I’ve been thinking a lot recently about the concept of “high reliability” and what it looks like in practice within an insurance agency.  I’ve concluded that “high reliability” is really the framework on which everything else in an agency depends.

I was introduced to the concept of an HRO (a “High Reliability Organization”) when my son joined the Navy and was deployed on a United States Aircraft Carrier – the poster child of the highly reliable organization.  I learned from my son how this organization consistently produced reliable results in the face of seemingly impossible odds, and the more I learned, the more I noticed factors common to all organizations that call themselves “highly reliable.”    

Some factors were obvious and easy to understand.  Things like continuous training, clear roles, well-defined responsibilities, and documented workflows, but those weren’t the ones that stood out to me.  Every agency knows these are important and required, but very few agencies can claim to be “highly reliable.”  You might think it’s because these ideas aren’t implemented well within the agency, but it turns out that there are two factors deeper down in the psychology of an organization that affect all of these. These two factors are instrumental in taking a good organization and making it an HRO.  

The first of these is hard to quantify but essential for any organization to operate reliably, and that is Organizational Identity.  

As it turns out, for an organization to operate reliably, ALL members of that organization must embrace the idea that they are part of a highly reliable organization.  Every person on a US Aircraft Carrier knows before they even step onto the ship for the first time that no matter what, no matter how hard things get, and no matter what the challenges, failure is not an option.   

That is where they start, and everything grows from that idea. This common belief overrules all and affects everything everyone on the ship does, even those who are taking a wire brush to the deck.  They may not sense the importance of their role, but every person knows they are part of an organization that just cannot allow failure, and this bonds them together.   

But what happens when mistakes do creep in, as they always do?  That is where the second factor comes into play: Near Miss Analysis.  

The fact is that humans are, well, human, and that means they make mistakes.  It isn’t the presence or lack of mistakes that separates an HRO from everyone else, but what they do with them.  Most organizations only pay attention to the failures.  HRO’s, however, embrace the fact that mistakes happen and pay close attention to “near failures.”  Something bad didn’t happen, but it almost did. They ask “What can we learn from that?” and “How can we change our processes to catch that earlier?”   

As it turns out, this Near Miss Analysis is where most of the processes of the organization get updated and continuously refined.  And without it, there would almost certainly be regular failures.  Insurance Agencies rarely, if ever, do this.  They whistle past “near misses” like they’re walking past a graveyard at midnight,  hoping it never happens again, which of course it always does.    

So how does this apply to an insurance agency?   

Well, it seems to me that the same factors are directly applicable.  Agencies don’t just write and service policies for clients.  They write and service policies that their clients expect to be done correctly, on time, and within the cost quoted to them and serviced in a timely manner.  Writing and servicing policies poorly is easy.  Writing and servicing accurate policies that perform as the client expects when the time comes, not so much.   

To do this well, the agency needs the same two things:  A shared identity of reliability and a willingness to evaluate “near-misses” with an eye for improvement.  Only through this can any of the other great ideas of an agency succeed.    

Disclosure:  No AI was used in the writing of this article