MetLife Centers Its Strategy on Digital Transformation

According to the Pew Research Center, in 2016, millennials overtook baby boomers as the biggest generation in terms of population in the United States — and the number of millennials in the labor force (53 million as of 2014) is expected to grow to 80 million in 2020. This demographic change is affecting how companies do business, says MetLife’s Marty Lippert, executive vice president of global technology and operations.

MIT Sloan Management Review guest editor Gerald C. Kane spoke with Lippert about how his company is managing its digital transformation.

MIT Sloan Management Review: How did MetLife decide it needed to transform digitally and how that effort would be led?

Lippert: Last year, millennials overtook the baby boomers as the biggest generation in terms of population in the United States. And the number of millennials in the labor force is expected to grow. There were 53 million millennials in 2014, and there are expected to be approximately 80 million millennials in the workforce in 2020. People in this demographic have grown up accessing services and information in a certain way, and it’s critical for us to be positioned to service this group. They are going to become the largest part of our customer base over the next several years.

At the same time, technology continues to evolve. Connected devices including wearables are expected to increase from 123 million in 2016 to 411 million by [the] end of 2020 globally. And examples of companies starting down the path of intelligent underwriting are everywhere.

These trends are having an impact on every industry. One of the underlying messages here and that you read in the news is that every company is moving toward becoming a technology company.

MetLife knew it had to structure itself to respond to these macroeconomic trends so we recently brought on board a chief digital officer.

How is MetLife approaching digital transformation?

Lippert: We have four pillars that make up MetLife’s strategy. The first is optimizing value and risk. The second is delivering the right solutions for the right customers. Third is strengthening our distribution advantage, and fourth is driving operational excellence.

Sitting in the middle of those four pillars is digital; it’s what brings those four together. It’s sitting at the core of our corporate strategy. We want our employees to be executing those four pillars with a digital mindset, to make MetLife as efficient and effective as it can be for our customers.

How do you get employees to develop this digital mindset?

Lippert: I try to drive the organization to be externally oriented, and we do so by looking through four lenses — the first is with respect to the venture capital community, the second to startups, the third technology companies, and the fourth is the academic and university community. The exposure to these four lenses has been a great enabler for getting people to think differently about digital, which then prompts the shift in culture.

In terms of the VC [venture capital] and startup lenses, we routinely invest into general VC funds as well as look at their portfolio companies to determine if we’d like to invest directly in any of the startups included in the portfolios. We also undertake first-mover initiatives with many enterprise technology companies like Cisco, IBM, and Oracle to help drive internal opportunities as well as opportunities to better our customer experience. MetLife has also formed great relationships with universities over the years; for example, we’re working on speech analytics with Carnegie Mellon, we’re advising on the graduate program design at the University of North Carolina at Chapel Hill, and we’re hoping to reestablish a relationship we’ve had in the past with MIT Center for Information Systems Research.

All of these are ways for us to expose the company and our employees to sources of innovation. We’ve also been proactive about taking our executive group members and our CEO out to Silicon Valley to ensure the company is aware of what is going on in the tech world. We also hold an annual event called Ignition, which brings 15 to 20 portfolio companies from VCs to our global campus to speak to our employees from throughout the company. This event broadens our perspectives and gets people to start thinking differently.

What sort of time horizon do you consider when planning digital strategy?

Lippert: When we think about digital, we approach it from three horizons. Horizon one would be initiatives that bring near-term value to the organization by establishing minimum standards that put our customers first. Things in this horizon, for example, could be providing our customers the ability to interact more digitally instead of via the call center or other, more traditional interfaces.

Horizon two would be where we look to differentiate ourselves in the marketplace. So, for example, when McKinsey assessed our work on the global sales platform project in Japan, they confirmed that it is a best-in-class solution that is unique in the industry. That, in turn, differentiates and provides MetLife a competitive advantage in the market. We’ve placed a lot of emphasis on being able to provide the most unique and effective solutions, and digital has been a big part of that.

Horizon three is a solution or program we implement that disrupts the market. This is where we look to the venture capital and startup community to help us to envision things that are different and that could provide that disruption.

By looking at digital innovation across those three horizons and by targeting investment in each of those horizons, we’re able to be forward looking, and we’ve been driving a lot of value from that.

Are there particular benefits or challenges to approaching digital transformation globally?

Lippert: One of the primary advantages of doing this from a global perspective is it gives you a considerable opportunity to leverage scale. What we generally find is that when we build a global solution, generally between 70% and 80% of that solution ends up being reusable. There are some things like regulatory requirements and privacy laws that are specific to a particular geography, but we usually have the opportunity to scale a majority of our solution with considerable speed.

On the talent side, being global also gives us the ability to leverage resources we have in different parts of the globe on a single project. For example, the global sales platform that was launched in Japan drew on talent from Dublin, Raleigh, Tokyo, New York City, and Buenos Aires. These global assets bring good and oftentimes scarce talent to a project while also giving our talent the opportunity to work on interesting projects, aiding our ability to retain that talent.

We have also taken a lot of steps to attract young talent and to give them the opportunity to develop while they’re here. For example, we have a five-month training program called MetLife Technical University that educates roughly 60 to 70 graduates a year on many different disciplines within insurance with a focus on technology and digital. Graduates of the program can then get deployed anywhere across our network.

Has this journey, in terms of transforming MetLife digitally, changed the way you look at what you expect from your leaders and how you develop leaders for MetLife within the organization?

Lippert: Yes, without question. One of the top criteria for us today is looking at — and looking for — people who have the skill sets to work cross-functionally across the organization.

I think one of the other things that we hire for is people who have an external mindset; folks who aren’t just focused on what’s going on inside the company, but recognize that most of our learning is going to come from outside of the company.

We also try to hire people who have worked outside of the insurance industry to infuse their perspectives into the organization.