CIO for Enterprise Applications at Nationwide Insurance Michael Carrel covers rolling out agile enterprise-wide at scale, becoming comfortable with failure, and the ins and outs of building a culture of visual management, accountability, and innovation at this financial services giant.
Bob Payne: [00:00:21] I’m here with Michael Carrel from Nationwide. So Michael we’ve worked together years ago. What are you what are you doing now at Nationwide?
Michael Carrel: [00:00:31] Thanks. Yeah I’m the CIO for enterprise applications at Nationwide. So what I have a responsibility for is all plan build and run for technology solutions supporting our staff functions within Nationwide’s marketing, legal, human resources, investments, finance and actually I.T. itself.
Bob Payne: [00:00:48] Wow, so that’s that’s great. So that that is has expanded since we had worked together.
Michael Carrel: [00:00:53] Lots of stuff.
Bob Payne: [00:00:55] Yeah absolutely. So what trends are you seeing in the Insurance sector right now. What are the drivers that that are driving innovation, driving your use of agile, driving the business, you know.
Michael Carrel: [00:01:11] Yeah. So a couple of things on the short term basis a lot of the trends that we’re dealing with aren’t different at Nationwide compared to other insurers, specifically you know on our property and casualty side we have lost trends and a rise in the industry due to distracted driving. We have, you know, there’s lot of technology in cars these days and so when cars are in accidents our last costs go up as those accidents you know cost more to repair vehicles within our financial services industry. We have a lot of the Department of Labor is creating lots of changes within the financial services industry, especially the products that we sell: new life products. We have annuities and retirement plans.
Michael Carrell: [00:01:53] So the deal well into the regulatory environment is changing a lot. And in some cases you can look at that as an obstacle or as an opportunity. And so related to innovation there’s certainly an opportunity there, as with the other things that I mentioned in terms of ways to help prevent distracted driving in particular, technology that we could use to help make our make it safe for our customers. Longer term trends are there as well. Especially in terms of in the in the auto insurance industry with autonomous vehicles, there’s a lot there will be a lot of change in revenue within our industry over time as you look at driverless cars are driving increased you know, lower claims frequency which is going to drive down revenue within the industry. So, where are we going to look at revenue sources of the future? You know so innovation plays a huge role in not only how do we create competitive advantage out of the short term challenges we have but longer term than Nationwide how do we continue to fulfill additional revenue sources for Nationwide given the you know the contraction of some of our expectations that industry especially the auto industry going forward.
Bob Payne: [00:03:03] Yes so certainly those are a lot of the some challenges but also opportunities that are presenting themselves. How do you strike that balance between you know this trend is really challenging our bottom line or this presents a new opportunity because there’s only so much time you have to sell new products.
Michael Carrel: [00:03:28] That’s a great question. And you know what we focus on are really our customer journeys and where we want to differentiate ourselves.
[00:03:34] And that really helps us focus on the innovations that are that are important to Nationwide and specifically in areas such as such as strategic partnerships and ventures. Those are types of things that we’re looking at to realize that innovation that we have with the Nationwide doesn’t have to only just come from you with them. How can we partner with others inside and outside of Nationwide to be able to drive innovation learn from others with strategic partnerships and ventures opportunities. A lot of companies are. Nationwide is also one of them. In fact recently announced 100 billion dollar or 100 million dollar investment in that area. So we’re taking it very seriously and to make sure that we deliver a great experience for our customers. And so we prioritize our investments based upon customer experiences that we want to differentiate ourselves within Nationwide and what we can bring to bear for our customers you go through that you know a lot of it too is that the technology capabilities that we have internally and growing from what we have today and then adding and the new capabilities that we’re developing to make sure that we can deliver on those those experiences. And we’re looking at it heavily all customer research and focus right. Because a lot of times the customer speaks in terms of the value of innovation. So there’s a lot of great ideas and so you have to understand though which of those resonate most with our customers. Which of those are kind of on point with our brand and our value proposition to our customers. So making sure that we know what our customers value for for the cost is something that we’re always continually looking at.
Bob Payne: [00:05:13] Yeah I mean what are the challenges with an organization that is as diverse as yours. How do you get those different lines of business to understand that the customer only knows one Nationwide sort of the apple model right.
Michael Carrel: [00:05:27] Yeah.
Bob Payne: [00:05:28] It’s not just one you know not just this product that they’re potentially buying. There are a lot of things
Michael Carrel: [00:05:35] Especially in our industry you’re buying experience so it’s not just you know we’re not creating microwaves we’re not creating cars right now we’re creating promises to help our customers get back on their feet in difficult times.
