More and more companies are creating the role of CDO, Chief Digital Officer. The CDO focuses digital transformation expertise in a single person, ideally also one that sits on the Executive Board. Critics of the CDO approach point out that digitalisation does not fit into a single role and is a matter for everyone. As CDO of ERGO, Mark Klein says: "I would be the first to stress this fact". But it is a major effort to get a transformation process moving in the first place. This is why this focussed expertise is important. "I am much less a digital chief strategist. Much more I see myself as a transformer, Minister of Culture and digital entrepreneur in one.“
"Insurance policy number": 21 letters in all. This is a typical insurance term that User Experience Designers in our Digital Factory would be reluctant to use. But these 21 letters have become an issue at ERGO. The insurance policy number was the key identification element in an online service that we developed for our customers. The customer feedback we gathered after every sprint was clear: our customers want to feel secure when logging in and this 21-letter phrase gives them this feeling of security.
I keep annoying my people with the same question: were customers sufficiently involved in the development process? It’s not enough to ask them once. The customer needs to be part of the process from start to finish. And this example illustrates a key element of digitalisation: developing new solutions hand-in-hand with the customer, customer-centricity and service orientation with all our digital services.
Simply digitalising things doesn't make sense. Digitalisation needs a clear goal, a sense of why and for what purpose technology is to be used. One such objective might be greater customer focus and more customer benefits. From this perspective, at ERGO we are constantly trying out new technologies at very early stages of development.
What impact does a technology have on our business model? Can it improve insurance? Are totally new business models possible or could it even make individual insurance services obsolete? We are constantly asking ourselves these questions. Questioning, classifying, testing – this is elementary CDO business.
But that alone would make us a pure think tank. We are a factory rather than a think tank. Our digital investment is built on three pillars: making our traditional business model more customer-friendly through digital technologies, pushing insurance to the limits of what is possible digitally – and developing entirely new business models.
Customer-friendly might mean digitalising processes end-to-end. So we don't just want to have a mobile dashboard that lets customers see how far their claim processing has advanced. Our digital process starts as soon as there has been a crash with the damage caused by the accident. A mobile website lets customers upload photos of the damage, arrange a date for the vehicle to go into the workshop and arrange a courtesy car – a one-stop process.
Our digital insurance company ‘nexible’ is pushing insurance to the limits of what is technologically feasible. This is about making insurance completely portable on your smartphone. No more offline communication (instead chats with chatbot "Tom"), no paper, no policy in your filing folder. Technologically, we are doing what is currently possible. We are using voice, that is to say voice control on the phone, artificial intelligence and robotics.
Our investment in eco-systems is helping to build new business models that can have a disruptive effect on the traditional insurance model. In a mobility eco-system, customers don't buy a car first and then sort out the insurance; they buy the car and the insurance is part of the overall product. Or possibly they may no longer buy a specific car, but switch from a city runabout to a minibus and then occasionally to a convertible with their dealer, as their needs change. Or they might be multimodal mobile, using different modes of transport, switching back and forth, depending on their personal needs. Insurance needs to move flexibly with them.
Questioning all this is our everyday work. We are not building finished products where one part fits another. We are developing new solutions. It is obvious that the first prototype is often still a long way from the final solution.
Does a CDO make himself or herself superfluous if they have worked well? The clear answer is: YES! Transformation, of course, means moving from state A to state B. You have reached your destination once you have reached B.
Admittedly, digitalisation – or let's call it technologisation – is an ongoing process that is never really finished. Nonetheless, nothing feels as good as handing over digitalised processes to ERGO’s traditional departments or enabling them to do it themselves! Succeeding in everyone understanding, thinking about and driving forward digitalisation makes the role of CDO redundant as the motor of transformation.
That’s why I do not want to talk about you or we. Silo mentalities are banned; they are the death of digitalisation. The Not-invented-here syndrome also rankles with us. We are driving forward digitalisation together: our department sits right in the heart of the programming room. Imposing digitalisation on people is doomed to failure from the outset. Our fellow colleagues in the various departments need to immediately identify with the new ideas.
My job specification also includes patience, understanding, finding compromises. Friction points are pre-programmed when agile methods in the technology sector meet 170 years of successful insurance tradition. We are not establishing our digital applications on a green field, but are rather implementing them in a mature process landscape.
But that is also part of my work: teasing out what is possible without constructing unrealistic dream worlds. I am learning every day and can demonstrate time and time again that the best solutions are found when you put your heads together – and get down to the nitty-gritty.
In my view, how we work together is the most important element of transformation. I don't have to approve everything. Proofed by CDO does not feature in my vocabulary. “Proofed by responsibility” is a better description of what I do. The team working on a product has responsibility for it: ownership is important to me. The buck does not have to stop with me: my role is more about giving people the confidence (and responsibility) and the tools they need.
I regard my responsibility as being to motivate people, identify and reveal white spots, overcome obstacles, eliminate problems and identify alternative approaches. And so I'm something like a Minister of Culture. Digitalisation never fails because of the technology. It now makes almost everything possible, offering unimaginable possibilities. The reasons why it does not work are very often of a more cultural nature.
Is digitalisation sensible or merely expensive without creating real added value? I often hear that from my management colleagues. But, of course, we managers are only human beings and we also have to deal with the thought of handing over control to technology (something that can take a bit of getting used to).
Some employees, on the other hand, fear technology, some are simply worried about their jobs. Digitization however offers new, meaningful opportunities for creativity and expansion, creates more interesting fields and makes work even more humane. Our process automation robots, which now number more than 60, are an impressive proof. The robots take on boring typing work and employees have more time for customer contact.
Communication is crucial! For the last four years, I have been organising the Digital Morning every three weeks. Up to 500 employees regularly take part in the format. A 15-minute long lightning talk, 30 minutes of discussion. Sometimes we could do with a whole hour for discussion, as there are so many questions. I like these events very much. Because they show that our colleagues are getting to grips with the issue and are becoming interested in digitalisation.
There’s still a lot to do! But even although transformation can sometimes be exhausting, it’s a lot of fun shaping the future.
Text: Mark Klein