This year marks our 175th birthday. When William Fenton founded the Liverpool Independent Legal Victoria Burial Society, he probably never imagined that we’d continue to be around well into the 21st century, and yet here we are. I think there are a few reasons LV= has managed this, not least that we’ve been able to adapt and evolve, by keeping focused on the needs of our customers and members.
While we’ve successfully done this for almost two centuries, the pace of change in the market continues to increase and with it the risks to continued relevance. Having a clear sense of the trends that are driving this market change is a critical start point in working out how to respond. There is then the challenge of how to strike the right balance between running an existing core business and focusing on evolving for the future, particularly when that future is uncertain.
At LV=, we’re continuing to learn how best to address this challenge and then how we develop new customer propositions in response. In the uncertainty of a market that is changing rapidly, this requires a different approach to proposition innovation which we’re continuing to develop. I wanted to share some of our learnings so far that may be of use to others considering similar challenges:
• Setting up the right structure. We’ve had most success in co-locating a separate team of passionate people who are focused on new proposition development rather than purely stimulating innovation in existing teams. Couple this with a new proposition development methodology and a ring-fenced budget, we’ve found this supports an environment to experiment and progress at pace.
• Cultural embracing. New proposition development however can’t just be centred in a small team working away on their own. That team will need to work effectively with a range of other areas from compliance to procurement. To facilitate this wider support there needs to be engagement with the rest of the organisation to develop a broader innovation culture.
• Senior level buy-in. This work needs to be supported by the Board and senior leadership team, and ideally led by someone on that team. Without that supportive context, the constant need for justification can be time consuming and create a sense of uncertainty.
• Being clear on what constitutes progress. Innovating in conditions of uncertainty, will likely mean you’ll hit a number of set-backs and perhaps not have a visible sign of success as quickly as you’d like. It’s important to determine a way of tracking progress that you can communicate to key stakeholders. We use an “innovation scorecard” that captures a number of metrics that can effectively demonstrate this progress.
• Effective partnering. One of the most effective ways of developing new propositions is working with partners, which can sometimes be start-ups who are likely to operate in a very different way to a larger corporate. Being able to partner successfully with these firms and get ideas to market quickly can require a new engagement approach which should be considered carefully.
While these are useful learnings so far, in a sense our strength is the recognition that we have so much more to learn and that we continually look to improve on how we operate. Ultimately, success will be determined if we can continue to ensure LV= remains relevant to our customers and members for many more years to come.
Richard Hoad, Director of New Markets at LV=
LV= serves over 5.8 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual. We are currently the UK’s joint number one brand for Insurance and Investments, according to the 2016 YouGov Brand Index Buzz Rankings. We offer our services direct to consumers, as well as through IFAs and brokers.