Bob Payne: [00:05:46] Yeah and customer service is an important factor. How does how do lean and agile methods play into delivery of those customer experiences for you guys?
Michael Carrel: [00:05:57] Great question. You know a lot of times it’s really important that you deliver value to our customers quickly and so agile for us is is key for us. You know DevOps has a lot of a lot of consomme practices around agile that we’re adopting but it really is moving with speed and agility in our development lifecycle. But also in our planning as well you know there is a test to learn concepts that we work with a Nationwide to make sure that we explore what that concept could look like, test it with customers we have great user experience team that helps us with research with our customers. We test those concepts in a very iterative fashion and then actually have an agile at scale across nation with combined with dev ops to make sure that we can deliver those capabilities quickly to our customers.
[00:06:47] So it’s certainly agile it even an issue I started more as more of an I.T. effort that focused on developing software in a better way. And we have rolled out agile enterprise wide at scale putting that earlier in the pipeline of delivery of capability and working with business partners is an area that we’re still growing into a habit a lot in our direct to consumer experiences specially in our and the web in mobile space and then growing that beyond that is a priority for us and things like DevOps and deploying those things out across Nationwide are helping delivery teams at the same time agile planning practices is something that we’re we’re adopting to be able to kind of do more tests and experimentation and drive value to the consumer more quickly.
Bob Payne: [00:07:37] Yeah I think it’s sort of interesting that agile sort of picks up quite often when you know what you’re going to build how you used innovation experimentation to sort of drive that funnel to get because ideation is sort of a divergent process right what are all the possible possible things agile works well as a convergent how do we deliver this thing that we’ve decided to deliver so How are you using experimentation innovation to feed into that delivery funnel?
Michael Carrel: [00:08:12] A great example is this a test and learn concept that we house that we have a team set up that are focused on taking our high value ideas that are based on customer research and data that we’ve collected on what consumers want and where they may have problems today and then where we defined those customer journeys in points of differentiation as I mentioned earlier with that then a test and learn concept to be able to quickly learn to experiment around ways on delivering on that value proposition for that user experience because it can be delivered in various ways. And so we’re just learning through that test and learn concept and then quickly getting that into a build team to get that deployed. Is our model so it’s that concept of experimentation with applications even of funding and time and resources around test and learn kind of separate from defined build projects to give you the freedom to not treat to learn experiment without being the confinements of a project with some pre-determined kind of outcome and set of requirements. Because you know the user experiences, customer experiences you learn as you go and you experiment and you test..
Bob Payne: [00:09:21] And fundamentally change the direction you’re taking.
Michael Carrel: [00:09:24] Absolutely yeah.
Bob Payne: [00:09:25] Yeah. Yeah. Has it been challenging to sort of inject that level of experimentation in certain areas looking for more of a plan going in than..
Michael Carrel: [00:09:38] I think teams that are typically have we’ve moved agile wide scale the build processes
Bob Payne: [00:09:46] And have a very mature process
Michael Carrel: [00:09:49] Yeah, And I think the biggest thing is being willing to fail and have ideas fail I think with anything that you’re driving innovation you have to be comfortable with with failure and ideas not working and iterating perfecting an idea and so you do sometimes have to get past perspectives around wanting to get it right the first time and get everything perfect before you take a step forward versus intuitively kind of figuring out the kind of what’s the best way to deliver on the value that you’re looking to create whether that be a product you in the eyes of a consumer or a service experience and really exploring versus using more of a waterfall mindset around requirements and design like getting the perfect design and then implementing it. So getting people comfortable with that learning and and quite frankly some of it. It’s how we what we’ve done to ourselves in terms of how we fund projects so really when you take some of those constraints away and then you eyes open your eyes wide open then and people can see the fact that hey constraints that perhaps drove us towards a certain mindset are now released and it gives you the freedom to work in IT or a fashion to make sure that you can really harness the value with the right the capability to kind of deliver the value that you’re looking to deliver.
Bob Payne: [00:11:04] Yeah I think sometimes you have to sort of flip the mindset because insurance is essentially risk management. But the thing that I think a lot of people think when they think about experimentation is it’s risky but I actually like to flip that around and say your biggest risk is that you’re going all in on a single bet like real risk management is about.
Michael Carrel: [00:11:32] Yeah
Bob Payne: [00:11:33] Iterating ideating validating those ideas with your with your customers is right and you know the people that need to deliver those services.
