For this assignment, you are asked to read the story about Progressive Insurance (Megson & Hammer, 2004) as a foundation for your presentation. Your task is to act like a business reporter covering a story for a business news network. You are expected to provide a summary of the human resource, technology, and process improvement efforts explained by Megson and Hammer, and then, provide a grade of A-F on the company performance. You are expected to give a grade on each of the summary elements and then an overall grade of the company’s performance. Your news story and grading should be no more than 5 minutes. You are expected to submit a transcript of your video. Feel free to be creative with your video as this is your news story to tell. Please keep in mind that while you are not expected to note your sources in your video presentation, you are expected to cite them in your transcript. You should reference at least 4 resources for this assignment using sources from the Library.
TYPE TRANSCRIPT THAT CAN BE USED IN A VIDEO PRESENTATION
Wk6-7112-Rate Methods Of HR & Technology Practices For Developing Sustainable Innovation
In their article, “Deep change: How operational innovation can transform your company,” Hammer explores the concept of operational innovation and analyzes some of the companies that have been successful in adopting this strategy. The author distinguishes operational innovation from operational improvements, arguing that, unlike the latter, operational innovation entails adopting new ways of conducting day-to-day activities such as filling orders, providing customer service, and developing products (Hammer, 2004). While Hammer diversifies his exploration to other companies such as Dell and Taco Bells, his article mainly focuses on human resource, technology, and process improvement efforts in Progressive Insurance and how the operational innovation contributes to the company’s success.
Hammer describes Progressive Insurance’s success as grounded on the adoption of new technological improvements that assist with risk profiling and insurance pricing. This mechanism is based on the theory that a person’s psychobehavior correlates with their credit score and automobile insurance (Brockett & Golden, 2007). In this case, Progressive insurance assesses applicants’ risk profile based on their credit rating, whereby people with good credit ratings are believed to have responsible driving behavior, leading to a low-price quote. The author mentions that to ensure accurate pricing based on the applicant’s risk profile, Progressive Insurance’s computer systems contact automatically with those in credit agency, allowing the firm to factor credit score in the pricing calculation (Hammer, 2004). In essence, these technological improvements facilitate better pricing and enable the company to increase its underwriting profits.
The author also explains the human resource improvements in Progressive insurance and their impact on its profitability and success. Hammer notes that these improvements mainly stem from the Immediate response claims handling introduced by the company and the subsequent changes made to the initiative other the years. Typically, assessing automobile damages may take a couple of days and up to one to three days of filing the claim (Delbridge, 2021). However, Hammer avers that the firm’s immediate response claims handling process enhanced the human resource efficiency by enabling claimants to contact the company’s representative and have the latter schedule an adjuster to inspect a vehicle and write a cheque within nine hours. The author also observes that further improvements have been made to this operational innovation over the years, enabling the company’s representative to assign the inspection tasks to adjusters based on their skills and abilities. These improvements enhance the company’s human resources by increasing their efficiency in responding to claims and matching the right personnel to the right task.
The article also highlights some of the process improvements made in Progressive Insurance. Notably, the entity established a website and an 800 number where potential customers can access Progressive’s rate and those of three competitors (Hammer, 2004). As the literature suggests, such price comparison sites profoundly affect the UK general insurance market’s profitability dynamics (Robertshaw, 2011). Therefore, with such improvements in the business process, Progressive Insurance offers convenience to drivers seeking ideal insurance rates, which, in turn, attracts more clients to the firm’s services.
In essence, all the operational innovations in Progressive Insurance contribute to its success and better performance relative to its competitors. However, I would rate some of these innovations lower than others because of the degree of their disruption. On the one hand, I would rate the company’s process improvements B because it is relatively disruptive and imitable. On the other hand, I would rate the firm’s technology and human resource A because it is highly disruptive and would cost other firms that wish to adopt such improvements in their operations. However, overall, I would rank the firm’s performance A because it has progressively adopted operational innovation in activities that impact its strategic goals and sales over the years.
References
Brockett, P. L., & Golden, L. L. (2007). Biological and psychobehavioral correlates of credit scores and automobile insurance losses: Toward an explication of why credit scoring works. The Journal of Risk and Insurance, 74(1), 23–63. https://www.jstor.org/stable/4138424?seq=1
Delbridge, E. (2021, April 19). How long does an insurance claim take? The Balance. https://www.thebalance.com/how-long-does-an-insurance-claim-take-527095
Hammer, M. (2004, May 12). Deep change: How operational innovation can transform your company. Harvard Business Review. https://hbr.org/2004/04/deep-change-how-operational-innovation-can-transform-your-company
Robertshaw, G. (2011). An examination of the profitability of customers acquired through price comparison sites: Implications for the UK insurance industry. Journal of Direct, Data and Digital Marketing Practice, 12(3), 216–229. https://doi.org/10.1057/dddmp.2010.37
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