Wednesday, April 29, 2009

Ineffective Efficiency

A great example of just how different efficiency and effectiveness really are. In business (and in life in general) it's very easy to fall into the efficiency trap while missing the bigger picture. If you're looking for a bump in effectiveness, look here.

This is also a rare example of an insurance company finding a way to align itself with its customers in a win-win all around.

(this particular situation also happens to be a good example of the nuances that can be picked up in one-on-one conversation that cannot be picked up in a form or even, at times, a a letter or an e-mail. Good food for thought when you're looking to overcome a disagreement, build trust, or tackle a perplexing situation).

When Leslie McMillan was hired as a director at Quebec-based Industrial Alliance in January 2004, the company processed disability claims rationally and efficiently. People seeking disability pay would submit their claims to the company, analysts would read them to make sure they were properly filed and then pass them along to independent medical experts to determine if the requests were valid. With the medical analysis complete, the company would then approve or deny the claim. It was a process designed to avoid errors and maximize efficiency. It took about eight weeks from start to finish. And it worked.

In spite of the success of the existing system, McMillan decided to change things. Based on her experience at another firm, she believed that Industrial Alliance could become better by inserting a little empathy into the system. She instructed the ten claims analysts in her division to call the people seeking disability benefits and interview them for a half-hour to learn more about them.

Within a year, the results were astounding. Across the disability division, the institution of policies that put people, not paper, at the center of claims analysis transformed the division. McMillan reports that spending on independent medical evaluations dropped by 80%. The typical time required to settle a claim fell from eight weeks to four. As analysts developed better interviewing and decision-making skills, the company was able to boost revenue by marketing higher-value disability management products instead of just offering claims evaluations. Employee satisfaction shot up as their powers increased. And lawsuits, a major expense for any insurer, dropped off precipitously as well. She estimated that whereas 12% of all claims had previously ended up in litigation, that figure had dropped to just 7%.

These are major improvements. How did this happen?

Read the rest of the story here:

Tuesday, April 28, 2009

How To Get Dumber While Learning

Alan Weiss, a very successful consultant, has said this many times:

"If you improve by 1% a day, in 70 days you’re twice as good."
Today I ran across a follow-on insight he had late last year that he appended to the end of the prior statement:
"But if you don’t learn carefully and instead become confused, the opposite can actually occur. People can get dumber."

I gotta say, that I know that to be true because I experience it again & again... with myself. I am so addicted to acquiring new knowledge that I constantly read books, newsletters, web sites, blogs, etc. When I'm doing it connected to a particular topic or concern (as opposed to more serendipitous research) I often find myself learning WITHOUT doing. Eventually I have to convince myself to bite the bullet, take what I've acquired thus far, and take action on it.

It's tough deciding, especially when you don't have a concrete deadline, to stop researching and pondering... and to simply take action. But, until you do, it's all theory and, well, generally not very useful.


Wednesday, April 1, 2009

Celebrity Cash Crunch - Or Your Own?

Brian Cuban, who happens to be the brother of Mark Cuban (the owner of the Dallas Mavericks but which is irrelevant to the topic...mostly), has a good thought piece in Worth magazine entitled Celebrity Cash Crunch - We may secretly enjoy it when celebrities go belly-up—but would we do any different in their shoes?

Indeed... Heck -- with far less money to throw away -- most folks make the exact same financial mistakes. I suggest you read it here.