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Transforming Insurance Through Collaboration: Three ways to Enhance Partnership Success

By Peggy Klingel, Claims Innovation, Strategic Partnerships, Startups, Strategy Development, and Value Creation, Allstate

Peggy Klingel, Claims Innovation, Strategic Partnerships, Startups, Strategy Development, and Value Creation, Allstate

The insurance transformation underway reminds me of many reality TV survival shows where contestants size each other up as they face whatever challenge lies ahead. Whether it’s a startup navigating a meandering corporate sales process or a room filled with corporate executives staring uncomprehendingly at a startup’s product pitch, both are quietly wondering how the other survives at all in a rapidly changing industry.

The startup is convinced they have the perfect solution as they demo or describe technology to solve a problem that doesn’t exist or that the corporation doesn’t yet realize exists. The corporate team is trying to figure out how the new technology being showcased aligns with their strategic business goals and if they don’t see a fit, are worried they’re missing something important. Both are wondering why the other doesn’t understand what they’re saying as they ask and answer questions.

"Recent technology advances are transforming the industry, solving problems and streamlining processes that have existed for decades"

The meeting ends as the corporate contact says they will have another department review the solution with the unspoken understanding that the next meeting is over a month away. The startup hears the sales process is moving ahead, walks out, celebrates in the parking lot and follows up with meeting dates for the next week.

This classic perspective gap is experienced by sales teams across industries and is prevalent when startups and corporations collaborate because the cultures are so different. Knowing this, both can take steps to be better partners. In the reality shows, the winners are often the participants that join forces finding greater strength in numbers. Similarly, corporations and startups can successfully collaborate to offer industry-transforming solutions.

Open dialogue leading to an understanding of each other’s priorities and challenges sets the stage for relationships that overcome cultural differences. Corporations think in weeks and months as they focus on meeting quarterly and annual goals. Startup teams exist in hours and days as they juggle roles that span multiple business disciplines worrying they’re devoting their precious time to the wrong priority or partner. Should they decide to work together, the teams face the extra hurdle of pairing new technology with an infrastructure designed to support arcane insurance regulations and technology built decades before the startup even existed.

Some simple steps can help bridge the perspective gap.

1. Develop strong relationships by being clear about partnership process steps, timing and expectations. This is often easier said than done as the business contact is rarely well-versed in the corporation’s process for evaluating and contracting with partners. Startups should ask questions about the approvals needed with the understanding that if the steps aren’t clear they should expect delays. Just because it may take several months (or longer) to finalize an agreement that doesn’t mean it’s not a good idea, but it does mean the startup may want to focus on other opportunities while the corporate contact works through their internal approvals.

2. Minimize surprises by sharing current technology shortcomings and enhancement plans. It’s probably an understatement to say the insurance industry operates on a wide variety of new and legacy systems. Long term planning may be a challenge for startups that aren’t looking out as far as corporations but is necessary to help the partners align on strategy. Startups may find they benefit from suggestions that make the product even more marketable while corporations may learn new approaches for integrating their legacy technology with the new solution.

3. Agree on what success looks like. Jointly set and review partnership goals and metrics to monitor the health of the relationship. Both companies can benefit from metrics and documented successes to share with internal and external stakeholders. Regular communication on more than the inevitable operational problems helps the partners focus on their shared goals. When challenges arise, if they are aligned on their vision they are more likely to view them as temporary setbacks to be overcome.

Partnerships are not easy. Nor is leading in a corporate environment or building a new business. There is no end to articles with reasons and statistics on failure rates for all types of business relationships. Corporations are challenged to move at the speed of a startup while protecting their brand and data security. Startups loathe navigating corporate processes they don’t understand. Open communication sets a foundation of trust that allows teams to overcome the odds.

Our mutual customers have expectations that are driving us to change with startups providing a view into what is possible in this new world. Recent technology advances are transforming the industry, solving problems and streamlining processes that have existed for decades. Whether we are ready or not, startups and corporations are on this journey together. There is great opportunity ahead for those that learn to collaborate.

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