When Debbie Brackeen joined auto insurer CSAA, she didn't want innovation to be a sideline. This is how she knitted it firmly into the rest of the business.
Innovation, by definition, is not predictable. It is new, it can be disruptive, and – especially at large companies that have been around for a long time in mature markets – even incremental changes can seem big to people.
“I think there’s always the risk, and especially the larger the company, is that innovation gets disconnected too much from strategy,” says Debbie Brackeen, chief strategy and innovation officer at CSAA Insurance Group, on a recent episode of the CVC Unplugged podcast.
It’s tempting to see strategy and innovation as, if not opposing, then sometimes clashing, forces. One involves long-term planning, while the other can throw a wrench into the plans and force them to change. It’s Brackeen’s job to find harmony between them.
The happy marriage
Brackeen is veteran of corporate venturing, with previous roles as global head of Citi’s innovation network, and vice president of strategic alliances at HP. In many previous roles, however, innovation and strategy were not particularly tightly knit. At HP, for example, while her team handled mergers and acquisitions and were building ventures, they did not necessarily see themselves as part of the strategy side despite building things that would benefit the company down the line.
When Brackeen took the role at CSAA, it was partly because the role would finally allow her to combine the two functions.
“I call it the happy marriage of strategy and innovation,” she says.
“To me, especially in today’s world, where the pace of change feels like it’s always accelerating, and to a large degree fuelled by the innovation that’s always happening in technologies, I think strategy can be a little bit more like a creative act, and I think strategy and innovation can inform each other in really complementary ways,” she says.
One of the early decisions Brackeen made together with the then-CEO was to – contrary to the advice of many within the company – not separate the innovation functions from the wider corporate construct. Many innovation teams do this to gain more autonomy, but Brackeen was worried it would lessen the chance of their projects being taken seriously by the rest of the company.
“I have found you can do some really cool things and nobody cares because [it’s] disconnected, it wasn’t invented here.”
One of the best examples within CSAA of how the “happy marriage” bore fruit in a big way is Mobilitas – its internally incubated insurance platform for the mobile gig economy.
When Brackeen joined CSAA, the company had a BHAG – a big, hairy, audacious goal – of generating $1bn in new revenue from markets it was not yet part of. At the time, the company was just shy of $4bn, with some two-thirds of revenue coming from personal auto insurance.
Uber and Lyft were still on the rise, and automobile OEMs were toying with the idea of subscription-based business models. From an insurance point of view, this opened up a new opportunity parallel to the standard buy-your-car-then-insure-it model.
Instead of just insuring individual drivers, then, it got them thinking of insuring corporate fleets that operate under something of a micro lease model. Recognising that drivers in the gig economy may be shifting in and out of personal and commercial insurance on a daily basis – depending on whether or not they have a passenger in the car – they knew a new solution was needed.
“Thinking about how would we go into a new market that could create a billion dollars of growth in a decade was informed by the innovation going on on the outside,” she says.
“People that we insure today driving their Ford Fusion, they decided they’re not going to own their car and have their own insurance anymore. They’re just going to subscribe to this car from the Ford Campus Service and they’re going to get the insurance. So don’t we want to be able to cover those people too? They’re not that different from who we’re covering today, but it’s a different business model.”
As an actuarial science-based business, insurance companies rely on past data to determine policy. When Brackeen joined, the company had been effectively serving one customer – auto and home insurance may be two different things, but the end user is the same and there is plenty of data on them to rely on. The sharing economy is a new beast, and the relative dearth of historical data made it a challenging prospect.
Mobilitas’ role within CSAA only grew after a CEO change in 2019 and the subsequent roll-out of the company’s 10-year Destination 2030 strategy, in which commercial insurance like that of Mobilitas plays a much larger role in the business.
What was just a few years ago a foray into an innovative space is now an integral part of the corporate strategy.
Innovative by design
One of the things Brackeen says she loves about CSAA is the explicit and deliberate way that they go about designing a culture of innovation, as well as the strong buy-in there has been from the top throughout her tenure. Innovation can come from anywhere in the company, but without support from the top brass, things can quickly die in the water.
“If you’re going to start a new garden in your backyard, what is the first thing you do? You get you or you get somebody to go start digging up the soil and tilling the soil. The soil matters. Culture is like the soil.”
Company-wide initiatives like innovation 101 training, pilot programmes, design thinking, lean startup and agile training were part of that cultivation. Everyone up and down the service leadership chain, for example, had an innovation goal, with supervisors having to pick an idea, test it and glean learnings from them.
“Humans are human, right? They don’t like change. So that took a lot of effort and work to just keep trying to reinforce the importance strategically of diversifying into a new growth segment,” she says.
Every company is unique and there is no silver bullet. How you go about establishing a culture of innovation will depend on the particularities of each company, according to Brackeen.
“You’ve got to work with the piece of clay that you get,” she says, adding that system thinking and being able to look at things holistically goes a long way.
Anywhere you try to bring in new things from the outside, be mindful that there will be growing pains, as well as blind spots and problems you’re unaware of until you come across them. You need to be able to not just have strong convictions but also have the drive to get it over the line.
“I can be stubbornly persistent if I really believe in something, and that’s probably what it was.”