Innovation in the Nigerian Insurance Industry

In business, innovation can come from a variety of different sources. Sometimes it is the result of specifically focusing on creating new ideas, whereas other times it can be unexpected and the result of a spontaneous reaction to a particular need.

The main source of business innovation is directly from employees. Your employees know the specific part of the business that they are involved with very well. Therefore, innovations come naturally to them. As they go about day to day operations, employees identify areas that are in need of improvement or could be done differently. Often, they will have their own ideas about solutions to problems or ways to address certain needs. Encouraging employees to bring these ideas forward and then supporting their development can significantly increase the amount of successful innovation in your business.

Employees can also be asked to specifically focus on innovation. Many businesses set aside time and conduct group ‘brainstorming' sessions to encourage the creativity and the generation of new ideas that the business can investigate and pursue further.

Another important but commonly overlooked source of innovation are customers. Your customers know what they want and often have innovative ideas about how their needs could be better met through new products and services. Taking the time to listen to what your customers are saying can greatly increase the amount of innovative ideas that flow into your business.

Your business competitors can also be a source of innovation. The important thing to remember is not to simply copy the products your competitors are successful with, but to analyze them and work out what you could do better. Consider what makes their product a success and try to innovate on that so that you have some form of market advantage over the competition.

In some the insurance industry, the importance of research and development departments cannot be overlooked. Organisations must invest large amounts of resources into research and development in order to come up with a new idea that they can make commercially successful. However, you can also conduct research on a small scale by conducting customer and employee surveys or analysing your past successes and failures.

Understanding how to identify and utilise the potential of these sources of innovation is important to the success of any business in a competitive market. Avoid focussing on any one source of innovation and try to be open to new ideas wherever they happen to come from.

As part of the innovation process, you will come across many different ideas, some of which will be better than others. In terms of innovation in business, proof of concept refers to demonstrating the feasibility of an idea. The purpose of this is to show that a concept or new idea has the potential to be utilised in a practical and successful way.

The first step is to screen all of the ideas that you receive to identify and separate the good from the bad. Idea screening will help you to eliminate unsound concepts and ideas with limited potential, allowing you to focus on ideas with the greatest chance of success. Rather than trying to pick the best idea straight away, try to eliminate the weaker ideas first. By process of elimination, you should be able to come up with ashortlist of high quality ideas with good potential.

Some background analysis of the intended market will also be useful at this stage. As the idea is still only in the early phase, this research just needs to cover factors such as market needs, potential customer base, possible product lifecycle and foreseeable risks.

The proof of a new concept or idea is the next step in the development of a product or service. It is a fundamental part of the innovation process and can begin as soon as an idea is mentioned. For example, in a meeting an employee might suggest a potential new product, immediately followed with some statement or justification to back up how or why it could work.

As an idea is further explored, it can be established as to whether or not it is even possible to make and implement, how much it could potentially cost and whether or not there is any market for the idea. At this early stage it may not be necessary to have exact data or information about the specifics of the idea's potential, but merely an estimate of what the possibilities are or are not.

As the idea gains support and momentum, a business should aim to conduct some research and forecasting into the specifics of the project. This is particularly important if resources are limited or if it would be expensive to move onto the prototyping stage without sufficient back up and support for the concept.

If an idea can be proven as a viable concept, it moves to the prototyping stage. This part of the innovation process involves developing and building an actual working model or representation of an idea. A prototype can be a complete, full scale, functional model or may simply demonstrate a small component of an overall idea. Prototypes may or may not be designed to look like the final product, depending on the scope of the design.

The modern trend in proving concepts and developing prototypes is to use computer modelling and simulations. These simulations of new ideas offer many benefits over conventional prototyping as they allow you to make an infinite amount changes and compare different versions of the same model. Computer generated models can be cheaper than building physical models however the hardware and software does have a high initial outlay.

Product Development

The development stage is where many great ideas lose momentum and fail to make a significant impact on the success of a business. This can be due to a range of contributing factors, but is often caused by a lack of support and resources. It is important to carefully manage the development stage to ensure that innovative ideas are able to reach their potential.

The development stage generally requires the biggest investment of resources of all the stages of innovation. This is because it takes a significant amount of effort to turn an idea and a basic prototype into something that is actually commercially viable. Many great ideas fail simply because of their poor execution and delivery in the market.

Product development involves taking the original concept and any available prototypes and improving and adjusting them until they are ready to be released into the market. As each version of the product is developed, it needs to be tested and evaluated for reliability, consistency, quality, effectiveness and other advantages and disadvantages such as simplicity of design and cost of manufacture.

It is important to avoid cutting costs at this stage as any mistakes or oversights during development can cause major problems later on. Perfecting the product during development will ensure that there are no surprises or unexpected expenses and delays when it comes to commercialisation. Remember that speed to market is important but will make no difference if the product isn't what consumers want.

The development stage also involves further market research. Developers need to know what the final product should look like and what consumers think are the most important features and functionality. This research can be conducted by getting groups of potential consumers to review different designs or by surveying targeted consumers on what they would be looking for in a potential product.

Once a final design is decided upon, development should focus on making the final version of the product ready for commercialisation. This is where the development team will need to start working to specific guidelines and boundaries including NAICOM approval, cost and ease of manufacture. Ideally, no further changes to the product should need to be made at this stage.

The main problem product development faces is that an idea can pass through many different people, departments and organisations, each with different objectives, before it is ready for sale. For example, an employee has a great idea for a new product that will fill a gap in the market and has great potential. They want the product to be of the highest quality, manufactured locally and better than anything else available, with many new innovations. However, the product developers and testers decide that the product will be difficult to make and unreliable, so they simplify the design. Finally, the accountants and marketers believe that the product will be too expensive and believe that it could be made significantly cheaper if the product was made overseas and the quality was reduced.

The problem is that the employee's idea is never actually delivered to the consumer. By the time it passes through each stage of the innovation process (idea, prototyping, development, commercialisation), the idea is watered down and moves further and further away from the initial concept. In the end, the product arrives in the market alongside many similar products and fails to be innovative at all. The potential advantages of the original product are lost along the way and the investment may fail to generate returns.