Lenox Case Study

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H B R CAS E ST U D Y

AND

COMMENTARY

Who is responsible for assuring technology success at Lenox? Five commentators offer expert advice.

The IT System That Couldn’t Deliver
by Byron Reimus


Reprint 97308

Lenox’s IT system is in trouble. Who will fix it, and how?

H B R CAS E ST U D Y

The IT System That Couldn’t Deliver
by Byron Reimus

COPYRIGHT © 1997 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

“Distribution is the name of the game,” Lenox CEO and president James Bennett told the insurance company’s newly hired chief information officer, Diana Sullivan, three years ago. Sullivan recalled the details of that first extended conversation with Bennett as though it were yesterday. “We depend heavily on independent agents to sell our policies,” Bennett had said. “As long as they have the option of offering our competitors’ products, we have to give agents the right tools to get the kind of fast, reliable information they need to close a sale in our favor. Think distribution. It’s that simple.” But it hadn’t been that simple. In her three years at Lenox Insurance Company, Sullivan had fulfilled to the letter the role of CIO that Bennett had described. Bennett had confided in her: “Computers have never been one of our strengths. We know we have some catching up to do.” Sullivan was proud of how she had

helped Lenox catch up—by updating key applications, bringing in new technologies, and reorganizing and streamlining the information services organization. Most important, she had led the development of Lifexpress, a sophisticated computeraided system that enabled the company’s more than 10,000 agents nationwide to conduct business with their customers and prospects in ways that had seemed next to impossible just a few years earlier. Lifexpress let an agent, using a laptop computer, develop a thorough financial profile of a customer, identify and explore Lenox’s most appropriate policies, conduct an initial actuarial analysis, compare in detail how Lenox stacked up against competitors’ ratings and performance, and generate all the necessary paperwork on-site to consummate a sale. A process that had taken anywhere from four to six weeks could now be completed in a few days or, in some instances, a matter of hours.

HBR’s cases, which are fictional, present common managerial dilemmas and offer concrete solutions from experts.

harvard business review • may–june 1997

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The IT System That Couldn’t Deliver •• •HBR CA SE S TUDY

Byron Reimus is a Boston-based writer and consultant on workplace communication issues.

Within the last few weeks, however, as Lenox’s IS staff finished rolling out the system, Sullivan began to realize that her role wasn’t as clear as she had thought it was after that first conversation with Bennett. She was no longer certain which accomplishments mattered. In the time it had taken Lenox to deliver Lifexpress, two competitors had launched similar systems, and Lenox’s executives were growing concerned that the multimillion-dollar project would not have the impact in the marketplace that they had hoped for. To Sullivan’s distress, her boss, Clay Fontana, Lenox’s chief financial officer, was clearly trying to hold her accountable for more than the creation and implementation of the system—he was putting her on the hook for the results of the system, too. Sullivan stood at her office window, looking out over Fairfield’s sprawling west side, wondering how she could begin to separate what she was responsible for from what she wasn’t. A veteran information-technology executive with more than 20 years of experience, Sullivan had been recruited by Lenox from a major competitor, in no small measure because of her understanding of the insurance business, excellent track record in information services, and strong leadership abilities. Bennett and Fontana had made it clear at the time that they wanted her to conceive a technology...
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