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OCR for page 135
Control Through
Persuasion
Allan Z. Loren*
President John F. Kennedy toIcI the story of the leader in the
French Revolution who said, "There go my people. I must find out
where they are going so I can lead them. " This story suggests how
CIGNA developed its approach for managing the proliferation of
computer technology. It is an approach I call "control through
persuasion."
Perhaps the main reason this approach has worked so well is
that it grew out of the particular character of our organization.
CIGNA is both an old company and a new company. Formed by
the largest merger in the financial services industry, CIGNA is a
blending of the oIc} Insurance Company of North America (or
INA) ant! the old Connecticut General. It is a cliversified financial
services organization with over 40,000 people worldwide, $35 bil-
lion in assets, 1983 revenues of $12.5 billion, and an after-tax in-
come of $400 million.
CIGNA's Employee Life and Health Benefits Division is the
nation's sixth largest provider of group insurance products,
which include life, meclical, and dental insurance. We are among
the largest providers of property and casualty insurance and risk
*Allen Z. Loren is senior vice-president of CIGNA's Systems Division, Philadelphia,
Pennsylvania.
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MANAGING MICROCOMPUTERS
management services in the world. We have international opera-
tions in 147 countries and the largest investor-owned health main-
tenance organization in the country.
Ranked as one of the nation's top 10 managers of private pen-
sion funds, CIGNA's Employee Retirement and Savings Benefit
Division provides a wide range of group annuity products and
services and diversified investment vehicles for pension, profit-
sharing, and employee-paid investment and savings programs. In
addition, CIGNA's Investment Group provides a variety of in-
vestment and portfolio management services and is among the
nation's top asset management organizations.
As a result of these different operations CIGNA is a melding of
distinct and different cultures. Even before the merger, however,
the cultures of the predecessor companies were very diverse.
Some areas have a centralizer! vertical management; others have
a more bottom-up management style. Different styles are inter-
mingled among the various operations.
Several years ago we became aware of a couple of trends related
to technology and to our "customers," that is, our agents and
other employees. First, technology was becoming less expensive,
more plentiful, ant! more widely available. Second, a new type of
employee/customer was beginning to emerge, younger than aver-
age, highly educated, ant! accustomed to a wide variety of auto-
mation capabilities. These new types began populating CIGNA
in all of the company's support functions, including marketing,
financial analysis, actuarial, and accounting. We conclucled that
to control and manage the upcoming "technology explosion" and
at the same time satisfy the needs of this new employee/customer
group, we needed to let customers experiment with technology.
Enforcing firm central control and policy would not be possible or
desirable given the diverse cultural environment ant! manage-
ment styles characteristic of CIGNA. At the same time, of course,
we didn't want to abdicate responsibility. The philosophy we
came up with for managing technology might be described as
"planting the seeds ant! letting the flowers bloom."
To complement this philosophy we established an En(l-User
Support Group in 1975. This group, comprised of people with a
marketing orientation, circulated within the corporation to get
close to our new customers and to learn what their needs were.
More importantly, this group worked to facilitate the use of tech
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CONTROL THROUGH PERSUASION
137
nology within the customer community. In effect, they became
part of the customer environment.
At the same time large central applications groups within the
company were also dealing with this new customer. The support
group established close ties with these applications groups and
with senior systems management. The close contact among all
these groups enabled us to monitor what was occurring and to
suggest the most appropriate technology solutions to our cus-
tomers' problems. To a large extent the support group is really a
controlled distribution force, but it doesn't appear so. Its job is to
channel our customers' requirements into the mainstream of
technology.
The first technical challenge the support group identified was
the growth of timesharing. The new customers hacT already
started going outside to get their computational needs satisfied.
We facilitated and encouraged this. We also watched what was
happening, and guided the customer to certain preferred vendors
and applications. Then, when we understood what our customers'
real needs were, we created a solution an internal timesharing
system that we call QUEST I. The support group took this inter-
nal timesharing system and "sold" it to the customers who had
been buying outside timesharing services. There were several ad-
vantages to our in-house system. First, our timesharing service
was more competitively priced than those outside. Second, we
tract easier access to corporate databases. Third, we provided bet-
ter service. In effect, we went into competition with external
timesharing organizations and we were very successful.
