delta dental feb252010 sviokla
TRANSCRIPT
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Delta Dental: Unleashing the power of your people, ideas, customers and capital
February, 2010
Dr. John J. [email protected]: www.sviokla.comHarvard Business Review blog: blogs.hbr.org/sviokla/twitter: jjsvioklacell: 617.510.3565
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What’s Possible?
Setting the Stage for the Self-Organization Revolution: 3-Clouds
Internet… a connectivity utility – Capitalism by its nature connects
Source: David Reed
Cloud 1
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What’s Possible?
Can you believe this has happened in less than 20 years!
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What’s Possible
The Infinite Bazaar! Everything a company could want!
Cloud 1
Cloud computing ... a resource utility – competition brings new resources
Cloud 2
Source: David Reed
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“The owner of the memex, let us say, is interested in the origin and properties of the bow and arrow. Specifically he is studying why the short Turkish bow was apparently superior to the English long bow in the skirmishes of the Crusades. He has dozens of possibly pertinent books and articles in his memex. First he runs through an encyclopedia, finds an interesting but sketchy article, leaves it projected. Next, in a history, he finds another pertinent item, and ties the two together. Thus he goes, building a trail of many items.”
What’s Possible?
“As we may think…” -- Vannevar Bush Conceived of the Memex
Source: the Atlantic, http://www.theatlantic.com/doc/194507/bush
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What’s Possible?
Everyone: Customers, Employees, & Suppliers are Always On
The 3rd cloud –mobile, social interaction utility – Human connection is the Killer App of all Killer Apps
Cloud 1
Cloud 2
Cloud 3
Source: David Reed
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What’s Possible?
Reed’s Law: Self-Organization Dominates ALL other Approaches…
Self organizing networks Dominate all other network forms
Number of Users = N
Valu
e o
f a N
etw
ork
Value=2N
e.g. Face bookValue=N2
e.g. Others
Value=Ne.g. xxx
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Competitive advantage derives from the optimal mix.
Choices for Executives
In order to unlock the power of self-organization you need to examine where you are open and where you are closed!
Closed OpenDimensions
Talent Hire and train internally Outsource everything
InnovationProprietary solutions with captive resources
Open innovation
ServiceInternal service staff, all contacthandled by the company
Dell storm with wiki’s, self-help, and other peer to peer solutions
Capital Internal to the company Open capital, where people finance anything, as with Indie GoGo
Infrastructure Company owned technology and logistics
Rent everything from Amazon & UPS
Marketing We control it all and make the message
We engage the audience ala Seth Godin, and American Idol.
Leadership Getting people to look in and build Getting people to look out and link…
Degree of Openness
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Productivity is the key Target
EBITDA/Employee by No. of Employees P&C and Multiline Insurers - 2004-2008 Avgs.
0.1 1.0 10.0 100.0 1000.0
-100
-50
0
50
100
150
200
250
300
350
400
XL CAPITAL
AIG
UNITRIN
ASSURED
KINGSWAY
HORACE MANN
WESCO
ALLSTATE
HARTFORD FIN SVCS
CINCINNATI
PROGRESSIVE
OLD REPUBLIC
ERIEASSURANT
HCC
BERKSHIRE HATHAWAY
STEWART INFO SVCS
CNA
AMERICAN NATIONAL
MERCURY
SELECTIVE
FIRST AMERICAN
INFINITY
MARKEL
ALLIANZ
TRAVELERS
ARGO AMERICAN FIN GRP
STATE AUTO
LOEWS
CHUBB
NAVIGATORS
BERKLEY
UNITED FIRE & CAS
SAFETY
ALLEGHANY
RLI
HARLEYSVILLE
HANOVER
AXA
FAIRFAX
ZENITH
PROASSURANCE
FIDELITYLANDAMERICA
ONEBEACON
AMTRUST
TOKIO MARINE
Employees (Thousands, Logarithmic)
EB
ITD
A/E
mplo
yee (
$M
M)
Note: Chart excludes low outlier Syncora (100 employees, -$1.9MM EBITDA/Employee) and high outliers Aspen (400 employees and $830MM EBITDA/employee), Axis (600 employees and $1.1MM EBITDA/emp)., and Allied (300 em-ployees and $1.1MM EBITDA/emp.)
Smaller Larger
Less
pro
du
ctiv
e
M
ore
pro
du
ctiv
e
Media
n $
11
3K
EB
ITD
A p
er
em
plo
yee
Median 4,100 employees
Quadrant 3Higher labor productivity, Smaller
Quadrant 4Higher labor productivity, Larger
Quadrant 1Lower labor productivity, Smaller
Quadrant 2Lower labor productivity, Larger
3 4
1 2
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Implications
Implications for your Business
•How efficient is your self service?
•How well are your marketing your firm?
•Do you rent or own your infrastructure?
•Do you take advantage of the whole world of talent?
•Where do your innovations come from?
•Whose money do you use?
• Are you and open or a closed leader?
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Successful Self-Organized Systems Have the Following
•Deep skills
•Shared purposed
•Trust
•Shared situational awareness
•Clear limits and boundaries
•Dynamic decision rights
•Shared values
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Conclusion
Unlock the talent of your people and the passion of your customers…
1
Educate the organization on what is possible
2
Review your organization from a open versus closed perspective.
3Consider the places with the highest return and least difficulty:
Likely first place: Customer Service
4
Perform an integrated plan and execute, execute, execute
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Let’s Continue the Conversation
•Email: [email protected]
•Blog: http://blogs.hbr.org/sviokla/
•Web: www.sviokla.com
•Twitter: jjsviokla