Executives at Manulife Financial knew they needed to play more offense when it came to exploring and experimenting with new technologies.
Manulife’s chief information officer “has basically said that the old strategy of watching technologies come out and then throwing money at them to try to catch up is no longer valid,” says Jesse Bean, the company’s head of innovation, digital strategy, and M&A execution. “Exponential growth in technology is just too fast for that strategy.”
To speed up the company’s tech metabolism, Manulife last month launched the Lab of Forward Thinking, or LOFT. A big part of the LOFT’s mission, Bean explains, is “to create dedicated teams to filter those new technologies, and figure out which ones we should latch on to, in a cheap fashion by using lean startup and other methodologies.” The LOFT has 15 employees who are based in Boston and Toronto, Manulife’s headquarters.
We spoke with Bean; Ace Moghimi, head of innovation in North America; and Sebastian Blandizzi, a senior vice president at Manulife’s investment division to learn how the LOFT came about — and what they hope comes out of it. (Moghimi and Bean are pictured at left.) Manulife has about 29,000 employees, 53,000 agents, and $41 billion in 2014 revenue. It operates in Canada, the U.S., and Asia. In the U.S., Manulife primary markets its services under the John Hancock brand.
How the Team Came Together
In June 2014, Blandizzi, who is the chief information officer for Manulife’s Investment Division and Group Functions, held a town hall meeting on creating systems that could enhance the company’s ability to innovate. By November, Blandizzi had approval to begin building a team, and Moghimi, who had previously been working in derivatives strategy, came on board.
Why put the team in Manulife’s Investment division, as opposed to corporate? “The divisions have a budget,” Moghimi explains. And the executives who oversee LOFT are both CIOs, of the Investment division and of the entire company. “We’re very much a technology-centric group to start, but we’re thinking about how we reach the rest of the organization through our programs,” says Moghimi. “We’re going to offer hackathons, workshops on design thinking and lean startup, and eventually, we may have an innovation catalyst program.”
The employees in Boston and Toronto include designers, software developers, and business people. “We also have developer resources in Malaysia we can leverage, and we’ll hopefully have an intern for each project team,” says Moghimi. Project teams consist of about four people each. An executive innovation committee includes Blandizzi and other executives responsible for corporate strategy, wealth management, and information services.
The LOFT’s space in Boston can accommodate about 35 employees.
The Plan
The slide below lays out what the LOFT plans to do.
Initially, LOFT has been sourcing ideas for projects from senior executives, Moghimi says, “to make sure our work is aligned with leadership’s interest and strategy intent.” But the group has also been holding “focus sessions” with each of the company’s three business units to explore their needs. Innovation fellows from the LOFT and champions in each business unit help set up those sessions.
Bean says that the people most eager to participate in LOFT’s initiatives are in the tech-centric 19-35 age range, and also early career executives in their mid-30s and early 40s. “Those are people who really want to make a name for themselves, and they have the power to make change,” Bean says.
Small teams within LOFT are intended to filter ideas and evaluate technologies, Bean says, “helping to determine which ones we should latch on to, in a cheap fashion by using lean startup, design thinking, and triz methodologies.” Bean says LOFT will have the ability to execute projects and “get them to a point of showing something that can stand up. If it’s valuable, and if everyone agrees, then we begin to think about how to scale,” with help from other parts of the organization.
Among the topic areas they are exploring, Moghimi says, are machine learning, cognitive computing, accelerated delivery of front office solutions, block chain, and augmented reality.
The First Hackathon
The LOFT celebrated its official launch in July 2015 with an employee hackathon over two days. The challenge that teams worked on: “How might we prepare to serve our next generation of customers and expand our services to those who are just beginning to think about securing their financial future?” About 100 employees participated, and a handful of senior Manulife execs came to Boston on the final day of the hackathon to judge the projects and participate in an opening reception for the LOFT, which attracted more than 300 people from the local innovation community. Manulife partnered with the consultancy Scramble Systems to organize the hackathon.
While the LOFT’s first hackathon was internally-oriented, Blandizzi says that future events may involve outside entrepreneurs and techies. “We are sorting through the IP issues, and working with legal and audit and compliance on that,” he says. “Many other companies have done it, so we’re exploring how can we follow suit with our own spin, and take in ideas from the startup community. We’re open to engaging with startup organizations that want to partner with us – and help solve some very complex problems.”
Expectations
Blandizzi says that it’d be “a recipe for failure, if you wanted ROI in the first year.” But his goal is “to build a capability in our organization where we can fail ideas quickly, and get to those Uber ideas. Most people see only the Uber-type ideas, but 90 percent of things that startups try fail. If you have a $10 million failure that you can’t really document any learnings from, it’s not a successful failure. But a couple hundred thousand dollar failure — an idea that everybody thought was viable, and that has helped identify other areas that can be efficiently executed on — that starts to translate into a successful failure.”
Blandizzi talks about producing a “quarterly failure report” for the LOFT “that would list the failures, and speak to the learnings and the successes of those failures.”
“In the early days, LOFT is more about building an ecosystem and culture here that can be innovative,” Moghimi says. “But we need to deliver some business value too, which could be new business lines, products, services, a new technology that increases the efficiency of a business area.”
Bean says that the LOFT “is looking at solutions that have a longer runway than a typical IS project” at Manulife, which tends to expect a payback in two years or less. “We understand this is a three- to five-year stint,” he says. “We have to make returns in that period, or else we’re not doing our job.”
