How to instill a data mindset throughout your organization – Aegon’s journey to become a data-driven organization
True change requires buy-in across the entire organization. One of the biggest changes that all businesses must make, is to become more “datafied”, as data has become the lifeblood of any successful business. A key success factor in ensuring that data is used effectively is instilling a data mindset throughout the organization. We sat down with Hiek van der Scheer, Chief Data and Analytics officer at Aegon, to find out more about Aegon’s journey to instill a data mindset at this multinational company.
Hiek, it’s great to have you here with us to talk about what’s involved in becoming a data-driven organization – and your learnings from doing this at Aegon. What are the most important elements from your perspective?
It’s a pleasure to be here and talk you through the journey that Aegon has made to become a data-driven organization. In my opinion there are three things, that are really important in becoming more data-driven as an organization. The first one is that unlocking data is really a journey. Becoming a data driven organization is not something that you can do overnight. It will take a lot of time involving all layers in the organization to really take them through the journey of how you can leverage analytics. The second one is that you should focus relentlessly on impact. It’s all about the impact that you create with analytics – don’t do analytics just for the sake of analytics or data quality for the sake of data quality. Focus on creating value for the organization – in the end this is what really matters, also for management. And the last one: focus on the people and not on the technology. It’s very easy to focus on making sure that you have a data lake in place, that you have the right technology around – but in the end it’s all about the people.
How did you start the journey of becoming a data-driven organization?
Let me start with a quote from McKinsey, which I have used in my organization quite a bit: “If you want to do analytics, you just have to get started.” Normally McKinsey has an answer for everything, they always have a blueprint or roadmap ready. But in this case, they say: if you want to become a data driven organization, just get started. This is what I told my leaders all the time: don’t think about all the elements like governance, the funding, the whole shebang, because before you know it, you’ll spend two years on that discussion and you don’t create value in the meantime.
When I came on board, one of the first things I did was making sure that we could attract talent – and for this purpose we set up the Aegon Analytical Academy, which has a proposition for talent in the organization or outside the organization to join. The three year program was really targeted around hard skills, soft skills, etc., to build the foundation of the analytical organization. The second step was to create a Center of Excellence to make sure that there is a small, central team that is coordinating the efforts around analytics, making sure that we don’t reinvent the wheel, that we have standards and a common way of doing things, while still enabling the local organizations to drive analytics.
What was the role of the Leadership in this whole process?
To ensure Leadership involvement, I started the Analytics for Leaders-program, which really started at the top: the Global Management Board and the Top 100 of Aegon joined a two day program where they learned about “the Art of the Possible”. What is analytics actually about, but also what is your role as a leader, and what do we expect from you to drive that forward? That really boosted a lot of the work in the organization because then it became part of our culture.
Hiek, you also mentioned the relentless focus on creating impact. Can you tell us a bit more on how you approached this?
For me, it starts by simple, interactive dashboarding where you make data available to your organization – what I call curated data, to make sure that there is a single source of truth. You can use Power BI, Tableau, Click View – it doesn’t matter, as long as it’s a dashboard where the organization can play with the data, but making sure that everyone is playing with the same data. The dashboarding is a very good start, because it triggers questions like: Hey, can I have red flags when it goes out of a certain boundary? Or: Can you not only tell me what happened, but can you also do predictions? So you take the organization along on this path towards more advanced analytics. If you want to start driving impact, it’s always important to start with defining very clearly what the opportunity is, or the business challenge that you want to solve. That’s where impact starts. Then think about: what is the metric that you want to improve? Is it revenue, NPS, or risk reduction? And finally: start with the coalition of the willing – leaders and teams that are willing to do this. With these teams you can start showing impact – and that will help convince others.
Can you give us an example?
A nice example where we applied this within Aegon is in the area of fraud detection. As you know, most insurers build fraud models, so that is something we wanted to focus on. Initially the teams, that were doing the claims handling, said: we don’t need those kinds of models – we’ve been handling claims for more than 20 years and we know when something is suspicious; then we send it to our special unit investigators.
We started by using the team’s classification rules to build a very simple model. This enabled us to already change the process: let the model do the work to identify the suspicious cases. Working with the data also helped signal areas for improvement, which then led to adjusting the classification rules. Over time we replaced the linear models by more complicated models – and now we have a very advanced AI model running our fraud models. If I would have done that right at the beginning, no one would have believed it, whereas now we have taken them on the journey and now the fraud handlers are all in. So my advice is: don’t start with the best model right away! Start with a simple model, an MVP that is running like the classification rules. Then you get your organization on board – and based on the feedback you’ll get, you can further improve the model.
Any final thoughts you’d like to share, Hiek?
Yes, I think it’s really important to focus on people and not technology. As I mentioned, we set up the Analytical Academy to focus on training and attracting talent. We’ve made sure to not only create data scientists that are really good in doing their job, but also have a broader perspective, understand the business challenges they can help solve and are well integrated in the business units.
Becoming a truly data-driven organization is really about three things: it’s a journey – take time for it. Focus on impact, because this is why people in the organization will value your teams and your data analytics efforts. And finally: take people along. That’s what eventually will make the difference.
Interested to hear directly from Hiek van der Scheer?
Hiek will be joining us as one of the guest lecturers for the Executive Education Course “Insurance Innovation in the Age of Data”, a joint initiative of ITC DIA and the University of St. Gallen’s Institute of Insurance Economics. Hiek’s lecture will focus on Talent and Culture in the future of insurance, an incredibly important topic for every insurer.
“Insurance Innovation in the Age of Data” is the only online Executive Education course, specifically focused on insurance innovation. The course starts on September 27 and consists of 9 modules; classes are online, 2 hours per week, conveniently scheduled at the end of the workday on Wednesdays.
Are you interested to join this Executive Education Course? Find out more here or e-mail Bertina to request the brochure!
Also, when you register for the course, you will get a free ticket to ITC DIA Europe Munich 2023!