I must emphasize that we did not mandate the use of this inter-
nal timesharing service. However, it was priced and packaged in
such a way that customers could not justify going outside and
spending more money for the same service. This Milton Fried-
man-like "free marketplace" philosophy worked quite effectively
and as a result most of the outside timesharing was eventually
internalized. Some outside databases were being usecT, however,
which we could not internalize. In these cases, processing with
outside vendors continued. About four years after we introduced
QUEST I we came out with a new product called QUEST II. It
has enhanced graphics and language capabilities, offers more
software packages, has increased file-hanclling capabilities, and
overall, provides more functions.
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MANAGING MICROCOMPUTERS
When word processing became the "new" technology, we pro-
vicled our customers with direction by selecting three vendors
with whom we would do business. Through consultation and
training we channeled these vendor services to our employee/
customer.
As a result of the experiences with timesharing networks and
word processing systems an interesting situation developed. The
support group was able to build a strong relationship with its cus-
tomer. The group was accepted into the new customer's organiza-
tion ant! was considered part of the customer's team. As new tech-
nology emerged these customers turned to the support group for
advice and consultation.
In addition to forming close ties with the customer community,
the support group also maintained its strong links with the appli-
cations groups and was able to provide these groups with insight
into changing customer requirements.
In the late 1970s and early 1980s, when personal computers
started to become popular, we made available to customers on a
casual basis demonstrations of hardware and software and pro-
vided people to answer questions. This approach evolved into
what we now call our "information centers."
More recently, we established formal Information Centers in a
half-clozen locations. These centers were created to provide cus-
tomers with a central place to get information, demonstrations,
guidance, and training on CIGNA's latest technology. Through
the centers we were able to channel people in the right direction.
In essence, the information centers served as magnets to draw
and direct our customers.
This approach was quite successful. We found that many of our
customers wanted help, particularly with the proliferation of
hardware and software that is being offered. The Information
Centers and our encI-user support group, with their very close cus-
tomer working relationships, were able to produce a set of "tech-
nology handcuffs." The customer had become dependent on the
group and the centers for guidance on technology. From our
standpoint this was an ideal relationship because we were able to
point the customer in the direction we wanted to go.
As the 1980s roller! around there was a terrific explosion in mi-
crocomputers. At CIGNA we experienced some of the effects of
this explosion. The Information Centers, which were well struc-
turect by this time, served as real magnets for microcomputer
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CONTROL THROUGH PERSUASION
139
users. In fact, the centers became overwhelmecI by the number of
customers using their services. To deal with this situation, we
went from an informal, casual environment to a more structured,
institutional one.
We also began to enhance our level of support. We required us-
ers of microcomputers to participate in formal training programs
on hardware and software. A newsletter was created to cTissemi-
nate the latest information on microcomputers. An "approver!
product" catalogue was developed to aid customers in ordering.
Because our customers were demanding direction, we began to
issue more standards and became more involved in evaluating
products and services. We continued to keep the communication
lines open in order to improve our ability to control and channel
the uses of this technology.
Today the sheer variety of outsicle software available to our cus-
tomers is a source of confusion and therefore has become an area
of considerable concern for us. To acIdress this concern we plan to
establish a software library. We will lencI out software that we
find acceptable ant! provide demonstrations of both "approved"
and "unapproved" software in orcler to show the contrast. To set
up this library we will need to arrange for national contracts on
software, thus reducing costs and avoiding multiple clistribu-
tions. We believe the library will save money and help recluce the
confusion caused by the proliferation of software. We are also con-
sidering developing generic software to run on our personal com-
puters and mainframe. We are finding that much of the software
being acquired is used for fairly similar functions and we think we
could provide internally written software that accomplishes these
same functions.
Another support-related enhancement we are considering is the
extension of the information center concept to include a computer
store. At present, orclers are placed with outside vendors who pro-
cess them and cleliver the software and hardware. Our strategy is
to internalize this service by having our customers order directly
through an Information Center Computer Store. A centralized
procurement activity will not only be convenient for our cus-
tomers but will allow us to control inventory, offer standard! ser-
vices, and keep a handle on our customers' needs.
In adclition, the store will improve our visibility in the customer
community, provide us with more information on maintenance
and performance of equipment, and help us to know our customers'
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MANAGING MICROCOMPUTERS
upgrading needs. The store win also give us and our customers galore
opportunities to exchange information on applications.
To summarize, the technique CIGNA has user! to control prolif-
eration includes having a "friendly" and "forgiving" End-User
Support Group whose job was to serve as objective advisor and
work closely with customers. Support-group members were able
to subtly channel customers in the direction we wanted. Today
they continue to provide and enhance support through two-way
communications, thereby enabling us both to maintain control
and to satisfy our customers' requirements.
Representative terms from entire chapter:
internal timesharing
