Practice makes perfect

Informal communities have existed within Aon for years, but in 2000 the company decided to implement a more structured approach to community development. By Sarah Adams.

Aon is a world leader in risk management, insurance and reinsurance broking, captive-management and human-capital consulting services. It understands that sharing knowledge is the key to business retention and maximising new opportunities.

As the increasing internationalism of its business has amplified the need for collaboration and knowledge sharing across time and distance simultaneously, Aon has created a global network of industry, product and process specialists in its Global Practice Groups.

While the concept of communities of practice had been bubbling around Aon for years, the real foundations were laid in November 1999, when senior management created a business case for setting up a global network of experts to provide our clients with an integrated and seamless service. The senior-management team identified those areas where they believed that business value could be maximised from investing in knowledge-sharing activities. They selected five industry, two product and two process areas on which to focus initially.

Chosen for their strategic importance to Aon as well as their ability to easily replicate ideas and solutions globally, the nine Global Practice Groups were: Aviation & Aerospace, Financial Institutions, Marine, Natural Resources, Professional Services (all from industry); Property, Trade Credit (from product); and, Affinity, Mergers & Acquisitions (from process).

Green light

The initiative was given the green light in January 2000 and by April the first meeting of the appointed leaders took place. The leadership of each of the groups had been determined by senior management, who selected people with significant experience and knowledge in their respective areas, in addition to having the enthusiasm, determination and commitment to lead this new strategy.

Each Global Practice Group has three dedicated people – a chairman (leader), a manager and a secretary – who collectively have a budget to fund their activities. It was, and still is, vital to maintain senior-management support, so each Global Practice Group has an executive sponsor to whom it reports directly. Each executive sponsor is a very senior-level leader within the company. Other members of the Global Practice Group are practitioners based in any of the 125 countries in which Aon operates. These group members wear two hats: one as a practitioner or client manager, and the other as a Global Practice Group member.

Due to the geographic diversity of the Global Practice Group membership, getting together regularly has always been a challenge. To overcome this, the groups have incorporated a two-tier structure with both core team and other members.

Core members have regular telephone, video and web conferences, and aim to hold a face-to-face meeting in each major region of the world at least once a year. These physical meetings have been important in fostering and maintaining relationships and in determining how better to pool expertise and knowledge. The main medium for connecting the other members is through the intranet.

Each Global Practice Group has a dedicated intranet site to facilitate knowledge sharing on a continuous basis. The sites have been designed to be single repositories where information can be shared. Each group’s intranet site has the same look and feel as the other, ensuring that any one of Aon’s 55,000 employees can enter any one of the sites and easily locate the information they are looking for. The common sections for each intranet site are:

Contacts and resources;
News and publications;
Products and services;
Sales;
Conferences and events.

Each site contains information ranging from industry updates to specific news about terrorism and its potential impact on the relevant areas. Perhaps the most important feature is the discussion forum, which has helped the Global Practice Group members to answer questions and share their knowledge on everything from operational risk to loyalty schemes for mobile-telephone operators.

Global practice

The Global Practice Groups are there to provide Aon’s client managers and executives with the very latest knowledge and information to help solve clients’ risk issues. If the firm wins an account in Australia, we want to share the knowledge and good practice involved in that win with the rest of the world. It could be totally applicable to a practitioner in, for example, Germany.

Aon’s Property Global Practice Group (GPG) offers a good example of the benefits of collaborating on a global scale. The Property GPG has established a network of approximately 75 global contacts (which it intends to grow further) representing virtually every territory in which Aon operates. Through this network, Aon’s property practitioners share knowledge with each other and, through a series of technical market briefings, stay up-to-date with developments, not only within their own domestic market, but further afield as well.

The network is also crucial to the Property GPG’s benchmarking initiative, as its chairman, Nick Maher, explains. “On a global scale, we transact thousands of property deals every day across a broad range of businesses,” he says. “Through our network of global contacts, we are able to tap into that database and compile industry-specific reports that quickly and credibly demonstrate Aon’s depth of experience and global reach in every major industry sector. We have already seen that these reports have the power to differentiate Aon from our competitors.”

Benchmarking is an efficient way to manage client expectations and establish credentials. The Property Global Practice Group carried out 100 benchmarking studies across 40 industries in 2003. “The benchmarking studies demonstrate that we know and understand our client’s business sector. In some cases, the benchmarking reports have played a decisive role in winning new clients for Aon,” Maher adds.

Australian experience

The new world One particular example of the profitable use of Aon’s knowledge-sharing initiative is the way in which it has helped the company snatch business from competitors that would otherwise have passed it by.

Aon Australia’s Melbourne office received an invitation to tender for the insurance business of a leading Australasian toll-road company, which was held by one of Aon’s major competitors. The timeframe for the tender submission was very tight, allowing for little time to gather data and statistics. The Australian account director sent an e-mail to the Property GPG requesting urgent benchmarking information that would demonstrate Aon’s global expertise in the field of toll roads, tunnels and bridges.

