Every once in a while, we come across a partnership tie-up that helps to bring clarity and elegance to the way organisations partner and the capabilities they bring together, into perspective. There is often so many learnings in examining these, and this week it was the turn of leading South-African insurer Discovery and its Asia-based counterpart, AIA group, to demonstrate such good lessons on partnering. So what can we learn from the launch of this joint-venture partnership? And particularly on partner selection. We have drawn from our work in this area, to help guide the discussion. Here are some of the questions we posed:
- Do we understand the necessary building blocks to realise the ecosystem business idea which this partnership is founded on? In this case, the AIA group has been operating in Asian markets for over a century and its tie-up to use Discovery’s innovative Vitality offering, has been in place since 2013, tested in fact in 10 markets across Asia. In setting up a full joint venture arrangement, named Amplify Health, both parties were therefore well aware and had the time to test in the market their idea of scaling Amplify’s health and wellness InsurTech business. With these building blocks in mind, we have the foundation to examine other aspects…
- Do we know the potential partner universe, down to the level of key people? This may seem a rather simple question, particularly for incumbents and where some form of partnership has been in place – but it can also be misleading and where we must challenge our understanding of the ecosystem and its various role-players, to gain new insights and realise value. Let’s face it, we all bring biases into the selection of partners, and on the nature and scale of the ecosystem for which we partner – even more so are our biases in evaluating the strengths and weaknesses of various role players. Our experience is that the scale of the ecosystem business idea can often eclipse our initial view by a magnitude of 3-4. It is projected that by 2030, 2.6 billion people would be in the middle classes in Asia and so having a clearer sense of how the ecosystem might evolve could be very significant – when considering capital requirements and expected returns. Hence, expanding our network and adopting an outsiders’ perspective helps us challenge such ingrained perspectives and deepen our understanding of key people and roles. A worthwhile activity…
- How well do we know the commitment and the collaboration capabilities of partners? Again, a track-record of existing collaboration is helpful but so is introspection. In our work with leadership teams, we have seen time and again how our assessment of existing capabilities and leadership commitment to, where needed, re-purpose such capabilities, can be significantly under- or over-estimated. And much value lies in a balanced, validated perspective of this important area. Such introspection is an inherent part of the way Discovery works and a testament to its commitment to build partnerships that last.
- Do influencers (on both sides) have a sufficient level of involvement in the ecosystem? The choice of leaders to head Amplify Health’ business tells a story here. While this JV is 75% owned by AIA, the joint-venture will be headed by Dr Jonathan Broomberg, the former Chief Executive Officer of Discovery Health and currently Chief Executive Officer of Vitality Health. Such familiarity with the ecosystem by leaders on both sides bodes well for a successful partnership.
- Are we nurturing strong relationships with digital enablers and innovation ecosystems? The answer may be subjective, but there would be some credible signs of whether this is the case (or not). Both entities in this case have learned much from cultivating relationships with digital enablers and a variety of innovation ecosystem participants, both within their org’s and more broadly. Discovery Vitality’s ecosystem, for example, relies on creating shared value with not only its customers but with doctors and health-professional groups. Nurturing such relationships allows for more than just stability. It provides access to data and collaboration opportunities, well beyond the enterprise. Similarly, AIA have been ramping their digital technology enablement through partnerships, so as to offer more personalised products and services. Their regional digital technology partnership with ZA Tech, the technology arm for the overseas market of ZhongAn Online P&C Insurance, a partnership launched in 2020, comes to mind.
Growing in partnerships requires us to be open-minded, to be curious, and learn about aspects of the ecosystem in which value can be created and discerning in the choices we make. The choice of partners to help accelerate and realise our business ideas is one of the most critical of these, and where we can rely on many learnings – and perhaps now, some new ones, from Asia’s latest InsureTech, Amplify Health.
Have a good weekend everyone.
Our Manifesto 2.0
Discovery and AIA to establish a pan-Asian health InsurTech business
The Death of Competition, by James F. Moore
From our partners at the Center for the Future of Organization (CFFO), How to succeed in business ecosystems