By Elena Donets

    AYALON INSURANCE – TAKING THE INNOVATION LEAPAn interview with Roni Lichtenstein Shani, Deputy CEO, Head of HQ, Innovation, and HR

    Roni Lichtenstein Shani is Deputy CEO, Head of HQ, Innovation and Human Resources at Ayalon Insurance. We had the opportunity to discuss the changes that Ayalon is going through with regard to digital transformation and innovation.

    Innovation means many things to many people. Today at Ayalon what does innovation mean and why is it considered important?

    Ayalon is a traditional insurance company, the 6th largest in Israel and, as a veteran company, contains a lot of manual processes and certain legacy systems in its backend. The insurance sector is on the verge of a revolution and technology will change its entire value delivery chain over the next few years. As part of the strategic change, we have implemented in Ayalon in the last three years, innovation has been positioned as one of three key central tenets. We aim to see innovation being applied to our products, services, processes, and most importantly, culture and thus deliver higher value to our customers and distribution channels to exceed the standards of service that are expected in our industry.

    What sort of action did you take in order to achieve this goal?

    The first step we took was to launch a digital transformation effort and begin to deliver a new and improved digital experience to our customers and agents on top of our existing backend legacy systems. The main purpose was to improve our services and create new value for them.
    This approach allowed us to start moving quickly and was the foundation on which we could then continue to build innovation as an ongoing part of what we do. We built a digital team that is divided among various areas of the company and serves as a foundation for driving the innovation message. This team receives training in various advanced topics and is expected to be one of the main drivers of the digital transformation.

    In addition, we recently started asking our employees across the company to propose their own ideas as part of an innovation hackathon. This is another key part of our approach since we want innovation at Ayalon to be both top-down and bottom-up. Knowing that employees might be apprehensive about participating – after all, proposing an innovative idea places people in a vulnerable position – we took certain steps such as recruiting innovation ambassadors and being very accurate with the messages that were sent. It was very important for us to create a process
    and an experience for our employees that would be sustainable, as our intention is to turn this into a regular part of what we do. With this, we plan to achieve the cultural impact that we are looking for. To our delight, over 10% of our employees submitted ideas and after narrowing them down to ten finalists, a panel of judges composed of our senior management team, CEO and chairman, selected the top ideas which will be included in our 2020 work plans. Another aspect that came out better than we expected was that even though we planned to select only three ideas, we ended up with seven ideas selected to be implemented in 2020. And so with our top-down approach complemented by the bottom-up activities, we are making innovation more pervasive than ever.

    While management teams often regard bottom-up innovation as a benefit to employee engagement, the common belief is that the really important stuff will come from outside the company or from technologists. Having been part of such an internal ideation process, what was your impression of the quality from the final ideas?

    Going through a process like this caused a shift in our mindset and was truly moving. We realized that employees from various areas of the company had really fabulous ideas that could potentially make a great impact with very little investment. Our employees are intimately familiar with the work processes and can propose solutions that do not require external technologies or fundamental changes in the core IT systems and are relatively simple to implement while still having a significant potential impact. There is something about being in the field, experiencing challenges firsthand while not being familiar with any sort of limitation that centrally-managed digital teams constrain themselves with. This creates opportunities to complement the essential work being done by the digital team with workforce generated ideas that are feasible, smart and innovative. I can also say that we meet a lot of startups and evaluate whether to implement their technologies at Ayalon and on average, ideas presented by employees are much more suitable to our needs than the ones we hear from startups. Employees know the lay of the land, so to speak, and understand the business, while some startups do have amazing potential but are still on the outside looking in when it comes to the intricacies of the insurance business. I can also say that this opinion is shared by the company’s management team, CEO, and chairman who were judging the employees’ ideas. They clearly stated that besides their personal enjoyment in taking part in the process of bottom-up innovation and the value they found in it, their expectation is to see some, if not all, of the ideas that were selected become real-world implementations and deliver value to our customers and agents.

    We sometimes encounter management teams and CEOs that talk about innovation and demand it from their companies but do not go beyond empty rhetoric and localized attempts. In what ways does the management team at Ayalon actually support innovation beyond its central part in the strategy statement?

    Firstly, you can see from the outcomes that we currently do both top-down and bottom-up innovation at Ayalon. We achieved this through the following elements:

    1. Education – It starts with preparing the hearts and minds of both management and the workforce to the innovation aspect of the company’s strategy. Managers, both senior and the extended management team, routinely go through experiences and trainings that are aimed at shifting their mindset into ones that are receptive and supportive of innovation. The workforce hears about innovation and digital transformation as critical aspects of our work plans from the CEO whenever he speaks at internal and external events and this conveys a strong message. More than that, as part of our “Ayalon college” program, which was traditionally aimed at teaching employees insurance-related skills, we have started providing content related to digital transformation.
    2. Budget – Management allocates the budget that is necessary for digital transformation and innovation so that these projects can be carried out and implemented within the company work plan.
    3. Time – One of the main bottlenecks of innovation is the inability of employees to allocate work time for the purpose of initiating and promoting innovation. The management team is engaged and supportive of activities that consume employee time with the intent that this will provide a spark of bottom-up innovation. For example, we saw very clearly during our recent innovation hackathon that participating employees were given the required time to develop their ideas and that now the winning teams are going to get the time required to pursue their ideas further. The mentors in the event who were senior Ayalon employees were also given the time that was required for their participation and was a very important contribution to the event.

    These are all clear indicators to the fact that the management team is backing its strategy decisions with action.

    What would you say are the main challenges you’re still facing in the quest to implement innovation at Ayalon?

    I think that the two main challenges are:
    ● Integrating the new solutions and technology from our partners into the insurance legacy platform – This is a prerequisite for any established company’s ability to innovate, simply because any idea that requires access to that backend must get access somehow and this interface layer is essential for that to be possible.
    ● Embed innovation as part of the company’s culture – While we did run an innovation hackathon, this was done in the format of a one-time event. Our current challenge is to take this format and turn it into a long term integral part of the Ayalon culture.

    What advice would you give innovation managers in the beginning of their journey?

    I believe the most important tip I can share with innovation managers new to their role is the need and opportunity to test and learn while building new solutions. Do not try to over-engineer every element involved. Simply try to take the necessary action to allow for positive outcomes to occur. The other important point is to focus on customers’ needs first and on the business model later. Focusing on solving pain points for customers will help build new and innovative solutions over time. Last but not least, keep in mind that innovation is a journey so be prepared for it and stay consistent with the long term vision.