16 Secure Tacit and External Knowledge in the Insurance Industry - Thomas Miller & Co. Ltd. Peter Heisig Thomas Miller & Co. Ltd. was founded 116 years ago. Its headquarters are located in London. The company focuses on the management of mutual insurance companies. Each fund is operated as a mutual insurance association (or club) with individual rights and shared risks. Most business is conducted in the transportation industry, particularly in the shipping industry. The owners of about 50% of the global tonnage are insured in some respect by clubs managed by Thomas Miller. In addition insurance is provided to many of the world's leading container ports, freight forwarders and ship agents. Industry: lnsuranc. Business Process: Produce and Deliver Services Employees: 450 in London and 150 agents world-wide Sales: http://www.thomasmiller.com KM Best Practice: Secure and distribute tacit '"-ledge Integrating and structure external know how Fig. 16.1: Company Overview- Thomas Miller & Co. Ltd. Thomas Miller & Co. Ltd. employs approximately 450 staff members in London, and 150 staff members in more than 15 overseas locations. The company also has correspondents in more than I 00 countries, including one in each of the major harbors around the world. 16.1 Knowledge management: content and learning The insurance business is controlled by contractual regulations. If claims are made for damages, these contracts have to withstand every legal review. Business processes are therefore dominated by lawyers and their tools of the trade, i.e., legal regulations, laws, contracts, and interpretations. In this context, the written word is particularly important. Written communication can be advantageous because expert opinions, memorandums, etc. become an integral part of daily business operations. However, the legal significance of words also results in cautious wordings and limited spoken communication. This was regarded as one of the cultural barriers that oppose the implementation of knowledge management. K. Mertins et al. (eds.), Knowledge Management © Springer-Verlag Berlin Heidelberg 2001213 Knowledge management at Thomas Miller & Co. Ltd. began to take shape during the development of a vision for the utilization of information technologies in the early nineties. The implementation of this vision gained fresh impetus through the arrival of a new Chairman in 1994. He focused knowledge management activities on content and learning, rather than on technical aspects. The technologies to be employed include a document management system, e-mail, and later, groupware and expert system applications (pilot application GUIDE- underwriting system). These thoughts led to the following two strategies of knowledge management. One strategy focused on the development of a structured knowledge basis for core business operations. The second strategy concerned cultural change. This idea focused on the development of a learning organization in which sharing knowledge and experiences is especially important. 16.2 From library to Business Intelligence Center To illustrate the new importance of information within the company, Thomas Miller & Co. Ltd. created the "Business Intelligence Centre" as a central location for pooling and structuring information. For this purpose, two existing libraries were combined. The goal was not only to combine the libraries organizationally, but also to develop a new identity. The image of a library, as it had previously been oriented towards books and other hardcopy materials, was to be dismantled. The two librarians were now called "information officers." The center focused on three jobs: • Identify and make available external knowledge and information (business libraries, suppliers of information, online databases): "If they don't have the answers themselves, they at least know who- internally or externally - can supply the demanded information," was the motto for conceiving and implementing this strategy. • Development of a regular, continuous supply of information, e.g., daily e-mails with the most important press clippings from the Financial Times or Lloyds List sent to all employees worldwide. Another example of an appropriate information medium is the internal electronic weekly "Miller News". • Management of the Lotus Notes database to ensure coherent structure. In addition to central knowledge resources, the center can now also supply secondary information, e.g., good restaurants for important business lunch appointments. These services that are helpful in daily business operations led to a change in the reputation of the former library. Evidence of this is the increase in inquiries (ca. 2,500 inquiries per year). Personnel-wise, the library was staffed with five people, instead of three as before. Two teleworkers handle inquiries, two 214 others edit the information, and one staff member is responsible for the Lotus Notes database. There are various knowledge bases maintained under Lotus Notes: • Main topics in three categories: insurance market, customers, and suppliers; • the "Miller Encyclopedia": an Internet encyclopedia with information on all topics that are relevant to the transport industry; • Yell ow Pages of all staff members with photographs, position, job description, language skills, and voluntary information on hobbies; • Notes from conferences, meetings and discussions with customers, suppliers, and competitors; • Internet directory with important links to external WWW pages. 16.2.1 The Miller Online Encyclopedia: Secure, structure and deliver knowledge One important issue in knowledge management is the question how to structure the knowledge and how to assure high quality. The solution found by Thomas Miller & Co. Ltd. was called the "Miller Encyclopedia". This application was not only designed to structure knowledge about the transport industry relevant for the insurance business, but also to set a standard and to secure the knowledge of suppliers and clients. The "Miller Encyclopedia" is an Internet application with three access levels. The highest level is accessible by any Internet user, provided he has registered on the site. A second level offers all customers relevant information, and the third level contains specific customers claim records. These two last levels are used like newsgroups or/and discussion groups to poll the knowledge that offers the best solutions to members. 