For over half a century, Progressive Insurance has maintained a youthful and innovative approach within the traditional insurance industry. However, as the organization has grown to employ over 60,000 people, maintaining this innovative edge has become increasingly challenging. To address this, the company engaged in a long-term initiative to develop a cohesive corporate innovation function that would enhance its capabilities. The lessons learned from this transformation can serve as valuable insights for other enterprises striving for innovation in their practices.
Initially, Progressive’s attempts to foster innovation were fragmented and scattered across various initiatives. The Business Innovation Garage (BIG), launched in 2012, acted as a “big idea box” that invited employees to propose new concepts. It provided a supportive space for experimentation and prototyping, allowing employees to explore new technologies and solutions without the immediate pressure of market release. Simultaneously, the Edison initiative encouraged crowdsourcing ideas from employees to solve company challenges, while the Action Factory adopted a structured design thinking approach. Each of these programs had its distinct goals but lacked a unified framework to synthesize their efforts and potential synergies.
Recognizing the need for a cohesive strategy, Progressive’s leadership decided to integrate these separate initiatives under the newly formed Innovation Services team. This consolidation was not merely administrative; it marked a significant shift in the company’s view of innovation. Rather than being reactive and isolated, the team evolved into a proactive consultancy within the organization, guiding departments on how to innovate and implement solutions collaboratively. This transformation underscored a critical mindset shift, reframing the innovation narrative from a demand-driven approach to one focused on joint exploration of possibilities.
One of the significant challenges for Progressive’s Innovation Services team was establishing concrete metrics for success in innovation, which often has intangible outcomes. Initially reliant on anecdotal measures such as engagement in workshops, the team gradually transitioned to more robust performance indicators, including Net Promoter Scores (NPS) and the number of repeat engagements. The emphasis on training employees in design thinking and storytelling became crucial, enabling staff across the organization to foster a more innovative culture. Collaborative partnerships with universities also provided fresh perspectives and helped gauge the effectiveness of their initiatives, blending academic insights with practical application.
Today, Progressive’s Innovation Services operates with three main pillars: exploring emerging technologies, fostering partnerships, and promoting design thinking practices. By experimenting with new technologies like virtual reality and artificial intelligence, the team ensures that Progressive remains at the cutting edge of industry advancements. These experiments are complemented by strategic partnerships, both internally across departments and externally with universities, to stay informed about best practices and emerging trends. The focus on design thinking pervades the company culture, equipping employees with creative problem-solving skills necessary for dynamic markets.
Looking ahead, Progressive’s innovation journey yields essential lessons, such as the necessity to clearly define innovation for employees, which simplifies participation and encourages experimentation. The company acknowledges the limitations of innovation initiatives in the absence of supportive pathways for incubation, which led to the establishment of Level20, an incubator for new products and services. With successful ventures like Progressive Life Insurance emerging from this incubator, the company exemplifies how structured innovation can result in significant advancements. By fostering a flexible yet systematic innovation ecosystem, Progressive demonstrates that careful nurturing of innovation can lead to sustained growth and adaptability in a traditionally conservative industry.
