Speed-To-Market Idea: Try Packaging Expertise With The Product
If you have a great sales idea that youd like your company to use, what do you do?
If youre like most of us, you probably get on the phone and call the senior vice president of marketing at your company. If the VP agrees its a great idea, he or she will probably ask you to write it down and send it in.
Once you do that, the VP takes it to Legal for compliance approval. Then it goes back to the VP to develop sales materials and training aids. Once thats done, it goes back to Legal for approval of the additional materials. Finally, the idea goes back to the VP and is ready for marketing–at least, if its still viable!
Thats a huge and cumbersome process, and it has pitfalls for you, the original innovator.
You see, if too much time passes between your call to the VP and the final legal approval, your idea may have lost its window of opportunity.
New products are coming to market every day, and new regulations affecting those products are also issued continuously, so your window can sometimes be surprisingly small. Unless your company can get new ideas to market quickly, itand youcould lose out, no matter how great the concept or execution.
Companies need to be able to adjust to the marketplace as quickly as the marketplace makes adjustments. Or, to paraphrase Jack Welch, the retired chairman of General Electric: If the rate of change outside your company is greater than the rate of change inside your company, then your company will not be around much longer.
That statement could not be illustrated more aptly than with the ability to get new ideas into the insurance market.
Clients have recounted stories about lost opportunities due to product development logjams of all kinds.
For instance, logjams can result when someone in the review and approval process does not feel comfortable with an idea. Usually, thats because the person does not know as much as he or she would like about the idea. This may be particularly true if a new sales idea relies on tax and legal issues–sometimes called “loopholes”–that demand a full working knowledge of the substantive area of law or taxation.
In addition, as companies have outsourced expertise, it happens that the expertise is sometimes no longer in-house to review a new concept at a level the company would desire. That, too, can cause an idea to languish. In one case, the sales idea and materials sat on the corner of someones desk for several months due to that reason. This results in a “slow to market” process that makes everyone unhappy, field and home office alike.
Is there a solution? I think so. Try packaging some of the necessary expertise right in with the concept materials.
Let me explain with an example: One software company president told me that some of his insurance clients were not using his companys product as effectively as they could.
In examining this, he found that certain insurers were using versions of his software that have been superceded by newer versions, sometimes by several years. The reason? His company was developing new software much more quickly than some client insurers could review and approve. Hence, the ineffective usage problem.
Sensing the problem may have reflected the insurers’ lack of certain in-house knowledge, he proposed bundling the expertise the insurers needed right into his product offering.
In particular, he asked me to review the software for the National Association of Securities Dealers, the National Association of Insurance Commissioners, and general liability issues. He also asked for an opinion letter detailing the review process.
Furthermore, after the recommended changes were made, he asked for a statement saying that, in my opinion, the software is compliant within a specified framework–a framework that, based upon my experience, would be acceptable to the insurer.
The approach was new to me, but, when all was done, the results were stunning. The package the insurer received from the vendor helped the insurer speed things up dramatically.
Thats because the vendor delivered not only the software but also the expertise necessary for compliance work. In addition, the software company provided training materials in conjunction with the software and the compliance opinion.
Not only has the product development path inside the insurer been made much shorter, but also, when the materials were filed with regulatory authorities, they were approved with hardly any changes.
In looking at the insurance frontier, I believe a similar approach could be applied to any aspect of your business where more than one area of expertise is needed, or where the needed expertise may not be present or as deep as desired.
Consider having the vendor bundle everything together. You may be surprised with the results.
Douglas I. Friedman, a partner in the Friedman & Pennington, P.C. law firm of Birmingham, Ala., is national counsel on estate and business planning for insurers. E-mail him at doug@
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.