Texas Mutual Chooses Self-Disruption Over Complacency To Stay Ahead
Rather than waiting to be disrupted by competition, Texas Mutual chose proactive transformation to deliver seamless customer value faster and better than ever before.
Download Full Case StudyIt was Christmas tree season and the light illuminating the plant nursery had gone out. David Foster, a 19-year-old nursery employee, shimmied up to replace the bulb when a coworker turned on the crank for the pulley. Foster's hand was caught in the gears. Three fingers on his right hand were severely injured: two bone fractures, 14 stitches, a tetanus shot, and an IV bag of antibiotics. Surgery seemed inevitable.
The nursery provided workers comp insurance through Texas Mutual, so Foster was able to get help at no personal cost. "I started receiving monetary compensation quickly and the payments came like clockwork," Foster said. "But getting medical help from all the specialists and working through the system was difficult. Going online to find medical providers was really easy. But then coordinating medical care with the claims adjustor is by phone, or even fax. I'm 19-years-old, I don't have a fax machine."
Foster, along with the rest of the 1.4 million employees covered by Texas Mutual, is the main reason the organization decided it was time to make some changes.
The Landscape Was Changing
When Texas Mutual formed in the nineties, Waterfall was the norm. But things had changed. In 2018, there were over 240 insurtech deals for a total of $5.7 billion globally. Major insurance companies were rolling out tech-based products like Nationwide's SmartMiles program. Customers expected digital-first experiences.
"Right now, we have 'islands of digital,'" said COO Jeanette Ward. "Our customers can do a lot of things online but not everything. They can do basic things like pay their bills, and file a claim, but not the whole process. We think Agile can help us create the model customer experience."
Rather than waiting to be disrupted by the competition, Texas Mutual chose to take proactive steps to evaluate their systems, test their culture, and upend processes, all to deliver seamless customer value faster and better than they've ever done before.
IT Senior Managers Ken Ivie and Kirk Olson had been trying to implement Agile practices with their teams, but their DIY approach kept failing.
"I didn't do enough reading, I just knew the basic concepts," Ivie explained. "I didn't have the roles defined. I would try and do Sprints so we would start, and then we would revert back, we would start and then revert back. That happened a couple of times. And finally I admitted I needed an expert."
Olson researched Agile experts, looking for proof of knowledge, experience, and culture fit. They contacted Agile Velocity in September 2017. The contract was signed five months later.
"It takes people at the highest level of the organization who are hungry for a better way," Ivie said. "They are happy with us, they don't want to replace us, but they are hungry for better, they are hungry for faster."
The Guinea Pigs Experiment
The transformation officially began in late February 2018 with coaches arriving at Texas Mutual. Leadership received four days of executive training, and pilot teams went through a 2-day Agile and Scrum fundamentals class. Over 18 months, five coaches became embedded at the team, system, and leadership levels.
Before the coaches arrived, teams were formed in silos. Design teams weren't part of delivery teams. After learning about the extensive handoffs between teams, coach Shane Billings asked permission to try an experiment: one cross-functional team. They called themselves the "Guinea Pigs."
For three months, Billings worked as a scrum master for the Guinea Pigs to show stakeholders what could be accomplished with one cohesive unit. The experiment was a success.
The Guinea Pigs went from releasing every nine months to having the capability to release every two weeks.
Cultural Evolution
Texas Mutual moved into a new headquarters in October 2018, a building designed to encourage collaboration with reconfigurable cubicles and group seating throughout every floor. But the cultural shift went deeper than the physical space.
They formed the "Culture Crew," a team of managers and leaders to improve employee welfare. They installed a Kanban board on the second floor where anyone can place a post-it with feedback and track its status. Business Process Owners shifted from asking "what's best for underwriting?" to "what's best for Texas Mutual and our customers?"
The Agile approach brought benefits beyond IT to the entire organization, encouraging employees to work together to achieve high-level organizational goals.
Transformation Progress
Texas Mutual is in the Predict stage, working to achieve predictable value delivery. They're also laying the foundation for improved time-to-market by implementing continuous integration and continuous delivery, while leaders work together to reduce technical debt and simplify architecture.
The Results
Delivery cadence improved from 9 months to 2 weeks
Empowered teams with high-functioning leadership
Integrated value delivery across the organization
Improved collaboration between business and technology
Cultural evolution toward customer-centric design
Business Process Owners now ask "what's best for customers" instead of "what's best for my department"
Measurable Impact
"We accelerated through our transition with Agile Velocity's help. The Path to Agility was crucial to our journey because it focused on outcomes, strengthened our capabilities, and became an integral part of our improvement mindset."
"We had happy customers and good software with traditional development. It helped us have a competitive edge in the insurance market, but we can only take it so far. We had squeezed all the improvements and productivity increases that we could get out of the way we used to work."
"There's collaboration happening at a whole new scale here. It's exciting to see the Business Process Owners collaborating with each other as opposed to being only focused on their vertical. They used to ask 'what's best for underwriting?' Now the question they ask is 'what's best for Texas Mutual and our customers.'"
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