Matthew Smith, head of the Lean Centre of Excellence at AIG and Matthew Michael, academy manager at AIG, share the insights and experiences of launching and scaling a lean programme across multiple geographies around the world.
AIG is the world’s largest insurance organisation, with more than 88 million customers around the globe. With a network of over 64,000 people in more than 90 countries, the scale, breadth and complexity of the organisation is significant.
We started our lean journey in late 2012, following a couple of small pilot schemes to deploy process improvement across the organisation. The commitment to our current approach resulted from a combination of factors. The operations in one country took a radical new approach to the redesign of its workspace and saw some immediate gains in staff engagement and morale. The then-CEO of the EMEA region, Rob Schimek, was delighted with these early results but challenged the team to go further and look at how we could also re-engineer the way we worked.
To answer the challenge, a team, led by Jeff Heintzelman (then country general manager) began a six-month pilot focussed on using lean principles to redesign processes within the business, and saw some early benefits. However, a combination of holiday periods and a change in focus meant few improvements were actually sustained. Things went back to the way they were before.
It’s a common story. The team realised that to sustain a new way of working, thinking and acting every individual in the business needed to feel part of, and ownership for, the changes being made.
A new way of working
Nevertheless, with these early successes the business recognised that a lean methodology could unlock substantial benefits in delivery for customers, people leadership and simplifying organisational complexity. To realise these, the Way of Working (WoW) program was launched in EMEA under the leadership of Rob Ryan, EMEA program director. WoW is the AIG name for lean transformation and seeks to encapsulate the focus on providing a WoW experience to our customers through a better way of working.
As a team and an organisation we are aware of how early we are in our journey. To achieve true cultural transformation to the new Way of Working will take time, but in the last 18 months significant progress has been made.
The journey begins
Our approach to deploying lean is to work with a business area for 14 weeks – what we call our deployment phase. Each business we work with represents a stream of work and at any one time we will be working with multiple business areas as part of a wave of deployment.
Our first wave started in January 2013 within one of our front office underwriting departments. We had gathered together a cross section of talent from across the organisation to form the deployment team. It was new for everyone as no one had any prior lean experience.
There were many lessons from the first wave:
- WoW moves fast – the pace that WoW moves is much greater than the organisation had previously experienced;
- Things actually changed – the focus on not only understanding the current state, but designing the future state and then implementing tangible change all in 14 weeks was a real cultural difference – but a very positive one as the staff at the front line felt like WoW was making a difference;
- The people designed their own destiny – where other change activities in the past had been designed remotely and then driven top down to the business, WoW felt more like a contact sport and the staff were all personally involved in designing their future;
- Leaders not bystanders – it is well documented how important the role of leadership is in successful change. Leadership engagement was strong from the outset and this helped set the tone for the level of impact we achieved.
There were also challenges that we hadn’t seen coming:
- Competing with other change initiatives – as with every large organisation there is a lot of change underway. Understanding how these changes were aligning versus undermining remains a key challenge;
- Old skills in a new world – we had brought experienced, talented individuals into the programme. The biggest challenge was not only learning new skills but undoing old paradigms. Helping our own people through the change curve remains a key area of focus. The lean approach forces us to think and act differently and places value and emphasis on things that previously seemed immaterial;
- Monumental momentum – The impact and positive noise around the organisation was at the time actually much wider than the areas and individuals we had engaged. This was hugely positive in one sense but equally set an expectation that needed to be met.
The first wave was a success. Against our four objectives of improving customer service, building a culture of continuous improvement, increasing lean capability and releasing capacity we saw strong results and the business continued to see strong performance and growth through 2013 and beyond.
We moved into our second wave with confidence, but reality hits hard. Where we felt good tailwinds in the first wave, we were sailing into a head wind now. Many things were happening that were out of the control of the business or the programme. Leadership changes were significant, resistance was higher and we encountered cultures within cultures.
It was clear that for the programme to be truly transformational and sustainable on a global scale, what had got us this far, would not get us further.
We began work on developing the critical infrastructure needed to underpin, support and scale the approach. The analogy we used was that of building a house.
Every house could look different and our approach needed to be flexible to enable the business to achieve its objectives using WoW. However, every house has to have solid foundations to a certain standard and requires infrastructure that we often take for granted.
