Pip Marlow joined Suncorp in 2016 as its chief of strategy. She has a brief to innovate, but it’s not change for change’s sake - it all comes back to delivering value for customers and stakeholders, and that starts by defining the why.
By Beverley Head
Shortly after Pip Marlow joined Australia’s insurance and banking giant Suncorp
, Tropical Cyclone Debbie smashed into Queensland. The storm claimed lives and caused billions of dollars of damage across Queensland and northern New South Wales.
The devastation was clear, and the impact on insurance businesses would prove immense. But the lens Marlow viewed Debbie through didn’t focus only on the insurance claims spike and how that should be tackled.
Suncorp’s then freshly minted strategy chief recognised that some households and businesses seemed more resilient; they were better prepared, they recovered faster. The question that exercised her was could that resilience scale? No one could stop the storms, and science suggests that there could be more extreme weather events ahead, but could the resilience be unpicked and replicated?
Instead of focusing purely on the end game – being there when the claims rolled in – Marlow wanted to explore ways to make people more resilient up front.
“How do we move up the value chain ... to a place of prevention?” she wondered.
It was that fresh thinking and different lens that Suncorp sought when it hired the former managing director of Microsoft Australia as chief executive officer of strategic innovation in December 2016.
ANZ had done something similar in March 2016, when it hired the former boss of Google in Australia, Maile Carnegie, as its head of digital.
Banking and insurance are two of the industries being profoundly disrupted by digital technology and start-up businesses. By bringing in a senior executive with more than two decades’ experience in one of the biggest technology companies on the planet, Suncorp, like ANZ, was looking for a strategic leg-up. However, that didn’t mean Suncorp had been stuck in some strategic rut.
CEO and managing director Michael Cameron revealed to the market in August 2017 that the One Suncorp strategy – which brought Suncorp’s brands together with the customer at the centre – was working, buoying growth and helping deliver a more than A$1 billion net after-tax profit for the last financial year.
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Sticking with the status quo, however successful, can be dangerous; Marlow says there are two options for incumbents – disrupt or be disrupted.
“The issue when you are the incumbent is that your biggest competition is often yourself. When you have large, mature businesses that you have to think about disrupting, and challenging the way that you have always done something … that is hard.”
Suncorp, is approaching the issue in a bimodal fashion – it’s continuing to serve existing customers, but also looking to evolve customer value. At the same time, it’s looking to “bring the outside in” by forging relationships with insurtech start-ups that are creating new digital products and services that, on face value, compete with what Suncorp does.
Trov, for example, is a mobile app that lets people take a photo of something they own and arrange single item insurance for it there and then, even for quite brief periods. There was perceived value for customers and Suncorp didn’t want to reinvent the wheel, so it took a stake in the company and also markets the app on its website.
Marlow sees this sort of partnership (which was in place when she joined Suncorp) as an exemplar of how to partner with insurtechs in order to add value for Suncorp’s nine million existing customers. “I don’t look at insurtech as competition, I look at them as an asset for us to partner with and help to deliver customer value.”
Smart partnering also injects pace. “If we have to manufacture everything it will slow us down and it will, I think, limit the type of innovation we can bring in,” she says.
Tapping the diverse insurtech ecosystem means Suncorp has a broader range of solutions to offer customers without compromising its core business.
Marlow says her team “understands that the world is changing, and while that might create rifts for our business it also creates opportunity for us. So how do we start now to test, experiment and learn around this hypothesis. How do we move from possibilities to probabilities and bring them to market?”
She’s added heft to the team by hiring Dr Rachna Gandhi, previously CEO of Service NSW, who radically changed the way citizens and governments engage with one-stop shops, digital stores and online licences – bringing the state’s digital engagement strategy to life.
To keep abreast of global trends and developments, Marlow turns to Twitter for daily updates, taking feeds ranging from the Harvard Business Review and the World Economic Forum to TechCrunch. She attends events that give her insights about her own and other industries and sectors. She’s one of three female board members of the Australian Rugby Union and a top-notch networker.
The tools of her trade include strategic methodologies such as strategic drift modelling to identify strategic risk and support arguments for experimentation, while acknowledging that the rate of failure will be higher than that of a more mature business model.
She is also aware of the importance of a culture that appreciates the need for innovation.
“If you’re taking business cases back to the organisation, they won’t look, or feel or smell like business cases you see in large, mature businesses. You’ve got to be able to account for that innovation, the value that you have created,” she says.
The opportunity to work in a pro-innovation, Australian firm, in an executive position alongside Cameron and to be “closer to the centre of gravity” than she had been at Microsoft was a particular attraction of the role.
“I really wanted to do that, [to] sit in the leadership team of a large Australian company with the courage to question the way things were done and find a way to do things better for our customers. I wanted to work in a company up for a transformation agenda. I get paid to look at things through a digital-first, mobile-first lens.”
