This article by Tom Kussurelis, SVP and chief operating officer of Arrowhead Programs, was published June 14, 2024 in Carrier Management.
As companies grow, many adopt a shared services operating model. As the name implies, this approach consolidates products and common functions at headquarters — often finance, IT, human resources, facilities, procurement, legal services and more. These centralized service units then support field offices, local market initiatives and individual brands that may exist under the corporate umbrella.
The typical motivation for this operating model is cost savings, gained efficiencies and standardization of procedures — all things that are good for any business. However, once a shared services model is adopted, it’s crucial to build formal procedures that allow for and support creative solutions and transformational ideas.
Hundreds of businesses have joined Brown & Brown’s team, including in my own division, Arrowhead Programs. These acquisitions have generated an incredible network of products, talent and knowledge. As new assets are added to our portfolio, we’ve improved how we consolidate products and services without losing any of the new advantages and valued perspectives that we’ve gained.
To accomplish this, we’ve evolved from what might be a more traditional shared services model to what we call a “growth and innovation model.” While the efficiencies of corporate support remain, as does our focus on acquiring companies that fit culturally and make sense financially, this elevated model has helped us feed and maintain an entrepreneurial culture.
The growth and innovation model
Our shift from what might be called the “old” shared services model was based on the belief that gained efficiencies can sometimes hinder growth and innovation if “shared” becomes “dictated.”
So how can you keep the positives of shared organizational services without killing new initiatives and professional drive?
1. Build innovation into the culture
If innovation is left to chance, it becomes a fluke instead of an expected part of operations. And without innovation, growth can stall.
At Arrowhead Programs, we’ve chosen to formalize how we tackle projects to make growth a team sport. We’ve done this by ending isolation and pulling leaders from all disciplines across the organization into the same room on a regular schedule to discuss, prioritize, plan and execute projects. We call it our Growth and Innovation Team, and it includes a cross section of more than a dozen different leaders from various units typically needed for a successful project launch, such as programs and commercial insurance to marketing, IT and finance. By shifting to a formal group like this, along with the subgroups that may develop by project, we’ve established a continual feedback loop that feeds our project pipeline.
As a group, we evaluate the potential impact of each project on margins and revenue without overlooking hidden costs that can be missed if every department doesn’t have a seat at the table. We discuss project dependencies, timelines, expected deliverables and areas of responsibility, without getting into or dictating the specific daily tasks of each leader’s group. We’re able to poll individuals on past experiences with similar projects, which prevents us from repeating mistakes or starting from scratch. Importantly, this format also lays the foundation for professional growth and career opportunities. No one is left on an island, and sharing different perspectives and experiences improves everyone’s operations.
2. Keep the project pipeline full
Your pipeline should include multiple projects at various stages:
- Information and ideation. Nothing should be off the table at this point.
- Understanding. This is when a formal group, like our own Growth and Innovation Team, collects the data and information needed to evaluate a project, always including consideration of corporate goals and objectives. Different department perspectives become especially valuable during this phase.
- Decision. Should the proposed project proceed, go through further revision or be dropped altogether? Although corporate America has developed a penchant for only celebrating “yes” decisions, it’s also important to celebrate a well-reasoned “no.” Saving the company from a failure is deserving of equivalent praise, and it conditions your team to value information over guesswork.
- Action. I like to quote John Doerr, general partner at Kleiner Perkins Caufield & Byers, who said, “Ideas are easy. Execution is everything. It takes a team to win.”
Now is not the time to disband the team that evaluated and approved your project. Keep your formal cross-department group engaged. Issues will arise during launch and beyond. New off-shoot opportunities may develop. Regular review of every project will make it easier to adjust, pivot and feed new ideas back into the pipeline.
3. Nurture collaboration
Perhaps most important for any formal innovation process is everyone’s involvement at every stage. You can’t afford to limit participation by shuffling different departments in and out to offer opinions only when their expected areas of responsibility fit into a standard project timeline.
This collaborative approach can pay huge dividends.
As an example, when our Growth and Innovation Team recently discussed a particular underwriting process, we found that underwriters were often spending at least 45 minutes reviewing a file only to find just one factor that made the entire risk unacceptable. Because leaders in IT and data science were in that meeting, they were able to suggest an automated screening tool that can identify individual points of ineligibility before any time is spent on underwriting. Because this happens without human touch, it saves both time and frustration.
Now, once a submission passes this automated review, it’s then forwarded to the underwriter with a “grade” to help the team prioritize submissions. This data science solution saves an amount of time equivalent to one full-time experienced underwriter — which is a significant gift in productivity for our underwriting team.
4. Don’t over-engineer new products and services
While your goal may be innovation, don’t let formal processes drive change for the sake of change. You don’t want a culture that simply rewards idea generation. You want a culture that rewards well-researched and well-executed solutions.
- Don’t replace what’s not broken. If an existing product or process works, continue to assess results and simply look for opportunities to make it better.
- Implement projects on a cafeteria basis. Every new product or process may not work across your entire organization, and that’s okay. While you may not be able to allow a lot of leeway in some functions, there can be variability in others.
For us, one nonnegotiable is IT security. Requirements apply across the organization with every unit following the same security protocols. Likewise, every business must meet the same financial reporting and audit requirements.
However, discretion is allowed when it comes to things like vendor agreements, project management and negotiations. In this way, no business unit is handcuffed or expected to use any new initiatives that don’t meet their needs.
- Keep looking for ways to make everyone’s life better. That should include individuals on your own team, the collective departments and organizations that make up your company — and not to be forgotten — your clients and business partners, i.e. carriers.
The Merriam-Webster dictionary defines “innovation” as “1. a new idea, method, or device; novelty. 2. the introduction of something new.”
What’s missing from that definition is the ultimate payoff of innovation, which should be to make everyone’s life better, while producing revenue and profit for the enterprise.
Growth is an obvious way to make everyone’s life better; people succeed when their organization succeeds. But if any proposed innovation impedes profit, complicates business partnerships, increases burdens on one department or doesn’t align with the company’s corporate mission, it needs to be sent back for more work or dismissed altogether.
If you’re already using a shared services model or you simply assign tasks by department, consider evolving your approach to encourage more collaboration. Innovation never occurs in a vacuum, so look for ways to break out of existing silos. Include more people in the discussion and you may find a solution for your next problem from a completely unexpected source.
And once that kind of teamwork takes hold in your culture, growth and other good things will follow.