Auto Insurance & Conway's Law

Earlier in July, I had the misfortune of having my car dinged badly at a grocery store parking lot. It seemed like the driver in the adjacent lane had miscalculated the angle of reverse and side-swiped the back. She was honest enough to leave her phone number on the windshield of my car, asking me to call back.

It was a mess, and I was angry. I took her insurance details and called my insurance (Esurance) to report the accident/ damage.

The Esurance rep asked me to also call the other drivers’ insurance (THG) and report the accident/ file a claim with them as well.

I worked with THG and after a few weeks, my car was repaired. It was good as new, and all was forgiven and forgotten. During the whole process, I was never contacted by Esurance.

Except that yesterday, almost 2 months later, I received a check ($2203.41) from Esurance as payment for the car repairs.

I was surprised. Why was Esurance sending me a check for car repairs when my car was already repaired 2 months back?

I checked with the Esurance claims department and their short response to my question was to send them back the check or shred it (since they couldn't mail me a pre-paid business response envelope). In essence, their sending the check was a mistake demonstrating their lack of knowledge of my claim/ claim resolution.

This experience is one of many that proves the magical prophecy of Conway’s law time and again

Melvin Conway stated in 1967 that “Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization's communication structure”.

This is commonly known as Conway’s Law.

While the original interpretation was more focused on software and systems (Conway was a computer programmer), it is also extrapolatable for products & services.

Companies that excel, ensure that their organizational design and communication structure is a catalyst for their products and service.

Organizations that are structured for streamlined functional excellence, have products and services that inherit the siloed nature of the teams building & supporting them.

If we reflect on the Esurance (An Allstate company) example, it is apparent that the product “auto insurance” and the service “insurance claims” design suffer from the complexity of the underlying organizational structure. The claims officer was from National General which is another Allstate company.

It seems that there was no communication between Esurance/ NGIC and THG, the claims team did not contact THG or establish a line of sight regarding incident resolution, and they had absolutely no clue that the incident was already resolved.

Earlier in the month, I canceled my auto insurance with Esurance given my poor experience. If I had to put all the effort and work with THG to get my car fixed, I wasn’t sure what I was paying Esurance for.

By the time their check arrived, the need was gone.

This experience is just one example of how companies with complex and siloed organizational structures struggle to provide integrated and seamless products/ services. The end result is frustrated customers who switch to other products and ultimately, the business suffers.

Resolving these inefficiencies is at the crux of frameworks such as “intelligent enterprises”.

In future posts, I will explore how Conway’s law manifests in life sciences organizations, the broader impact, and how the concept of “intelligent enterprises” aims to address these challenges.

I am interested to hear your experiences and if you are able to correlate the product/ service inefficiencies to the organizational structures.