Innovation in Simplicity


At a carrier conference earlier this year, I had the chance to listen to Robbie Bach, the former president of entertainment and devices at Microsoft. Responsible for developing and building out Xbox, Xbox 360, and Windows Mobile, along with other entertainment aspects of the computer giant, Robbie spoke about how he turned the online gaming division into a profitable business. Because it wasn’t always profitable. In fact, his division lost $7 billion in one of its early years.  

What Robbie Bach did to turn a huge loss into a gaining market share – and ultimate success for Microsoft, even in the demanding Japanese market – was turn toward simplicity. He outlined three major components to delivering innovation:  


1. Business

Robbie looked at his business in a different way. He started charging a subscription-like fee for the use of his online games. Every vendor told him no, but he thought it would be an innovative way to price the services. Eventually, people began to gravitate to his model because they could share the gaming experience, talk to friends and see other people online. It wasn’t that the games were different – but the business model was.

2. Experience

This isn’t what you might think. Having experience on your staff is not the focus of innovation. Instead, we need to turn our attention to the client experience. How our customers view us is far more important than the number of years our staff has been working. Take Uber as an example. The company isn’t using any new technology – they only have cars and a mobile application. But, they took a look at the experience offered by taxi services and improved upon it. Microsoft took a look at improving the customer experience in gaming and communicating. It changed the way people play video games. 

3. Technology

Without question, technology plays an important role in innovation. However, it should not be the focus. Instead, we need to keep the first two points as priorities and look to see how technology can accommodate or improve them. Not the other way around. 

Clearly, our industry needs innovation. However, we are often paralyzed by the enormity of “trying to be innovative.” I challenge you to think simply, not big. The timing is right to evaluate your practice. Find ways to transform your business model and create a more valuable client experience, with or without the help of technology. 


Bottom Line

Time has changed our industry, so it’s time to change the way we do business. Change can doesn’t have to be complicated, however. Look to simplicity for innovation. 


Learn More

Robbie Bach:


About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets.


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Innovation and Insurance


On Oct. 21, 1879, Thomas Edison invented the first commercially viable light bulb. It lasted 13.5 hours … but soon, the average bulb lasted 150 hours, and within 10 years, commercial bulbs glowed for 1,200 hours. The speed of improvement on Edison’s commercial bulb was incredible. 

Today, technology and communication are the new light bulb. Google, Apple and Microsoft have changed the way we live, communicate and do business. However, the insurance industry isn’t catapulting like other industries with its speed of innovation. Why? Is it because we’re full of mature carriers and distribution? It doesn’t have to be that way, does it?

We have to look at new opportunities to expand and, at the same time, go back to our roots. Only 43 percent of Americans own life insurance outside of group contracts. Of that 43 percent, 70 percent believe they are under-insured. Why are we not addressing our own clients? What level of service are we providing to our existing clients?  

Richard Branson started Virgin Airlines based on a bad service experience. The airline industry hasn’t been the same since then. Which one of your clients will impact your business by leaving you, challenging you or becoming your competitor?

I challenge all distributors in our industry to force innovation. We can’t continue to help Americans at the level they need without significant change. It requires investment, commitment and vision. Bringing new people into the business is only part of the solution; we have to change the way those new people interact with their clients. Within 10 years, we have to distribute products in a new way that can reach more people and grow, just like Edison’s commercial light bulb. 

The Bottom Line: Innovators like Thomas Edison and Richard Branson changed the way we live. Our industry must also change so Americans can continue to thrive after catastrophic events. The light bulb changed 10 fold in 10 years; we have to do the same.   


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