines to headphones, cameras, wearable devices and much more. This also applies to components of machines – for example, the jet engine of an airplane. If the device has an on and off switch, then chances are it can be a part of the Internet of Things. The technology research firm Gartner says that by 2020 there will be more than 26 billion connected devices. Think about Uber, the company that connects a physical asset (car and driver) to a person in need of a ride via a website. That simple connection has disrupted the taxi industry.

Airbnb has done the same for the lodging industry by directly connecting people with spaces to rent to those in need of accommodations.

What does this mean to for our companies? Larraine, what are you thinking when you hear about the Internet of Things for business opportunities? As a director, how can you help directors govern in this fast-moving digital age?

Frontier Communications provides connectivity services to a national customer base primarily in rural areas and is integrally involved in the Internet of Things. Frontier has a number of strategic alliances with companies that develop and market those very devices – or “things” – such as the Dropcam camera, a cloud-based WiFi video monitoring service with free live streaming, two-way talk and remote viewing that makes it easy to stay connected with places, people and pets, no matter where you are. Other alliances expanding the “things” will be introduced in the rest of 2014.

As a director, it is critical to be educated constantly about new trends, products and opportunities – competition is fast-moving, and customers are better-educated about their options than ever before. Strategically, the board has to think way ahead of the present status quo – and with the help of management and outside domain experts, explore opportunities for alliances. This requires using strategic analysis at every board meeting (not just at one offsite a year) and welcoming constant director education and brainstorming both within and outside of the company’s industry. The board should continually identify and evaluate strategic directions to keep the company fresh and nimble.

Remembering that we’ve only just begun, here are some critical questions boards should be asking about technology and the Internet of Things:

1. Are you including strategic discussions around technology at every board meeting?
2. Do your strategic directions include alliances within and outside of your industry?
3. How would you assess your current level of interaction with the chief information officer and chief technology officer? What can be done to improve the effectiveness of communications with them?
4. As a board, how are you helping to guide your company in innovative directions, taking into consideration disruptive technologies, competitor alliances and new ideas or skills coming from outside your industry?

Go on Offense Using Social Media

The plane pushed back as I settled into the sports section of my local paper. Just as I was getting comfortable, the pilot made an announcement that our flight was going to be delayed for a short time. We ended up sitting on the tarmac for two hours.

I missed my connection, and, to make matters worse, the customer service personnel at the connecting hub airport were anything but service-oriented. Frustrated beyond belief, I posted a message on Twitter, my Facebook page and on several travel sites, “ABC Airlines SUCKS!”

Much to my surprise, less than an hour later I got a post to my rant signed by the airline's customer service department, with a link to their website. The link led me into a chat room where I described my experience. A service representative apologized and offered me an upgrade on my return flight home the next day. My frustration ebbed. I even posted another Tweet: “Thanks, ABC Airlines Customer Service!!”

The experience taught me two valuable lessons: (1) With the advent of social media, unhappy customers can do real damage to a company's reputation; and (2) companies can no longer wait for their customers to call and complain. They must engage their customers in real time.

Since that experience I've been focused on how our company can leverage social media to improve our customer service. The effort required me to better understand all that social media entails. Fortunately, we have a lot of experts – the young people who work for us. They use social media like a second language. It's incorporated into their lives.

The same approach applies to a successful social media strategy for a business. The organization must incorporate social media into its day-to-day operations. Most companies make a common mistake: They set up accounts on the popular social media tools like Facebook and Twitter but don't do much after that. In effect, social media gets treated as an outlier.

Opportunistic social media

Many people think of social media as Facebook and Twitter—but those are just tools. I view social media as the ability to engage in social interactions online with people you know and don't know. You engage with social media through a series of websites and applications. But it’s the collective power to communicate that makes it so powerful.

Imagine if you could “communicate” regularly with an existing policyholder. You wouldn't need to wait until some triggering event like a problem with a bill or frustration with a claim occurs. Research shows that such regular contact would increase an insurance company's retention rate.

Here's an example of opportunistic social media: When there’s a potential major weather event, use social media sites to offer tips on how to secure a home and inventory personal holdings. The information will come up on searches and drive traffic to both your social media sites and website. A company can even change its homepage temporarily and put up a splash page: If you’re in this area, click here; if not, click a different button for the homepage.

People don’t think about insurance often. That’s why opportunistic use of social media is effective. People will be more inclined to read something from an insurer when they’re concerned about their immediate safety and security.

Going on defense

Social media poses challenges and dangers for any company serving the public. Consumers now have power to wreak havoc. Anyone who feels, rightly or wrongly, abused by an insurer can use social media to post an angry screed: “ABC Insurance Co. stinks.”

That can do real damage to your brand. Negative reviews get aggregated, and, if there are enough of them, they’ll show up at the top of an online search of your company.

Customers tend to post only when they’re angry with their insurer. Happy customers typically remain silent. How can you find out about problems customers are having before they are angry enough to call? Establish a team dedicated to scouring all social media for comments about your company.

If I had any doubts about the impact of social media, the view out my window provides ample evidence. Located in the middle of Silicon Valley and just a short walk to Facebook’s headquarters, I'm surrounded by start-up companies bringing new services and tools to the digital world. The social media revolution is here to stay.