20% of the staff volunteered to contribute to the development of the modules of the "Miller Encyclopedia". This was due to actions undertaken to promote internal direct communication and the exchange of information and knowledge. Another factor was the e-mail culture at Thomas Miller & Co. Ltd. For years the exchange of information between headquarters in London and offices, customers, and suppliers overseas had been handled through e-mail. 16.2.2 Workflow application integrates lessons learned approach For the settlement of insurance transactions, it is fairly easy to determine certain processes that can be supported by appropriate workflow systems. When specifying these systems, the persons responsible at Thomas Miller & Co. Ltd. did 215 not forget to determine "lessons learned." For example, a project can only be concluded if the respective person in charge enters his or her lessons learned during the case in the system. A Case studies' database with legal cases and experiences was achieved with just one additional work step. Full text search capabilities allow each staff member to access the company's know-how that has been electronically recorded. The transition from sequential task processing to parallel processing combined with more efficient document management improved the generation of insurance policies considerably. In the past the preparation of a I 00-page policy used to take three weeks; today, this is accomplished within just a few hours. -- --- -- - - --- --- -- ---- -- ---------- - ~- -- ---- - ---- - (,1 Nllle1 forum (N•IIet'i. Uern!'ral fotuml ~1cro : otr Internet l 11.plorm :· • .... -.-.. X B 1'1 r., b . A '6 . . . - .. ;'- l ~ ' - ' <-< -=~ -- --- ~ - ____ , __ -_-_-_ .. ~- ----- __ -_ .. -___ 1;_ • Mlu.ER FORUM Millen Gentral. Forum ,....,.,.,,..__! D~.-1 c .......-! !.1 De. CDIS (,'!mlltioa I l ronJXm,wl C)pn tfMMik Ieft .. •n D S,ai:a Cu•MS ••tics . Mc»et DnnBtm .!1 Sflndmhean ([ 'Pl'Ql! lf) JJ [tt4Hrckwi.S&irx - Pvawermuls a t qpo.!'Uf l crwshjptcrwdt•.,• Xt"ahawa Efrw?J?I o ... AndtewCrli,g-Bennett }...Nov-1 998 Samuel Bun 29.0ct..1998 Clifl'OJd Pufeu 6-0d-1998 Po lor Boy!t 29.$'1" 1998 Afrodi!e Donopot16 29.$'1"1998 Lef\eris-Paneru T rtvot EDiston s ..... 1aun PeterJonu 6-Sop-1998 14-Aug-1998 I ~Jun.l998 3-Jun-1998 Mrrrlwu sqp.i- aM fkNn: Yusds IHnlfk aM SWtt at Wuk) Rrn.latitu 1997 Heuy LA.wford 27-AP<-1998 19-AP<-1998 8-AP<· I998 l.J Sntnn' rtr=d"ekf- w tt•nwp1 l!p• rir! q 'LW:0!1!Q! Hnry Uwford !J 1M "AsbaflAw;i.alCrisb"' . P&llaUndtg Uuspoow! JJ Tk Mllkuig 1Ygr :. :OOOl prftk• (f um< m,W! Fig. 16.2: The Miller Forum 16.2.3 New forms of learning Aodrew-Crlig-Buaneu :26.-Feb-1998 Htny L&wl'otd ll-fob-1998 In 1995, the company introduced the position of Director of Learning. This job includes the initiation of cultural change to help employees to pass on experiences and knowledge. To identify, store, and spread knowledge, Thomas Miller & Co. Ltd. created different platforms. • One platform for promoting knowledge and the sharing of experiences is the weekly or monthly soapbox (= "standing on the soapbox"). In the 216 style of the speaker's comer in Hyde Park, a director or senior manager shares his or her insights on a current topic, or explains the current development of the company. These statements are also recorded on video. This pragmatic approach is further illustrated by the use of the lunch break (with sandwiches!) for this kind of event. • A second way consists of monthly priority programs ("flavour of the month"). During a certain month, there are several training sessions, workshops, and videos on one certain topic. • As required, the company also organizes informal lunch-workshops ("lunch bytes") with question-and-answer sessions on selected current topics. • A further form is a so-called "safari." This means that a staff member works for six to eight weeks in another department or in the company of a customer or supplier. 16.2.4 Secure tacit knowledge One important barrier for knowledge management is the lack of time to make tacit knowledge explicit for experts and document it. Experts usually have little time. The best practice solution Thomas Miller found is very interesting because of its clear focus, easy handling and low investment. The solution is 'in-a-nutshell' videos that present expert knowledge. The focus of these expert videos is knowledge that was acquired within the company itself. Knowledge which could be learned at the university or other training courses was not recorded. Therefore some interview guidelines were worked out by the Director of Learning. Two experts are invited to talk about their experiences and tips & tricks during 15 to 30 minutes. The video is then edited and copied externally, and sent to all offices worldwide. When organizing these various offers, the company pays particular attention to the contents of learning and knowledge that are almost exclusively covered by internal experts and knowledge workers. Examples of this procedure are so-called "cultural briefings", which attempt to brief staff members on specific cultural practices, standards, and the habits of a certain customer. For example, Greek shipowners who live in London should be treated differently than Greek shipowners who operate from New York City or one of the Greek islands. In insurance businesses, which rely heavily on trust and commitment, the exchange of knowledge is very important. 217 16.3 Achievements There are hardly any examples of successful knowledge management in insurance businesses. The solutions of the medium-sized company Thomas Miller & Co. Ltd. may encourage even the large companies of this industry. With its focus on structured document management through workflow applications on one hand and the promotion of know-how exchange in direct communication on the other, Thomas Miller & Co. Ltd. combines the most important aspects of knowledge in the service industry. The first focus makes sure that knowledge processes and explicit knowledge are managed adequately, and are accessible at all times, while the second focus accesses part of the tacit knowledge, the "tips and tricks" of how to do it best. At the same time, central know-how modules are stored, copied and spread globally by low-cost technologies (video). Lessons Learned at Thomas Miller & Co. Ltd. The following aspects were decisive for the success of knowledge management from the point of view of the people in charge of the initiative: • Keeping it simple like using video-tapes to store experiences from experts, • building on ex1stmg processes like the underwriting process and the existing e-mail culture, • internal branding and naming metaphors for internal marketing and achieving the commitment of staff people, • senior management support, • success as a success factor, • external recognition helps internal coordination, • IT director business-focused and business process-oriented.