Edition

Barriers to Innovation

Background and Purpose

Innovation is known to be challenging.  It creates discomfort for others used to the current way of doing business, and there is always the risk of failure.  Innovation is a type of change and change is difficult for companies to manage.  Reacting to pandemics or new regulations requires a lot of effort, but the need is clear and urgent.  How do you muster the effort to tackle an optional change that holds the promise of future benefits and current sacrifice? 

The prior project looked at how to foster or encourage innovation (https://www.soa.org/resources/research-reports/2023/fostering-innovation/).  This project proposes to focus on barriers to innovation.  Here, we want to examine the specific challenges that the practitioner will face in the process of completing a successful innovation. 

In addition, we want to gather practical methods that have been used to overcome them.

Numerous publications exist on this topic, but this project focuses on the application of the tactics to the insurance and pension industries.

The Actuarial Innovation & Technology Steering Committee (AITSC) is interested in exploring the variety of barriers faced during an innovation project.  Specific examples of problems and solutions are sought to support the general findings.  The goal is to focus on actual experience rather than theoretical concepts in the development of the work.  Specific methods that did not work are sought as well. 

The AITSC encourages researchers to respond to this RFP even if their bid does not perfectly match the purpose above.  The AITSC is eager to work with researchers on a mutually agreed scope of research

Minimum Range to be Considered

One goal of the research is to identify ways that innovation can be blocked.  However, the AITSC wants to consider the following topics in the process in addition to others identified by the research.  

  1. Motivation – This can be external or internal.  External motivation can be a threat to the current business or an opportunity to enhance the business.  Internal motivation can be to improve the operation or seize an opportunity.  What is a sufficient reason to spend the resources and endure the change required?   
  2. Sponsorship – How important is it to have the support of a leader with sufficient authority to sustain a given project?  This includes resources, but also protection from those who would prefer to see the project terminated to recover the resources or avoid the required change.  Initial funding and managing overruns of that given project are both important examples of when sponsorship counts. 
  3. Immediate reaction - An idea needs initial buy-in before it can become a project. What skillsets enable early discussions that foster enough understanding and enthusiasm to gain a project sponsor? What do potential sponsors need to reach the conclusion that an idea is worth enough resources to become a project, or worth enough to keep listening?
  4. Project management – There is a need for the skills to run the project and get the desired results.  Speed, decision making, and alignment all rest in this process.  How important is this skillset to success?
  5. Core team – This is the group that will drive the project.  They need to have enough of their time dedicated to the project to coordinate the work and do their share of the work.  How important is their leadership to project success?
  6. Communication – This might be interesting to probe the benefits of working without interference versus being transparent.  The level of hostility might be an important factor.  Some innovation has been moved completely offsite for this reason. 
  7. Domain knowledge – What does the group need to include to be in a position to create an innovative solution?  How does this vary across problem types? 
  8. Implementation – How does the project move from solution to reality?  What can interfere with this final step in the process?  How do you manage the required change within the organization? 

Proposal

To facilitate the evaluation of proposals, the following information should be submitted: 

  1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
  2. An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
  3. A description of the expected deliverables and any supporting data, tools or other resources.
  4. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.

    As a guide for developing the project budget, please review the Historical Project Cost Guide (see Appendix)
  5. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The PSC is interested in completing this project in a timely manner.  Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  6. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

Selection Process

The AITPSC will appoint a Project Oversight Group (POG) to oversee the project. The AITPSC is responsible for recommending the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the AITPSC or POG will make the final recommendation, subject to SOA leadership approval. SOA will provide staff actuarial support to develop and publish the final material.  

Questions

Any questions regarding this RFP should be directed to David Schraub, SOA Senior Research Actuary (email:  dschraub@soa.org) 

Notification of Intent to Submit Proposal

If you intend to submit a proposal, please e-mail written notification by May 6, 2023 to Korrel Crawford (kcrawford@soa.org). 

Submission of Proposal

Final proposals for the project should be sent via e-mail by May 19, 2023, to Korrel Crawford (kcrawford@soa.org). 

Note: Proposals are considered confidential and proprietary. 

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries and the researcher. 

The SOA and AITPSC reserve the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The SOA and AITPSC also reserve the right to redirect the project as is deemed advisable. 

The SOA and AITPSC plan to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s). 

The SOA and AITPSC may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the SOA and AITPSC in publicizing or promoting the research and responding to media requests. 

The SOA and AITPSC may also choose to market and promote the research to members, candidates and other interested parties. You agree to perform promotional communication requested by the SOA and AITPSC, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.

Appendix

The cost ranges below are intended as a guide for budgeting project costs for proposals in response to SOA Research Institute Request for Proposals (RFP). Please note these figures span the 33rd to 66th percentiles for all projects as well as projects that involve a specific approach (lit review, survey, etc.). They are based on historical costs over several recent years. Expected costs for some RFPs may fall outside these ranges depending on the nature of the work and resources required for completion.

All Contracted Projects

This category includes all contracted projects that the Institute has undertaken within the last several years.
The 33rd-66th percentile project cost range is $25,000 - $50,000.

Literature Reviews

This category includes projects that involved only a literature review or the cost for the portion of a larger project that included a literature review.
The 33rd-66th percentile project cost range is $15,000 - $20,000.

Surveys

This category includes all projects that had a survey as their primary component.
The 33rd-66th percentile project cost range is $28,000 - $55,000.