Michael Carrel: [00:11:43] And at Nationwide are right we talk about being “on your side” and “on your side” as a is a commitment that we made to our customers and it’s a lot. And it comes with expectations. So for us you know that you know while you were in the business of managing risk there. There also is a large accountability we have for delivering an on your site experience to our customers.
Michael Carrel: [00:12:05] That is important to us and that gives you get you know to be a little bit more creative with how do you kind of drive that and learn about what does it mean for a customer to be on your side. And when there are a vast amount of products and services and channels where we provide service it is hard and it’s difficult requires experimentation. But I think our commitment to our customers is often gives us enough of that energy to kind of overcome the inertia sometimes of the risk element that is kind of the nature of what we do at Nationwide.
Bob Payne: [00:12:42] Yeah. Yeah so that’s great because you know you’ve had a lot of lean agile methods throughout the whole organization. Now it’s starting to move into ideation and I know you’re also working a lot of dev ops initiatives too. Once you have that idea you can build it iterate on it quickly then how do you how do you get things out to out to those consumers to really close the loop because the million dollar idea is not it has no value if it doesn’t actually start to solve customers problems or deliver on that value proposition. How are you guys using DevOps at Nationwide has that been a big initiative.
Michael Carrel: [00:13:28] Yeah it’s a huge initiative for us. We’re starting a very carefully to make sure that we are getting the model right before we have larger scale adoption. Know we have elements of dev ops across all of Nationwide but what we might consider more of like a gold standard of dev ops kind of fully embracing it. You know it’s mindset. It’s also automation.
Michael Carrel: [00:13:55] It’s even some tooling that we put in place so we have some some model teams that have demonstrated kind of our recommended kind of full integration into dev ops that we have. We’ve worked through and now we’re working on ruling that out across all our teams and many of them are which will have elements of dev ops both the full package which most importantly is the mindset right. It’s not it’s not just about the tooling. We have lots of tools lots of automation even amongst those tools to make it to make it easier to be able to you know to manage code migrate code build drive builds and do all that through automation. But it really is a mindset a mindset of teams to continue to even evolve our dev ops and perfect it you know with new learnings that come out of foods team so we’re right now in the process of rolling that out more broadly across Nationwide through some model teams that have kind of perfected our model.
Bob Payne: [00:14:56] Yeah. And then ultimately how do you the loop with measuring customer behavior those ideas that you had that you narrowed down you built them. Now automated you push the deploy out. But getting that full loop measurement to really really achieve business agility and to your goal of DevOps.
Michael Carrel: [00:15:18] Yeah. And to your point we actually have a lean vision management system that’s in place across all of I.T. and Nationwide starting out with local teams all the way up to the A level so I have my visual management system and so tracking key metrics of value there. So how long is it take from a requirement to get to production.
Michael Carrel: [00:15:38] You know how long you know how much of a backlog there are key metrics around velocity and speed that is in our visual management systems that we are you know we track and we are expecting certain lift from as we continue to get even more mature and dev ops as we roll out kind of our model structure across all of our lines and Nationwide development lines. So that’s that’s something we’re very keen on is measuring the Emperor fighting. So where we have it’s a learning opportunity to use metrics as you see pockets of matter X that in certain areas where … in favor ability perhaps even over a norm let’s learn from that we are what are they doing so we can continue to kind of learn from each other across the organization. But metrics on speed and agility are working in own management system. So we’re also being held accountable for the value that we’re looking to create. And quite frankly understanding where we’re not meeting those velocity targets those speed targets of a driving value directly out you know getting into production as quickly as we can through through new lean practices and DevOps.
Bob Payne: [00:16:46] Yeah and you know I’m particularly passionate about visual systems so I’m always very very encouraged when I when I came out to visit to see the implementation you guys have. The thing that I think is most interesting and probably most important about the visual management systems that are some examples that I’ve seen is you have them at all layers.
Bob Payne: [00:17:12] And there are linkages and if something is measured the people that are supposed to change their behavior or maybe not change their behavior but whose work is being driven by those metrics are responsible for the metrics and that that is an area where I think lean organizations and I consider you as one I think are much better than most organizations. Just look at agile as just a delivery model or visual management. That’s just for the team. You really have created an umbrella that spans the whole organization.