It was this infrastructure we had to focus on building, at the same time as continuing to deliver the deployment activity. No-one was going to give us six to nine months to get things ready first. We had to manage multiple priorities.
We stood back and asked ourselves some searching questions:
- What needs to happen for this to be truly impactful and sustainable?
- What do we have to change in the way we work?
- Who needs to be involved to help reinforce the change?
- How will we know we are on track?
- How will we engage the organisation and keep them engaged even if we won’t be able to work with them for some time?
As always, there were multiple answers to the questions and we needed to put a framework in place to at least give us some clarity and parameters to work towards.
We resolved to develop a Centre of Excellence that would be responsible for the following elements:
- Strategy & planning – Where are we going? When? Why? How will we operate when we get there?
- Engagement & mobilisation – How will we get off to a flying start with each business? What do we need to understand before deployment starts? How can we identify key areas of focus and opportunities, the levers for transformation?
- Playbooks for deployment – What has to happen during deployment? In what order? How and why? What principles can we fall back on to help us in new environments? How can a structured approach improve our effectiveness in deployment?
- Design standards – What are the core elements of the WoW management system that are required everywhere? How can we standardise these to help rapid implementation but with local tailoring?
- Understanding and capability building – How do we build the skills we need to be successful? What skills and understanding do others need? How do we build this ethos into the DNA of AIG?
- Maturity and continuous improvement – If sustainability and continuous improvement is the ongoing outcome how will we assess our maturity on the journey? How will we measure the ongoing benefit of the new Way of Working?
- Governance and communication – What is the benefit of the investment? How are we sharing successes with key stakeholders?
- One Way of Working – How do we ensure there is global consistency? How do we maintain alignment in what we do and how we do it?
In answering all of these questions we have had to work to some key principles:
- Know your goal – Deploying Way of Working has long-term implications. Being clear on what a truly sustainable AIG Way of Working means is critical. It means 64,000 people feeling it belongs to them;
- Ownership – Ensure people know their roles and responsibilities and focus on the big things that give us the big wins;
- Prioritise, prioritise, prioritise – There will always be more problems or areas of improvement to tackle than time to tackle them;
- Get good talent in the right roles – Having people with the right intrinsic mindset and behaviours and lean skills is critical. The journey is hard, so resilience and the ability to build for the long-term, while keeping momentum in the short-term is critical.
Over the last 12 months, we feel we’ve made tremendous progress in developing a strong foundation and infrastructure that is being leveraged globally. Over the last few waves of deployment we have felt the benefit of this investment:
- We have increased our own efficiency & effectiveness by 20%.
- We have expanded across the UK, Belgium, Germany, Italy and the USA and over 1,700 staff have started their WoW journey.
- We have worked with LCS at Cardiff University to accredit our internal capability building programme, helping us to get our good talent in the right roles.
- We have started to move talented individuals from the WoW team back into key business line roles.
- We have moved through our first scale up moment moving from single business deployments to multiple deployment in multiple countries with the complexity of language, culture, local working practices and local markets.
- We have introduced a continuous improvement team that completes regular, follow-up engagement with earlier waves – both to help sustain the initial improvements, introduce innovations from subsequent waves, and identify further opportunities
We also realise that we don’t know what we don’t know. We must both listen and contribute to the wider lean community and understand the approaches and insights of others. We have developed good partnerships with key organisations in academia, consultancies, and industry – both our own and others. We believe we can both add and gain value from partnerships but they require investment of time – a precious commodity for anyone driving a lean transformation!
Evolving our Methodology and approach – We are now in our next key scale up phase – moving from a functional focus on lean transformation to a focus on the end-to-end customer journeys through the organisation. It’s a challenging time as we are swimming counter to the natural current of things – most large organisations like ours are dominated by functional silos. Our challenge is to refocus on integrated delivery across customer value streams.
We are also expanding our activity into areas of the organisation that play critical supporting roles. For example, engagement with our human resources colleagues to align the organisation’s training curriculum, competency frameworks and the way we assess employee engagement is key to establishing the reinforcement mechanisms required to ensure long-term sustainability.
As we look backwards we feel proud of the distance we’ve covered and the impact we are making. However, when we look ahead we know the journey is long and that there will be bumps in the road for us to contend with.
We believe that our absolute focus on learning lessons means we have built the foundation for a sustainable, successful lean journey in AIG.