What a difference one quarter can make! Using a WorkOut project to quickly devise a strategy and put it into action, XL Insurance’s (XLI) newly launched North American Construction Unit hit the ground running, sparking innovation in 13 different areas of business and achieving impressive results in the company’s productivity and profitability. Read an interview with Gary Kaplan, head of the North American Construction Unit, to learn how XLI better defined its value proposition, improved how it targeted contractors for business, and made its development of products and services more efficient.
Q: Tell me how you used a WorkOut initiative to help launch XL Insurance’s North American Construction Unit.
A: XLI hired me to build its new construction business unit, and I was in a hurry to get it up and running. At the time I was the lone employee and I had a very short window – less than one quarter – to show some results. So I put out a call to arms to 10 XLI employees, who helped me frame what a Work Out would look like and what our goals would be. Ultimately we decided on two results-focused goals for the 50 people that attended: to increase the number of contractors who bought more than one XLI product or service by a factor of 10, and to write $36 million in the first year.
The focus of the WorkOut was to execute 13 separate initiatives which supported three main areas: more efficiently targeting customers and brokers; developing the right products, services and systems; and building our value proposition to define what would make our new business different and unique in the marketplace. We put a leader in charge of each initiative and tasked one project manager to help me follow up with the leaders on a weekly basis to make sure they were getting the right support and resources they needed to succeed.
Q: What were some of the innovations the teams came up with?
A: To support the three main focuses of the WorkOut, we came up with many innovations. For example, we figured out what forms we’d have to write and file, what changes we would need to make to internal IT systems, and how to create our claims platform to truly differentiate from the rest of the marketplace. We defined what risk engineering services we would offer and how we would communicate to the external marketplace. All of these innovations tracked directly back to our initial goals of increasing the number of customers and increasing our annual revenues.
Q: What results did you ultimately achieve through this WorkOut?
A: We were shooting to get five new contractors to buy more than one XLI product in the first quarter, but we ended up more than doubling that number and securing 13 new contractors as customers. We also wrote $10 million in the first quarter alone, which put us well on track to surpass our annual goal of $36 million.
Q: Why was this WorkOut process so successful?
A: I have been a part of 30 WorkOuts, including this one to launch a new business. In my experience, people almost always have the potential and the drive to be innovative, but they don’t always have the opportunity. This was certainly the case at XLI. Having rarely been pulled together as a group and challenged to achieve a certain result in a certain timeframe, there was an unbelievable pent up desire among employees and the leadership team to do something different and unique like this. With the WorkOut, we finally asked them to do it and empowered them to do it.
Q: What are the plans to sustain these results in 2012 and beyond?
A: We plan to continue adding permanent hires to become the sustaining force to drive the processes that we built during the Work Out to launch the business. So far, we have hired 25 people on top of the 50 who helped build the initial framework.
Q: What is your advice for executives in insurance and other sectors who might be contemplating using WorkOut to stimulate innovation and growth?
A: Putting the right group of people together and challenging them to meet a stretch objective motivates the team to get things done. If your goal is to get traction on any issue or initiative, WorkOut almost always works.