'Organisational Inertia Is A Powerful Force'

Interview with Parul Kaul-Green, Head of Innovation and M&A, AXA UK & Ireland Group


Ahead of our Chief Innovation Officer summit in London, April 25 & 26, we sat down with Parul Kaul-Green to talk about how organisations can most effectively encourage innovation. 

Parul is Group Head of Innovation and M&A at AXA UK & Ireland Group. She is responsible for Inorganic and Innovation strategy across Group’s General Insurance, Health, and Asset Management businesses.

Economist and Investor by training, she has held senior strategist, M&A and investor roles at AXA, Aviva, Family office VC and Citibank

She is a mentor at The Duke of York Pitch@Palace and Mayor of London’s International Business Partnering and Business Growth Programme. She is on the judge Panel for FinTech 50 Europe, Disrupt 100 and Insurance Times- Technology Excellence Award.

Parul is also a member of Women in Investing and Careers Advisory group of CFA Institute.

How do you encourage a culture of innovation at AXA? Do you have any tips on creating a workplace that encourages innovation?

In my opinion, any organisation has shared sets of beliefs and values which form its culture. It is that culture that can either nurture or stifle innovation. Although many say that there is no structural determinism to an innovative company i.e. Big co can be as innovative as Small co; there are characteristics such as layers of hierarchy, governance, risk aversion and fear of failure which stifle innovation.

At AXA, we have this self-awareness that we are big therefore by nature slow-moving and bureaucratic, but in order to survive, we have to build micro-cultures which are supportive of innovation and experimentation. We have our innovation labs, CVC investment, start-up studios where we fund, partner or build disruptive and enabling innovation. These are our satellites exploring the world of new technology and Innovation.

Beyond that, within the core business, we are developing lighter governance models to support innovation in our core processes and adjacencies. Our brand strapline is Restless for a reason and one of our new core values is courage. These are small steps with which we are planting risk-taking mindset and we are beginning to see green shoots, especially in our newer and millennial employees who feel energised and motivated by the challenge!

Do you think established organisations should be aiming for a startup mentality in order to embrace innovation?

In my opinion, it is horses for courses!

Large organisations such as IBM, Google, Microsoft have funded innovation through their research labs. In financial services, employees in large banks have created innovative hedge fund strategies and trading instruments. Blythe Masters created CDS while at JPM and my alma mater Citibank created Negotiable Certificates of Deposit.

They have developed them by attracting industry-leading talent and nurturing them by providing them with funding and infrastructure to innovate.

In a similar vein, I remember reading CBInsights founder Anand Sanwal’s interview where he shared his story of building and growing his start-up. As his company grew, he had to put in policies, procedures and all the other “governance” tools so that his employees had clarity on guiding principles and core philosophies.

I would suggest that for innovation to succeed it is crucial to bring in curious, open-minded, diverse, collaborative and courageous people together and give them infrastructure and opportunity to experiment and scale.

What are the biggest traps organisations fall into when it comes to implementing an innovation program and how can they be avoided?

There are few things that come to mind;

One of the biggest traps is treating innovation as a programme rather than a continuous activity of experimentation, validation, iteration, and industrialisation. The problem with a programme-based approach is that it is seen as a fad by other 'traditional' functions and subject to cuts post efficiency reviews. This also creates negative emotions in the employee base with resentment against the “cool kids” in innovation.

Another aligned matter is fair and transparent attribution of benefits to the activity of innovation.

Once a certain experiment has been deemed successful and industrialised, the benefits are likely to be attributed to core business line, with a cursory pat on the back to R&D.

Finally, there is an age-old problem of innovation being seen as threat to existing business and therefore instead of supporting commercialisation of innovation, existing business (current money makers) try to kill it with scepticism, process, and apathy- The Kodak story

The best way to counter any or all of the traps to have treat innovation as a core function with a strategic vision, design, and infrastructure.

Most importantly have a cohesive glide path to commercialisation/ implementation strategy.

What do you think will be the next disruptor in the insurance industry?

The insurance industry plays critical role in assessing, transferring and managing insurable risk to human life, health, and property.

However, coverage afforded by insurance is not uniformly distributed and there are many who are left uninsured or underinsured (protection gap) due to lack of affordability awareness and insurability. The UK alone has an estimated protection gap of a staggering £2.4 trillion!

The technology today is seriously undermining many of the barriers to entry of this capital-hungry complex industry. Digitalisation and availability of low-cost cloud-based micro-service infrastructure has significantly reduced the initial set up costs and operating expenses of an Insurance company. Cost efficiency offered by the digital infrastructure and API led distribution is attacking the unit cost advantage of larger players in the industry.

Some of the other key developments impacting insurance industry are;

Internet of Things - generating large amounts of real-time data that result in more accurate risk assessment of each insured policyholder

Artificial Intelligence- translating real-time data (structured or unstructured) into analytics through Inference, pattern recognition, and logical AI

Distributed Ledgers and Disintermediation (P2P, marketplace) - displacing the trusted third party/intermediary required for risk pooling and sharing

How do you prepare for disruption?

My firm conviction is that few things are necessary to prepare for disruption;

Understand changing customer behaviours and preferences and adapt your business model. This can be accretive to current business model or changing the paradigm entirely!

Understand how the technologies are shaping or disrupting each of the elements of your value chain be it your downstream-supply chain or upstream – customer targeting and acquisition models

Finally, always question your companies purpose/economic rationale and see if it remains valid or needs to be retooled or repurposed

I guess what I am trying to say is that organisational inertia is a powerful force. In order to break-away the effort has to be conscious and forceful!

How is the nature of innovation and organisations' approaches to it set to evolve over the next five years?

In my opinion, there is likely to be greater emphasis on collaboration and open innovation across industries.

The scope, scale, and velocity of the 4th industrial revolution will emphasize meta-analysis and cross-disciplinary approach to solving business problems.

Hear more from Parul during her presentation at our Chief Innovation Officer summit in London, April 25 & 26,

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