Three Steps To Enabling The Hidden Power Of ‘Mutual’ In Any Business

Contributors: Maria Ferrante-Schepis, Lauren Schwartz
Article also published on

Mutually Minded

Innovators Can Learn A Lot From The Insurance Industry

We’re still in the early stages of transitioning into an evermore collaborative, hyper-connected world. With innovation titans driving a reality where Google Glass streams information directly into our line of sight, Facebook connects us to an ever-present social scene, and every daily need can be solved with an app download, it’s easy to dismiss long-standing industries like insurance as archaic and out of touch. However, while this may sound counterintuitive, we’d like to illuminate something inherent in the DNA of many insurance companies that we believe contains fundamental parallels to successful innovation initiatives: the “mutual” company, mind, body, heart and soul.

When you consider the use of the word “mutual” in the context of insurance, its origins are less about the corporate form (i.e., mutual versus stock company) and more about the nature of how risk is shared among many people. That’s what makes insurance work. It’s about the idea of mutual interests, mutual things in common and mutual agreement that protecting something is more efficiently done with groups of people versus alone. This is something that every insurance company and product has in common.

Peer-To-Peer (P2P) Models Will More Effectively Meet The Rise Of The Prosumer

You don’t need to be an insurance company to leverage the underlying principles of customer-centric decision-making and shared access, what we’re calling “mutuality” or being mutually minded. In fact, as we experience an unprecedented shift toward a sharing economy of collaborative consumption and P2P services, we believe companies should embrace the idea of being more mutually minded as the key to thriving instead of surviving.

A recent Fast Company article by Ana Andjelic, How Brands Can Win At The Sharing Economy, discusses that Forbes, The Economist and Mary Meeker all expect big things from the emerging sharing economy. Andjelic writes, “Some predict that the collaborative economy is potentially a $110 billion market. Uber alone is valued at $3.3 billion.”

At the center of the sharing economy are prosumers, a growing segment of customers interested in sharing and making products and services. P2P online platforms that are now allowing prosumers to crowdfund start-ups enroll in free Massive Open Online Courses (MOOC) and share access to things like their skills, cars and even homes. Prosumers are also demanding more input into the design of products and services, leading to a growing number of mass-customized product lines, such as Nike’s custom shoe line NIKEiD. In this new collaborative paradigm, social capital is as valuable as financial capital—access beats ownership, sustainability trumps consumerism and cooperation ousts competition.

The Transition To Be More “Mutual” Will Be Irreversible

You may find yourself wondering if these trends are really here to stay or if they’re just a generational fad. While Generation Y has in large part driven the rise of mutuality and collaborative consumption, companies embracing these trends are experiencing market adoption across all generations. The reality is, we are just rounding first base; in our lifetime and our children’s lifetime, this transition will be irreversible and the impact of these trends will only increase in impact.

Consider what New York Times best-selling author Jeremy Rifkin outlines in his book The Zero Marginal Cost Society. According to Rifkin, a new hybrid model—part capitalist and part collaborative commons—is eclipsing capitalism as we know it. Similar to the Conscious Capitalism movement, the goal is to be more deliberate about creating a more generative win-win-win scenario with all stakeholders in the ecosystem. Rifkin argues that the existence of traditional capitalism (with its stereotypical win-lose scenarios) depends on businesses competing to reduce the price of their goods and services, allowing them to win customers and market share. What no one anticipated was that a technological revolution would drive the cost of producing an additional product or service to almost zero. With the departure of marginal cost as a market force, products and services are now being offered for free (or nearly free) and are becoming more abundant than ever before. Where “exchange value” mattered to capitalism, “sharable value” is gaining precedence in a paradigm shift toward collaborative consumption and mutuality.

This momentum will continue to contribute to dramatically reconfiguring vertical value chains into horizontal ones. Any residual corporate delay, hesitation or resistance to anticipate and shift (observed as preservation of the status quo, channel conflict avoidance or “wait it out” strategies at the expense of the customer and community at large) will almost assuredly result in unnecessary suffering and permanent damage = lose-lose-lose scenario.

So what are the steps to enabling the power of “mutual” in your business?

