20/20 Change Agent

The scorecard was an eye-opening tool. Because of this simple piece of technology, a manager couldn't hide a bad performance. It was out there for all to see -- including CIGNA's president. Isom wouldn't look at activity reports; he relied entirely on the scorecard to track performance. If his computer screen flashed red, he started asking questions. He might find one big loss someplace, or he might discover a pattern of losses scattered around the United States. Then he'd dig deeper to find out what wasn't working. The technology forced people to focus on the most critical part of any transformation effort: performance.

"Too many times, people wrongly focus on the activity -- 'I called my key account 23 times' -- when it's the outcome -- 'I didn't close the deal' -- that shows whether you're moving toward the goal," Valerio says. "If we zero in on whether we got the job done, we can then have a rational discussion about what we need to do to improve performance.

"And that's the critical point: We were trying to create a climate in which people were willing to step up and announce, in effect, that they were in trouble -- which is incredibly hard. But gradually people grew to trust Isom enough to know that we didn't want to punish anyone. They saw for themselves that the sooner we knew what was wrong, the faster we could fix it."

As you close in on the goal, never lose sight of the big picture.

CIGNA rolled out its change effort in Chicago and Atlanta, then in Boston and Dallas. As Valerio worked feverishly to help CIGNA's leaders take on a specialist's mind-set, he realized that they were getting a serious case of tunnel vision.

"We reached a point where people had too narrow a focus on their own goals and performance," he says. "Say our inland marine unit decides to terminate a licensed agent who's repeatedly missing his targets. But this agent has been doing a great job handling workers' compensation for us, and now he's really mad. So he calls us back and tells us we can forget about any of his workers'-comp business.

"The lesson is this: Even discrete business units can't work in isolation. A good decision for inland marine might be a terrible decision for another unit. We needed to do a much better job of communicating across businesses."

To help managers keep the big picture in focus, Valerio drew up a "transformation map" -- a one-page document that laid out intermediate milestones and ultimate goals. Essentially, it helped managers ensure that their internal compass remains on true north: achieving the skill and the will that can enable CIGNA to break into the industry's top quarter.

"The transformation map became the ultimate filter for weeding out the things that might be problems but weren't getting us to our overall goal, and for identifying opportunities that would lead us to profitability," says Valerio. "It showed that if we executed these initiatives, the company would move in the right direction."

Did they make it to the promised land? Just follow the numbers: After sustaining that net operating loss of $275 million in 1993, CIGNA P&C racked up a gain of $80 million in 1998. And its combined ratio improved from 140% to 105% -- borderline top quarter. "We did so well," says Valerio, "that this past July, CIGNA Corp. packaged our domestic and international property-and-casualty operations and sold it to Ace Ltd. for $3.45 billion."

It took five years, but CIGNA P&C's change team pulled it off: They parallel-parked the battleship. Valerio left CIGNA in September to become a vice president with the Balanced Scorecard Collaborative.

Coordinates: Tom Valerio, tvalerio@bscol.com