December 21, 2021

Six lessons Aviva learned about working with startups

The 325-year old insurer started with a digital transformation and ended up with a venture builder and an investment arm, Ben Luckett tells Sifted. In part six of #FutureProofonCulture, we explore what the company has learnt in the process

Thomas Brown

11 min read

When can trace your business back to 1696, it's hard to create a sense of urgency about change.

After all, you’ve weathered plenty of storms to get through three-and-a-quarter centuries — why the fuss now? But the world of insurance is facing disruption on multiple fronts.

Customers are changing — delaying big life events such as starting a family or buying a home, and have ever more demanding expectations. The market is in flux as wealth and asset ownership and transfer between generations is changing. Data has become a strategic asset, and technology is presenting opportunity and threat in equal measure — in particular, unleashing an ever-growing portfolio of startups and disruptors that have distilled once complex business models, risk processes and customer interactions into something as simple as an app we can carry around in our pocket.

Six years ago, Aviva laid out a comprehensive innovation strategy, designed to help identify and invest in the technologies and businesses that would determine its future. It went on to launch its corporate venture capital fund Aviva Ventures, investing capital directly into startups and currently managing a portfolio of 11 businesses. More recently, it expanded this approach, making fund investments across insurtech, fintech and broader science and technology themes.


Six years on, Ben Luckett, now the group’s chief innovation officer, tells Sifted what the company has learnt.

Three important conversations for the executive committee

Keeping an executive committee engaged with your innovation agenda is something of a juggling act — especially in a publicly listed organisation.

Put too much emphasis on shiny, sexy things and you risk being seen as detached from the reality of commercial imperatives. Keep the best-kept secrets close to your chest and you risk turning innovation into (yet another) silo. Talk too much about tech, disruption and Silicon Valley and you stand to lose those in your audience whose sleepless nights come from quarterly performance targets and tracking important metrics such as customer churn or costs of acquisition.

Luckett says he has avoided some of these pitfalls by having regular conversations with the executive committee, focusing on three strands.

  1. The pace of execution: “We’re constantly comparing how we operate with the startup world,” says Luckett. “To make this meaningful and to actually take action, you’ve got to root it in the real world. We identify real problems and opportunities within the business where we can see how our pace of analysis, decision-making or execution could either hold us back, or make us more successful. Those conversations focus the mind.”
  2. How people respond to innovation stimulus: “The second conversation we want to have is around mindset. When leaders are presented with ideas, insights, trends or data, we need to ask how they’re responding. Do they understand it? Does it just register, or are they challenged or inspired to act on it? Do they have the drive to embrace what they’re seeing and hearing, and to deliver on our innovation agenda, or are they stuck in a comfort zone of doing what we’ve always done?”
  3. Outside-in perspectives: “It’s our role as the innovation function to help externalise the wider business. We do this in four ways. We share trends and insights and facilitate debate. We show what our competitors and disruptors are doing in or adjacent to our market. We show how our customers are responding to new products and services, and bring their feedback and needs into the business. And we bring founders from some of the companies we partner with or invest in to talk directly to our executive committee.”

Innovation has to mature as the organisation does

Six years doesn’t necessarily sound like that long of a time, in the grand scheme of life. But then, six short years ago the iPhone 6S was Apple’s latest flagship offering. It was well before Covid-19, lockdowns and social distancing, and before Brexit. Before Trump. A lot can happen in a short space of time.

Aviva’s approach to innovation has evolved since its strategy was conceived in 2015. At the time, the organisation — like many of its peers — was focused on a digital transformation agenda, upgrading legacy technology infrastructure and digitising key customer interactions.

Separately, Luckett formed Aviva Ventures, a discrete unit designed to think longer-term than the application of digital to existing businesses and existing processes.

“At the time, my role was to place bets on the things we felt would shape our industry in the future, and to feed that back into the core organisation,” says Luckett. “I operated on the edge of the business, focused on new technologies and partnerships, playing the role of an external agitator.”

Fast-forward six years, and the organisation’s digitisation efforts have gone from single transformation to continuing iteration. The need for a major programme of change with digital had subsided, as the big ticket issues had been addressed and the organisation’s digital capability had matured.

“It’s at this point, in January 2021, that we brought together our work on new propositions and customer engagement with our ventures unit,” Luckett says. “This has really helped to join the dots between near-term problem solving and customer opportunities which can land a 3-12 month timeframe, and our medium and longer-term investments. And the two are not mutually exclusive — work we undertake on a new proposition or a change in product offering today may become a venture we build or invest in tomorrow, or vice versa.”


Link innovation to time horizons

Balancing short and long-term investment is tricky. Making a difference today, where the work is tangible and the results measurable in the short term, runs counter to longer-term investments which are inherently less predictable, less tangible and likely to have returns measured in years rather than months.

For Luckett, the key to managing the tension is to break innovation into bite-sized components, which are mapped against different time horizons.

“We don’t talk about innovation as a singular concept,” he explains. “We break it into three components. The first is rapid proposition development — this is where we focus on innovating around customer needs to deliver better products and services, and our time horizon is within 12 months. Our typical work here involves agile development, test and learn, prototyping and small scale testing in-market.

“The second is venture building, where we’re looking to nurture and grow new businesses outside of business-as-usual and in adjacencies that we believe will be important for future growth. This is where we work primarily with our partners at Founders Factory, and our time horizon tends to be three to five years.”

In this component, for instance, Aviva incubated Tembo Money, a startup behind an innovative alternative to equity release designed to help families unlock funds from property in an ethical and affordable way — aiming to provide younger generations with cash when they need it most, such as getting onto the property ladder. Tembo uses technology to arrange and manage all family lending and external borrowing, optimising how the whole family accesses finance.

