Progressive crowdsources its way to business, IT innovation

Progressive crowdsources its way to business, IT innovation

Progressive’s Edison program includes startup-like pitch contests, hackathons and expositions to showcase innovation spawned by business and IT collaboration.

What started as an informal initiative to allow Progressive employees to propose ideas for new insurance tools and services has blossomed into a full-fledged program that spurs innovation. The crowdsourcing process, called Edison, now includes a Shark Tank-like voting process, hackathons and an expo in which employees showcase their creations.

Erin Baginski, Progressive IT director.

Erin Baginski, Progressive IT director.

Progressive employees “came together and started using their skill sets to focus on making these ideas better," says Erin Baginski, a Progressive IT director who accelerated the project’s growth after taking the reins as process leader last year. "It is amazing to watch."

Edison's evolution comes as digital technologies are becoming the crucible for solving business challenges that may drive competitive advantages. New IDC data shows that two-thirds of CEOs plan to focus on digital transformation strategies for 2016, forcing business line leaders to rely on cross-functional partnerships to foster a culture of innovation. Companies such as Progressive are building formal programs to conceive mobile applications, analytics, Internet of Things concepts and other tools to buttress the business.

How Edison helps IT

Progressive, whose Snapshot program helped put data-driven driving services on the map, launched Edison in 2010 as a crowdsourcing project that solicits new ideas from the $18 billion company's 26,000 employees.

[ Related: 7 big threats to innovation and how to overcome them ]

In its original incarnation, Edison solicited bids for two or three challenges addressing business concerns in its claims and commercial lines. But once a winner was selected, Edison's job was done. The idea sponsor would enlist help from colleagues in IT and other relevant departments to advance the idea from concept to prototype to production. Some ideas were implemented, while others fell through the cracks.

Baginski, noting that it's tough to be "innovative without leaving out such a critical component as IT," says she doesn’t want to see potentially important ideas go by the wayside. She decided Edison would be better served by helping ideas get into production much more rapidly and court participation from across the company. One way to do this is to unify the company with a broad, singular challenge encouraging employees to submit all manner of ideas. Progressive's senior executives, including CIO Ray Voelker, agreed.

Edison ideas run through the Shark Tank

Under Edison’s new construct Progressive CEO Glenn Renwick introduced a single challenge to all employees: "How do we become consumers' No. 1 choice for all of their insurance needs?" Employees submitted 217 ideas via a digital ideation application, where employees voted up the ones they preferred.

[ Related: Why companies opt to insource for IT innovation ]

The vote winnowed down options to 78. In April, a group of senior-level managers reviewed and reduced the ideas to 19. The idea founders and their teams then spent the next two months fleshing out their ideas before presenting them in June to the executive team in a contest modeled after the popular ABC "Shark Tank" show, in which entrepreneurs pitch ideas to seasoned business executives.

The 19 ideas were reduced to 10, including digital capabilities that would allow Progressive customers to donate their insurance savings to charities. Other services are geared toward driver safety, including features intended for smartphones that provide tutorials on optimal motor vehicle operations, as well as alternate routes that enable drivers to avoid delays caused by accidents. Another potential service uses analytics software to help customers select the right insurance products.

In July, these ideas proceeded into the Business Innovation Garage (BIG), where insurance services are prototyped and developed before they are ushered to market. In BIG, five IT "mechanics" used public cloud software and other tools to help teams prototype their products.

Progressive in late August and September held two code jams, essentially hackathons where Edison idea teams and volunteer “jammers” worked on their ideas. And in October, the company hosted an exposition at the company's Mayfield Village, Ohio, headquarters, where teams of the top 10 ideas showed senior executives and rank-and-file employees their work from booths, and in motor vehicles. The expo allowed execs and employees see what can happen when "employees get cross-functional teams together and use IT services to prototype these ideas."

[ Related: Retail CIOs must balance security with innovation ]

Members of the executive team assigned business leaders to two out of the 10 ideas, though Baginski declined to specify which two received the green light. But, she says, Edison will work with the business leaders to track those projects and make sure they get to market. The other eight ideas won't be discarded; some of them may be incorporated into other strategic plans in the future.

“I’ve tried to pull all of it together into an innovation services program and that’s really where we’re headed and what we’re focused on,” Baginski says.

She says she hopes the efforts progress through Edison, which has already enjoyed some success: Mobile device management software to enhance employees’ productivity via smartphones and insurance coverage for classic cars both developed under the aegis of Edison.

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