I was recently in Costa Rica meeting with some colleagues. Rather than go to the famous resort area in the north I visited the authentic part of the country far removed from the serenity of the vacationer’s retreat.
San Jose and the surrounding towns and cities that I visited were in all essence a chaotic environment. The country is blossoming into a prosperous country which is putting pressure on the old infrastructure and way of life. Driving around the cities is like running a gauntlet which is made up of a large number of accidents, nonexistent civic addresses, narrow and unmaintained roads, regular pedestrian deaths, blatant infringement of motor vehicle laws and lack of police enforcement.
In addition to all this, the city I visited, Cartago, is built on the side of an active volcano that destroyed the city in the early 1900’s. Break-in and enters happen frequently enough that most houses have bars and razor wire wrapped around them.
However as bad as this may all sound, after a couple days you begin to overlook the bad and only notice the good. This is mainly because you begin to realize that the country is thriving and growing beyond its third world status. The locals, known as Ticos, are capitalizing on the opportunities that are being presented to them. Tourism is a large industry and based on the sheer beauty of the place will always be, but other industries that you may not even realize are playing a pivotal role in the transformation of the country.
Information Technology is one of their best successes. Intel and HP have large operations in San Jose and with the downturn cost sensitive corporations are looking to Costa Rica with their large base of highly trained cost effective resources. The universities focus heavily on churning out more and more engineers with the right skill sets to fill the growing demand.
More recently I’ve been reading a book by Malcolm Gladwell titled Outliers. In the book Gladwell highlights the importance of effort over natural ability and argues that everyone is capable of success if they simply put enough effort into something (10,000 hours is the rule of thumb). In one example he states that if it wasn’t for the Beatles playing 10 hours sets at a strip bar in Germany, they would never have been successful. His argument being that without the long sets they would have never have had enough training to become the great band they were. It was for this foresight that the Beatles saw the opportunity in playing longer than the typical 1 hour set in the chaos of a strip bar that set them apart from the bands that never make it big.
These two examples highlight the ability to find opportunity in even the worst chaos imaginable. The insurance industry, with the current market meltdown and economic recession, is also enduring the chaotic environment that will breed opportunities.
Some of the best ideas come from a dire need to deal with an extenuating circumstance. Our cherished public healthcare system is an example of this. It was the depression and a minority government that formed the catalyst and allowed this great idea to become reality.
For the insurers and brokerages dealing with large losses, unacceptable home evaluations, reduced premiums and fluid books there is no better time to invest in solutions that improve productivity, guarantee a technological advantage, invest in people and invest in new areas of growth. The result is immediate reduction and elimination of the negative impact, while positioning themselves for growth after the calm returns.
It’s survival of the fittest where the leaders will invest in the future and where the losers will struggle to exist.