Michael Carrel: [00:17:57] It’s really a mindset that has from all the way from the top down into our local teams and my own visual measurement system as a CIO is visible so people can come in and see my accountability section on my board. Our planning initiatives are our key project to build build metrics and that all of our metrics that through sequenced review cross all the dimensions of our key performance indicators are all in plain sight. People can associates can see those and see what we’re talking about as a CEO candidate. So it’s not. There’s also that transparency their risk associates it’s not just what they’re they’re not just working with the leaders or management system but my team is as well conducting other stand ups. Yeah how often do you do your standup. So we do our standups weekly with within our team and then we do an extra section even once a month on some deep diving into metrics that whose update frequency or more monthly versus versus weekly type checks that we do but we go through quick run checks our build projects our planning initiatives every week and then our accountability sections always looking at Voice of Customer problems sections. You know there are problems that we need to be doing a 3s on across our organization.
Michael Carrel: [00:19:13] And then also kind of keeping track of our releases coming up and the capability maturity within our teams as well.
Bob Payne: [00:19:20] Great. Yeah that’s exciting. I know that you quite often do. You’re doing a more formal A3 Lean continuous improvement process. Has that really are you getting a lot of things bubbling up from teams in the way that say a Toyota would have a continuous improvement bubbling up from the folks doing the work or is it that innovation.
Michael Carrel: [00:19:51] Theories are happening at all levels. No we don’t. I wouldn’t say I have a lot of escalated to me where they are blockers. You know we try to empower local seems to be able to drive improvement in their areas but items do that are more you know a systemic type things they do get bubbled up actually through the official management system so through blockers that we have and I actually do Gemba walks of the lean management systems of my direct reports and they do it levels down as well and and sometimes actually to be quite frank I will have a team that will want me to attend one of their gambles to be able to learn about a block or something where they might need my help as a CIO even if it’s one of our delivery lines. I’ve done that on occasion. One of them team going through some agile transformation and really wanted me to kind of see some something that they were working on to be able to help drive that forward. So also a ton of gemba of a line to be able to also have firsthand experience with what they’re dealing with perhaps an innovation that they need some support for.
Michael Carrel: [00:20:57] Or it could be a process change or a blocker that they need my help with.
Bob Payne: [00:21:02] And that establishes a lot of trust throughout the organization to really have that level of transparency. What’s what do you see coming down the road that’s exciting for you for the next five years? I know that’s an awfully long ways to look out.
Michael Carrel: [00:21:17] I think with a lot of organizations you know we’re focusing on legacy platform modernization so you know Nationwide we’ll be celebrating 100 years as a as a company coming up here soon and so we are we have several transformation initiatives going on to really modernize some of our core platforms across our business so there are nimble going into into the future. And so that’s a key focus for us. Clearly data analytics expressed in our business. We have done a lot of work there continue to do more extending that into even greater cognitive solutions with AI. So we’re definite have a definite focus there is so much opportunity in that space and building that into the fabric of our solutions our mindsets is going to be important as we move forward as well as well as us continue to digitize organization. Their key priority for us. And then you with with all the innovation that we talked about before you know I think I’m excited about you know the businesses that Nationwide will will be in even 10 years from now.
[00:22:25] You know we’ve been a company who’s innovated especially in areas of financial services kind of being a traditional PNC Insure and innovation that got us kind of really defining you know the annuity market a leader you know a company wide or country wide leaders and Pat and in 457 retirement plans we have a company who is a fabric of innovation has spurred new products new businesses for Nationwide. I’m very excited about new products and new businesses that we’re not in today that we will be in you know 10 years from now as we continue to kind of focus on our core purpose of protecting what matters most to to our consumers and also helping people prepare for and live in retirement so excited about what that future is going to hold and things like our enterprise hackathons, local hackathons we do within our organization and then Chief Innovation Officer within Nationwide and all the partnerships that will kind of continue to grow to kind of continue to fuel the innovative spirit at Nationwide is exciting. I’m happy to be a part of it and I think you know I think we’re really kind of getting the business in general and are going through this huge cycle I think many businesses are or the next 10 years of being another kind of transfer kind of transformation in terms of the technologies today AI cognitive type solutions and businesses I think are going. All this is going very different Ten years from now I think we’re going through this next kind of revolution of with that technology is enabling. So I’m excited to figure out new ways of leveraging your technology new processes concepts to be able to drive that value for our customers.
Bob Payne: [00:24:02] Excellent I hope I’m as vital at 100 as Nationwide is. And I thank you so much for doing the talk.
Michael Carrell: [00:24:08] Thank you.