“And the third component of innovation is our venture capital activity. These are longer-term bets which may only be relevant in 5-10 years’ time. They may deliver a strategic benefit earlier, such as insight we can play into the business today, but this is where we invest in someone else’s innovation as a corporate observer or supporter.

“In the health space, for example, we’ve invested in Owlstone Medical, who are creating a new industry category of breath biopsy, using proven technology — chemical sensing — to detect biomarkers in breath for non-invasive diagnostics for cancers, infectious diseases and inflammatory diseases.”

Innovation is the strategy

Communicating the innovation agenda to senior leaders, the wider employee population and external stakeholders is also a challenge — especially given the competing corporate noise and project fatigue.

Luckett says that Aviva has tried to overcome this by putting innovation at the centre of the organisation’s strategy, rather than adjunct to it.

He concedes that the organisation’s commitment to innovation has “ebbed and flowed” over the years, largely determined by how the CEO of the time sees the market and priorities. In Amanda Blanc, appointed Aviva’s chief executive in mid-2020, Luckett has a staunch advocate for the efforts of his unit. Under her watch he assumed the newly formed chief innovation officer role, reporting directly into the CEO's office.

“I don’t have to worry as much about how we communicate our innovation agenda,” he explains. “It’s already happening at a macro level because it's baked into our strategy. So when we are communicating and narrating our corporate strategy for our employees and other stakeholders, our innovation priorities are woven throughout that message.

However, this approach isn’t a panacea, he cautions. “Broadcast only gets you so far,” he adds. “It gives macro context, but it can’t replace the micro, personalised conversations.”

Relationship building is key, he believes. Luckett invests a lot of his personal time working with business unit CEOs and functional leaders to bring the corporate narrative to life. He focuses on five areas:

  • Personalising the innovation agenda for different business units;
  • Offering opportunities for collaboration, be that internal or external;
  • Telling the story of what they’re doing, where they’re investing their efforts and how they’re progressing;
  • Sharing trends and insights with leaders below the executive team;
  • Involving executives in external innovation efforts.

“Where we make an investment in an outside company,” he explains, “we will ordinarily choose one of our senior leaders to join the board of the business. This provides the startups with an experienced person to act as a sounding board and advocate, and is a great way of giving our own talent exposure to the startup world while also immersing them in an organisation we’ve made a strategic investment in.”

Innovation has to be owned by the business

"Not made here syndrome" is one of the more common frustrations encountered by innovation leaders, but Luckett believes that his philosophy for Aviva's innovation function holds part of the solution.

“Where a lot of innovation strategies fall over is in scaling something which has been developed on the fringes,” he says. “If your innovation efforts are too separate from the core business, when you come to scale you have to sell the idea to someone.

“You’ve got to convince someone in a part of the organisation to take what you’ve brought them and prioritise it (and resource it) ahead of whatever else they already had on their agenda. The best way to avoid fighting for buy-in is to have the business units and their leaders own the innovation from the outset.”

Luckett leads what he styles as a "very small innovation team" — six full-time staff with deep investment and proposition design expertise — and stresses that they are positioned primarily as facilitators, advisers and partners to the business. “95% of innovation should live in the business, with our support, counsel and expertise where needed — but it lives in the business. We act as an internal accelerator for projects — we test and learn in collaboration with a business unit and when ready to scale, based on an agreed set of KPIs, the business unit takes over.”

Innovation teams should, at the same time, be careful not to inadvertently denigrate "the core", disenfranchising employees in the process.

“I don’t think it’s particularly helpful to set innovation up as any more important than anything else we’re doing for customers on a day-to-day basis. Why should the back-office finance function that keeps the ship moving be given any less prominence or value?”

Partner, partner, partner

Luckett says it’s been en vogue in recent years for corporates to create their own labs, accelerator programmes and similar. He advocates a different approach.

“Running things internally can be a distraction, and there are often better people out there who can do it for you,” he explains. “We looked at what our core capabilities are and focused on that.”

He suggests that the best thing Aviva can do for start-ups is to offer a pilot programme or a proof of concept, rather than an accelerator.

“We leave a lot of that to external partners, such as Founders Factory. It’s also why, in addition to our own corporate venture capital fund, we invest in select third-party VC funds — we know that they will have access to certain deals, geographies or expertise that we don’t have internally, and don’t want to build.”

TL;DR? The key takeaways…

  • Bring the outside-in to your executive committee, but root your conversations in real issues within the organisation.
  • Don’t see your innovation structure or strategy as static — be prepared to evolve them as your maturity changes.
  • Link different parts of innovation to time horizons to manage expectations.
  • Put innovation at the heart of strategy, not a bolt-on.
  • Put ownership of innovation within the business to avoid fighting for buy-in.
  • Don’t make innovation out to be more important than how your business creates value for customers every day.
  • Don’t try to do all or be all — partner with experts where it makes sense.

Share your perspective

We’d love to hear from you…

🤔 What most resonates from Ben’s learnings and advice?
🤷🏻‍♂️ Is how you position and narrate your innovation agenda potentially working against you?

Share your thoughts and ideas in the comments below, or on LinkedIn or Twitter using the hashtag #FutureProofonCulture.

Thomas Brown is Sifted’s Corporate Innovation Reporter, and a freelance journalist, award-winning author and consultant, specialising in digital transformation, innovation, organisational culture and consumer behaviour. You’ll find him tweeting from @ThinkStuff.

Ben Luckett is the chief innovation officer of Aviva plc, and a member of the CEO Office. Prior to taking up his current role in January 2021, he set up and led Aviva Ventures from August 2015, before which he was the Strategy Director for the UK General Insurance business. Ben also serves on the Boards of Founders Factory and Wealthify.