Michael Carrel - Nationwide Insurance

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.


 


Transcript 


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.