Suncorp handles 110 million digital transactions with customers each year, 75 per cent of clients use mobile banking services, and 15 per cent of policies are renewed online each month.
"The issue when you are the incumbent is that your biggest competition is often yourself."
Marlow’s Microsoft background also means that the concept of partnering is “deeply engrained in my corporate DNA”.
“If you were to talk to Microsoft, they would talk about 95 per cent of their revenue going with and through partners.” Marlow stresses partnering is not procurement: “It’s actually about how we help our partners thrive. So when our partners are doing a great job that means we are delivering value to our customers, which means we are doing well.”
She also says she is “used to a model that drives innovation, and part of driving innovation means taking risks, making them safe, innovating and getting back on that horse. Insurance is a business that’s been all about measuring risk ... I think I bring another element of taking risk.”
However, having an innovation culture for its own sake is a flawed strategy, according to Marlow. There has to be “clarity in the why”, she emphasises. “Why is innovative culture important to your organisation, important to your customers, and important to your shareholders?
“When we invest our shareholders’ money into new growth areas, that’s a real commitment. We are doing it on behalf of our shareholders. We have to believe that we can invest that money well on their behalf and get a great return.”
Marlow also stresses the need for diversity, and not solely gender diversity (although Suncorp does boast a leadership team of seven men and six women), but a diversity of forward ideas, debate and people. “When you don’t have that you know you’re not mirroring the market you serve. You are not building a product, solution or service that actually embraces all your customers.”
It’s also critical to look out to the horizon. Marlow says that, for example, at Suncorp that means thinking about driverless cars. If customers don’t own cars, but need to get from A to B, possibly using driverless cars delivered as a service, what does that mean to Suncorp’s business model and products?
“If something happens, who is going to be there in that moment? That moment may not exist today, but we need to prepare and ensure that we have [those services] ready for them when it happens. We want to be the company that’s there for [its] customers in those moments, not just today but tomorrow. We think that’s a responsibility that we have,” she says.
How then do you convince your shareholders of the need to invest in still distant horizons?
“Today our shareholders have invested in our business, to help us deliver on that vision for today. And we believe that we have a responsibility for longevity and that investment.
“We know that there is a need not just to deliver this year’s result but to build a business that’s resilient. That’s the commitment we give them in our three-year, five-year business plans.”
The board, too, as guardians of the organisation must embrace the future. “Boards don’t need to be subject-matter experts on AI [artificial intelligence] or machine learning, but they have to have enough understanding to question, challenge and engage with management about [whether] they are thinking about how it impacts [insurance] and how to embrace those changes,” Marlow says.
She says there is value in taking senior management abroad to see innovation at scale in places such as Silicon Valley or Israel, but also to engage with the local innovation ecosystem and to constantly learn more about embracing strategic risk and opportunity.
“Part of my remit is ensuring the board and management think about [the] strategic risk of the business … the tectonic shifts in terms of what they allow us to do for our customers,” says Marlow.
Knowing and analysing those risks is ever more crucial, because strategy today is increasingly shaped by the choice of whether to disrupt or be disrupted.
Leaders who inspire
In the 21 years that Pip Marlow worked at Microsoft, it was led by Bill Gates, Steve Ballmer and Satya Nadella, each with a very different approach to management and leadership.
But it was Satya Nadella’s approach to people, culture and transformation that had the biggest impact on Marlow.
“Satya is very strong on alignment. I saw him bring people out of their silos to align them with a common goal and purpose.”
Marlow said he drove that issue very hard during Friday leadership meetings to ensure teams understood the purpose of the organisation and their role in achieving that.
“He is a very purpose-led leader and I have formed to be a purpose-based leader.”
At Suncorp that translates to developing services and products to support people seeking their first home, or needing help when something has gone wrong.
“The other thing Satya helped me with is the ability to accept failings – you can’t avoid the inevitability of failing, but when you do there is that learning.”
Like Nadella, Marlow believes it is how a business responds to failures on the road to innovation that define it.
“You have to do some things that don’t land how you want them to, but you stand behind failures and learn from them, and allow them to feed that passion for innovation – not kill it.”
Pip Marlow's innovation strategy scaffold
Understand the why
Organisations find it easy to talk about “what” but you need to be clear on “why”.
Strategy must push you to do things that you didn’t think were possible, that stretch you out of your comfort zone.
Establish feedback loops for customers, partners and employees to ensure the strategy stays dynamic; keep a growth mindset.
Create the right conditions, systems and symbols to exercise the strategy; if your strategy is to grow your business then you can’t run it like a standard business.
If strategy requires a lot of experimentation, ensure you reward people for experimenting, not just for success.
Don’t fear failure
You could be one step closer to success; acknowledge that when something fails.