1. To Be More “Mutual,”  Find Where YOUR Product Or Service Has Sharing Potential

What we find particularly interesting is that the idea of sharing something versus owning the whole is not new. Being “mutual” is deeply rooted in the DNA of every insurance company, irrespective of whether the company is actually a mutual one. The industry itself was created to serve a shared social need that was solved by “passing the hat.”

Watch Maria’s mutual “money box” video here.


For example, Nationwide’s origin story started with the farming community. In his biography Vice President in Charge of Revolution, Murray Lincoln, one of Nationwide’s earliest presidents, describes his realization that farmers could not afford to purchase expensive farming equipment individually. Lincoln challenged the sacred cows of the existing model and helped farmers pool their money together to collectively pay for this type of equipment to better serve more of the farming community stakeholders. Their insurance offering actually came later but was just another natural outgrowth from the idea that sharing resources was better than going at it alone.

Fast forward 100 years and this same concept is echoed in today’s P2P sharing economy. With the rise of social networking platforms, it’s far more common for social relations to provide direct access to desired resources, funding and skills.

Over the many years since the birth of insurance, however, policyholders have stopped associating the purchase of insurance with community connectedness and shared access. The revival of mutuality via the sharing economy is therefore a huge opportunity for insurance companies (all companies for that matter) that now face the challenge of making their member communities transparent and valuable in new ways.

Today, the intelligent design of whose hands are in the hat, and in what order, are proving to be the determining factor of whether you have a successful business model or a sickly one…and this learning applies far beyond the insurance category.

2. To Find The Sharing Potential,  Start By REALLY Knowing Your Customer And Where The Future Will Take Them

Don’t make the mistake of designing yourself into the past; look to the future. Leveraging these trends, regardless of what industry you’re in, has to start with the voice of your customer. While many companies start with an exciting idea and then try to find the customers who want it, this is not a recipe for successful innovation. Instead, it’s imperative to start with an understanding of who you’re designing for and what your customers’ needs and frustrations are before you begin the product development process. Additionally, do not be threatened by the idea that if your customers could “share” your product or service, it will mean reduced revenue for your company and therefore you should look to prevent it. If it can be shared, it will be…with or without you. It’s up to YOU to find the model that makes it easy, scalable, efficient, etc.

The companies that are winning in the face of these trends are the ones investing in understanding their customers and in maintaining company cultures that support ongoing innovation in service of rapidly changing customer needs. They are the ones who can accept a different paradigm for how their company actually creates and receives value. Revenues, yes. Other currencies, like data exchange, social currency and access to resources…an even bigger YES!

3. To Really Know Your Customer Future, Start By Being An Innovation Project Yourself

While it’s no easy task to transform a company’s culture into one that really understands not only the customer of today but the customer of tomorrow, the return on investment is tremendous when done successfully. Very few investments have the power to transform an organization the way an investment focused on exponentially improving customer knowledge does. The winning companies know that you can’t give to your customers what you don’t have to give yourself (e.g., empathy, understanding, generosity, transparency). The desired outcome often requires companywide shifts in language, beliefs, behaviors, structures, incentives, processes, relationships and experiences.

Evidence of tangible benefit from this can be seen in Forrester’s 2014 Customer Experience Index (CXi), which benchmarks the quality of customer experience (as rated by each company’s own customers) for 175 large U.S. brands across 14 industries, including retailers, hotels, banks, credit card providers, insurance firms, airlines, wireless service providers and investment firms. What you will find particularly noteworthy is that in the insurance category, the insurers that made significant investments in customer experience and culture of innovation initiatives gained jaw-dropping increases in their rankings from last year to this year, surpassing all other industry increases. We believe this positions these companies to win with the future customer because they have unraveled the disconnects with the present customer, positioning themselves to make the continual changes to remain relevant in a rapidly changing world.

Are You Mutually Minded Enough To Thrive In The Future?

The question leaders are unavoidably confronted with is—as we all watch the “dinosaurs” of the insurance industry convincingly overcome their addiction to the status quo and transform themselves enough to rise like butterflies from the tar pits with purpose, profits and “place” in our new economy (by wholeheartedly committing to put their customers’ needs first)—if they can make the shift, what’s stopping me?

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