Insurance
Change agent
How Glenn W. Anderson grew Gainsco’s revenue by 103 percent in one year
By Kristy J. O’Hara
Smart Business Dallas | October 2006
Glenn W. Anderson saw
his company dwindle to nearly nothing after it exited the insurance line that accounted for 80 percent of its business.
In 2002, Gainsco Inc. was primarily in the commercial lines insurance business and was hemorrhaging money. After the company tried unsuccessfully to fix the problems, that part of the business was scrapped.
There was a seed of hope, however, in a small Florida subsidiary of the company that specialized in the nonstandard personal automobile insurance line. Anderson, CEO of the company, took that seed, spread it across the Southern states and created a stronger foundation, allowing Gainsco to grow to $99 million in revenue last year, a 103 percent increase over the previous year.
Smart Business spoke with Anderson about how he leads growth and establishes a vision for his 400 employees.
How do you manage growth?
When a rocket goes up into the air, it looks to be a perfect flight, but in reality, what is happening is the computers within the rocket are making adjustments on a millisecond basis. So what appears to be a perfect flight is really just a series of micro-adjustments.
The analogy is that when you grow as fast as we’re growing, you have to work under the assumption that something is not working right, and you have to have a highly proactive approach to find out what is not working right so that you can make those milli-adjustments.
If you’re successful in making a lot of millisecond adjustments, then that avoids the more severe adjustment that might otherwise occur because you failed to make the millisecond adjustments. God forbid you don’t even do that, and then the rocket falls out of orbit.
How do you make decisions?
What underlines our ability to do business is the fact that we have capital. One of the most central tenets of all is to make money. If you make money, you can always come back another day and write more business.
If you don’t make money, you’ve not earned the right to come back the next day to make money. If you’re facing decisions in business, ultimately you do what the right profit-making decision suggests you (do).
Be extraordinarily service-driven. Our customers ultimately vote as to whether they want to join or stay with our company. The retention of customers in our business is extraordinarily important because it’s our downstream and revenue stream, so to earn the right to retain those customers — earn their votes, so to speak — you have to provide extraordinary service because their doors are being knocked on at all times to leave our company and join another company, because that’s how competition works.
What keeps a company from growing?
If you don’t have the vision, and if you do not have a leadership team that is driven to achieve that vision, you essentially will not be compelled to make the changes that will drive you forward ... in that vision. You’re more likely to be operating more as an administrative maintenance organization, just keep on keeping on and sustaining what you have, but not developing the growth of the company.
There’s a tremendous amount of leverage associated with the vision and the leadership team that’s dedicated to achieving that vision.
In the absence of vision, there’s no reason to change or to upgrade or to improve or to develop or to grow.
How do you get employees to buy into that vision?
By having a broader environment and culture that’s exciting and vibrant, and enabling people to perform their jobs and grow in their careers. We grade out the performance of our organizational units in terms of 1 to 10 and keep track of their performance. We evaluate each of the individuals in those organizations with the same type of grading system.
The spirit of this is complete teamwork and honesty. If the organizational units are not evolving from a 6 to a 10, we’re candid about that measurement. We proactively identify what it takes to advance that organizational unit to become a 10.
If every day, every person is focused on moving from a 6 to a 10, in the context of fulfilling the vision, then we will make that happen.
How do you get them to do that?
Culturally, we create the environment where people are encouraged to speak up and perform at a high level and show how good they are. Secondly, we’re providing a lot of resources to provide the tools to enable them to succeed.
We’re investing a lot of money in new systems, new products, new tools, new capabilities. We’ve been less concerned with the impact of those expenditures on our bottom line and more concerned with building a foundation on the belief that if you build it right, the business will ultimately be generated because of that.
Build the foundation, and then you can add almost indefinitely to that foundation, but if you start going for the top of the pyramid without the foundation, it will ultimately collapse.
HOW TO REACH: Gainsco Inc., www.gainsco.com