Information on the insurance cover of similar companies was quickly collected from across the globe and compiled by Oliver Schofield, manager of the Property GPG. Property experts from China, Hong Kong, Canada, Brazil and Belgium sent details regarding their clients’ cover, which were anonymised to protect their identities – a good data protection policy.

The practice group was able to visibly demonstrate exactly what the toll company’s international peers were paying for property cover and provide details about limits and deductibles. Within 24 hours, Aon’s Melbourne office received the information; two days later the presentation was made to the company and less than two weeks after that Aon Melbourne was appointed as the new broker.

“The data demonstrated Aon’s expertise in the sector as well as its ability to co-ordinate a global approach to new business in a very short space of time. Aon Melbourne’s success was in part attributable to the invaluable information we managed to piece together at short notice,” says Schofield.

Aon Australia was able to differentiate itself from the competition, which was unable to gather such detailed global data within the allocated time. However, the story does not end there. Two weeks after the Australian appointment, colleagues in Aon Ireland started their pitch for an Irish toll-road company account. The team was aware of the Australian win and took a copy of the same benchmarking data, which by that time included the Australian data, to the prospect’s office.

Shortly afterwards, Aon was appointed as broker to this account, for all lines of insurance. “The benchmarking information allowed us to show our core competencies in the sector and our detailed understanding of the related risks. We could also clearly demonstrate the cohesive nature of Aon’s approach, by replicating good practice and seamlessly bringing our global expertise and knowledge to the client,” says Schofield.

On the road

A series of road shows have been integral in giving the Global Practice Groups visibility within Aon. Initiated in 2001, road shows have taken place throughout Europe and will be held in Australia, Asia and the US in 2004. By putting names to faces, the road shows have been instrumental in setting up dialogue and developing iterative changes and improvements to the overall Global Practice Group strategy.

The Global Practice Groups have also had an unforeseen benefit for Aon in that attrition rates have been incredibly low in the four years they have been in existence. The firm has been very lucky to have a stable membership within the groups, with only two changes in chairmen and managers so far. This stability most likely stems from the pioneering and exciting nature of the roles.

The Global Practice Groups have brought tremendous value to Aon, with the business having grown at a faster rate in those areas than within other parts of the business. This success has generated huge enthusiasm for replicating global good practice in a local context.

However, this has not always been the case. At first, people were unsure about the value they were adding by participating in the Global Practice Groups. Motivating individuals to participate therefore required a common sense of purpose and a belief in the value they were contributing. The company still has a long way to go in terms of culture, but it is seeing a great improvement in the willingness of employees to share information.

People are now starting to see some tangible benefits. The use of social-network analysis (SNA) also helped in this respect. SNA was piloted during the summer of 2003. Aimed at collating and analysing the patterns of relationships that exist within the company, SNA was utilised to identify patterns of interaction, information bottlenecks and knowledge brokers.

After an initially slow response, two groups volunteered to act as guinea pigs. A simple survey asked members to list all the experts they spoke to within Aon and to nominate their top three. A snapshot of the data was produced, which visually portrayed the patterns of knowledge flow in the network. The Global Practice Group managers saw the value of the analysis when a demonstration of the pilot results showed what could be achieved within their practice groups. As a result, we are increasing our use of SNA.

Another area that has been identified as a key to success is the creation of National Practice Groups in all the main countries during 2004. These groups replicate the work done by the Global Practice Groups on a local level, sharing good practice nationally.

Overall, then, the formation of the Global Practice Groups has been accepted and recognised throughout Aon as being successful in driving strategy, innovation, building good practice and transferring knowledge. Providing dedicated resources for each group has accelerated progress, although the need to communicate and build on this culture is a continual process.

Sarah Adams is operations manager for the Global Practice Groups at Aon. She can be contacted at: sarah.adams@ars.aon.co.uk

Lessons learnt

There are a number of lessons to draw upon from Aon’s early implementation of communities of practice:

When identifying which communities to dedicate organisational resources to, it is important to choose those communities that have the greatest potential to deliver tangible business value;
If community roles are appointed by the organisation rather than the community itself, ensure that those selected have the appropriate enthusiasm, determination and commitment to the role;
Senior-management support is critical for a community that is being afforded company resources and support. An executive sponsor can help to ensure a community remains focused on its core goals;
Regular telephone, video and web conferences can be invaluable in building relationships among community members when face-to-face meetings are not feasible;
A discussion forum can add tremendous value to community activities;
Road shows to promote community initiatives can help to build awareness and generate dialogue among potential members;
Social-network analysis is a useful tool for identifying patterns of interaction, information bottlenecks and knowledge brokers.