Recrafting insurance for a new generation of business owners
Japanese SMEs: Facing a succession crisis
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Recrafting insurance for a new generation of business owners

Jessica Twentyman — February 2020
NN Life Japan has transformed its insurance customers’ experience by embracing Agile and cloud. CTO Rob Beattie outlines how it has sharpened its appeal to the country’s SMEs.

Across Japan, small and medium-sized businesses (SMEs) are facing a succession crisis. These companies are the backbone of the country’s economy, accounting for 99% of its enterprises and employing some 70% of its workforce, but they are caught in a demographic squeeze.

The average age of SME bosses now hovers at around 66, according to figures from the country’s Ministry of Economy, Trade and Industry. So while many are preparing for retirement, would-be replacements are in short supply, due to Japan’s persistently low birth rates.

As a company focused on selling insurance to the SMEs, NN Life Japan is doing its bit to help customers navigate the challenge. In recent years, the company — part of Netherlands-based NN Group — has launched new products offering protection to companies in the event of critical illness or sudden death of older managers. Its community investment program Mirai-no-Shachō (Future CEOs) meanwhile, aims to equip the next generation of Japanese SME leaders with the skills they’ll need, via a range of education and professional development programs.

At the same time, NN Life Japan faces its own challenge. As part of an industry that is both notoriously risk averse and slow to adopt new technologies, it needs to be increasingly mindful that tomorrow’s younger SME business leaders will expect an entirely different experience of buying and managing their insurance policies — more modern, more streamlined and almost entirely digital.

““Rob Beattie”
Rob Beattie, CTO for NN Life Japan

That realization inspired NN Life Japan in 2017 to embark on an ambitious digital transformation journey. This focuses on using Agile development techniques to reimagine the customer experience, and is led by chief technology officer Rob Beattie, a Canadian who has spent 17 years living and working in Japan.

 


Rediscovering an Agile heritage

From the outset, Beattie and his team faced significant challenges, he says. The company, like many in the insurance sector, was hampered by legacy technology and older, deeply entrenched ways of working.

The company was entirely reliant on third-party technology partners for application development work. “We had zero in-house developers and less-than-zero brand awareness as a tech employer,” he says. Among in-house tech staff, he adds, fear of failure and resistance to change were high.

With that last point in mind, one of Beattie’s first tasks was to win over his existing team to the idea of Agile working, challenging the idea that what was viewed as a buzzword-heavy, Silicon Valley-led trend was not a good fit for a relatively conservative Japanese company. In fact, as he pointed out to the team, some of the most fundamental principles of Agile software development have their roots in lean product development practices pioneered by Japanese giants such as Fuji-Xerox, Honda and Canon in the late 1970s and early 1980s.

To illustrate his point, Beattie widely distributed a 1986 article from the Harvard Business Review by academics Hirotaka Takeuchi and Ikujiro Nonaka, ‘The New New Product Development Game.’ In this article, Takeuchi and Nonaka describe how small, autonomous, cross-functional and self-organizing teams at these companies worked in short iterations with fast feedback loops to introduce new innovations, achieve faster times to market and higher product quality. They borrowed the term ‘scrum’ from the game of rugby, and their article went on to directly inform the development of Scrum as it is used widely in software development today.

Says Beattie: “The article was important in that it gave us more confidence in saying, ‘What we’re suggesting here isn’t smoke and mirrors. And it’s actually not so different from what a lot of success stories here in Japan have done for many years.’ That was an important shift in mindset for us all.”
Embracing cloud

That still left him with the issue of how best to reskill the existing workforce and attract new coding talent to his team. Here, a way forward was found in the decision to take NN Life Japan’s under-utilized Salesforce.com implementation — which was at that time used solely for sales outreach — and make it the company’s platform for all customer-facing engagement. This meant adding Salesforce Marketing Cloud and Salesforce Service Cloud to the existing Salesforce Sales Cloud application services.

Employees at NN Life Japan, from both the tech team and the wider business, were encouraged to enrol on Trailhead, Salesforce’s online learning platform that provides lessons and tutorials on coding for the platform. It takes a highly gamified approach, in which students take quizzes, participate in hands-on challenges and earn badges for modules completed. Since 2017, says Beattie, NN Life Japan employees have collectively earned 8,000 Trailhead badges and 18 have achieved the coveted top status of ‘Ranger’ (100 badges).
Continuous flow of software

Alongside encouraging this training, the company focused on using social media to strengthen its reputation as a tech employer, showcasing the opportunities open to employees to develop in-demand Salesforce skills. Since 2017, 70 new application developers have joined the company, says Beattie.

Today, 120 people are working in three Agile ‘tribes,’ divided into 15 ‘squads,’ on transforming the customer experience that NN Life Japan offers its customers. The tribes are organized according to three overarching corporate aims: to be an SME supporter; to be a flexible partner to insurance agents; and to offer speedy and reliable execution in internal processes. Each squad, meanwhile, brings together engineers and developers from the tech team on one side; and ‘citizen developers’ from the business on the other, with a remit to develop and improve the processes that underpin customer experiences.

NN Life Japan’s implementation of the Salesforce platform has also been rearchitected to support continuous integration/continuous development (CI/CD). In effect, this has involved the deployment of ‘sandboxes’ — environments where new features and functions are developed and kept separate from the main production environment until they’re ready for release — and tools that automate their deployment into the ‘live’ environment.

“The results of all this work have been fantastic,” says Beattie. “All of our major customer-facing engagement processes are now running on Salesforce in some form, and our squads are empowered to continuously improve on them, for better experiences for the customers who use them.” New software is released daily, he adds. In fact, NN Life Japan is on track to achieving 400-plus new releases annually.
Making insurance tech cool

At the start of this journey, NN Life Japan’s message to would-be tech recruits was less than compelling, he concedes. “We were basically asking, ‘Who wants to come work for a niche Dutch life insurance company in Tokyo?’ Not an easy proposition,” he says.

 

“Ecole Polytechnique’s X-Novation lab=
Shibuya Scramble


Today, he can give them a whole list of reasons why they might want to say yes — and a planned move of the company’s premises is set to add to the company’s attractions as a tech employer. In May 2020, NN Life Japan will move to Shibuya Scramble Square, a recently opened high-rise building in a youth-oriented district that is fast developing a reputation as Tokyo’s most dynamic tech hub.

“This building is currently one of the most talked about buildings in Tokyo. There are lots of start-ups in Shibuya and an interesting community growing up, focused on innovation and new ideas. Google has just moved to the area, too — so there’s a lot of buzz associated with us moving there in terms of our brand as an employer. We’ve made a lot of progress already, but there’s still a lot more for employees to gain from working for us.”

• Rob Beattie was a speaker at Dreamforce 2019 in San Francisco

First published February 2020
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