Dave Kaufman steers Motorists into new fields, both in and out of business

 

Dave Kaufman learned from a mentor that significance is more important than success.

“He was always coaching me to look at every situation to try to make a lasting difference and elevate it. How can you go beyond just what’s before you and have a positive impact that outlasts you and your team?” he says.

That quest for significance applies to business and life.

Kaufman became the CEO of Motorists Insurance Group in 2013; since then, he’s helped the company integrate its affiliated companies and double in size through a joint venture agreement with BrickStreet Mutual Insurance Co., all while steering through industry disruption.

The company also continues to make a mark on its downtown neighborhood with the bold move of developing townhomes on one of its surface lots. And Kaufman remains involved in his nonprofit, Future Possibilities.

It’s a lot to navigate, which is why he’s learned to focus.

“Everything that a CEO should do is probably around purpose and people,” he says.

Purpose focuses on the why and whether the company is doing the right things, while people considers engagement, culture and strategy. If the task doesn’t fall under one of those, it’s probably better handled by others, Kaufman says. It doesn’t matter that you likely got to your position because you were effective at executing operational matters.

Follow up and monitor without sacrificing empowerment. Once accountabilities are assigned, hold people accountable to bring back results, while watching for variance. If there’s variance, CEOs need to focus on what needs to be done and why, while those below them figure out the how, who and when, he says.

One identity

Over the past six years, Motorists has knocked down silo walls to create one company, rather than 12 companies previously under the Motorists umbrella.

The idea was to spark collaboration by working together on values, beliefs and behaviors, while centralizing operations into profit centers like personal lines, commercial lines, etc., rather than brands under different presidents. Employees would no longer identify first with a smaller affiliate like Wilson Mutual or Iowa Mutual.

It’s critical to focus on the strategy first, though, Kaufman says, not the structure you inherit.

“I’ve found it to be much more effective to make sure we’ve got the strategy clear, and then look at the structure that supports that strategy, and then look at the people you need, the skill sets within that structure,” he says.

It can be hard to call a timeout and ask, “What’s the strategy and what are the critical success factors to move from here to there?” but doing so is important.

“If you jump to the people first or the structure first and you let that dictate your strategy, it slows down and really lessens your potential,” Kaufman says.

Following its culture, strategy and structure approach, Motorists was getting close to coming together. Kaufman estimates the company was at eight on a 10-point scale, but he still watched for opportunities.

“We kept an eye open to if there was another company that could join our group and add immediate strategic value to that one-company vision,” he says.

While Motorists walked away from a number of opportunities, BrickStreet, out of Charleston, West Virginia, proved to be the exception. The companies signed a joint venture agreement in May 2017.

Greater together

Conversations between Motorists and BrickStreet began about four years ago, as the leaders of each company recognized the complementary fit.

Motorists predominately offered personal, commercial and life insurance for Main Street businesses, while BrickStreet focused solely on workers’ compensation for large accounts. Each company was worth about $750 million.

“When we came together, that took us to $1.5 billion, so we doubled our net worth, and that created the financial resources to accelerate some of the investments in systems and operations that we needed to really accelerate that one-company vision,” Kaufman says.

BrickStreet became an affiliate of Motorists, which kept the policy brands separate, for now, but otherwise acted much like a merger. Workers’ compensation operations were centralized in Charleston, with other product lines run out of Columbus.

Kaufman became CEO for both companies, while Greg Burton, BrickStreet’s CEO, moved to the executive chair. The board and the 12-person executive team were blended and staffed equally from each company.

Motorists wanted to move away from its pension plan, so it offered early retirement incentives. Kaufman says this helped address redundancy, and ultimately, headcount declined by about 300 to fall between 1,300 and 1,350.

Throughout this, the full-time job of the Motorists COO was managing the integration office with teams for IT, finance, HR, and marketing and underwriting.

“We expanded the integration office about a year ahead of time,” Kaufman says. “That was good, the way we recognized how important it was, and we resourced to put some of our best and brightest on it.”

The biggest challenge was communicating transparently, as employees asked questions that didn’t yet have answers.

“We used to have clarity around, here’s where we’re at, here’s where we’re going and here’s my role,” he says. “It wasn’t as clear as it was prior to the affiliation, and it’s taken us awhile to get that clarity back.”

Invest in the future

With the most difficult parts of integration behind it, today Motorists is focused on transforming its products and the technology it uses to offer those products.

“We’ve identified five new growth channels that didn’t exist prior to our affiliation,” Kaufman says.

A strong connection with local agents remains a critical differentiator, but Motorists also needs to invest in technology platforms, data and artificial intelligence.

“How do we plug in some of those innovations in a way that complements the relationships and service and doesn’t replace it?” he says.

BrickStreet already had state-of-art technology for workers’ compensation products. That enabled Motorists to focus elsewhere.

“The one good thing about bringing two organizations together, you’ve got abundant talent and expertise,” Kaufman says. “So, we’ve really used that to accelerate the path we were on. The system we’re rolling out to move commercial lines and personal lines to is probably two years ahead of schedule.”

The two companies also are very committed to doing the right thing, he says. This includes giving back to the community through well-funded corporate foundations.

BrickStreet supports West Virginia-focused initiatives, while Motorists is involved with the economic development of its Discovery District neighborhood. For example, it was a lead supporter of the new Washington Gladden Social Justice Park.

Kaufman says Motorists recently broke ground on townhomes adjacent to Topiary Park. The project, under the management of a subsidiary, MIG Realty, is scheduled to be completed around May 2020.

“These townhomes we’re building are just the next step. We had this footprint of parking lots and we thought that we could invest in them and continue the transformation of the Discovery District,” he says.

The company had previously built a data center in New Albany, but this is a very different type of project.

“Just like with any development project, we’re learning,” Kaufman says, adding that getting construction under way took longer than expected.

The company also may greenlight more development.

“We’ve got additional surface lots that don’t abut to the Topiary Park,” he says. “When we authorized this, we actually looked at a broader plan, a three-phase plan, and thought, ‘Well, let’s start with this and get a sense of the experience and how close we come to realizing our objectives. And then as this moves forward, we’ll make decisions on some of the other plots of land we have.’”

Pay it forward

Motorists — and its commitment to philanthropy — is fittingly led by someone who has that same commitment on a personal level. Kaufman, the first person in his family to go to college, originally had no plans for higher education.

But when the owner of a local car dealership, who had seen Kaufman play basketball, discovered that, he took him to Ohio Wesleyan and introduced him to the basketball coach.

“He actually passed away fall term of my freshman year. He completely changed the trajectory of my life, and I never got a chance to thank him. The only day I spent with him was the day we went to campus,” Kaufman says.

To pay back somebody who was no longer alive, Kaufman decided to do the same thing for another kid. When he heard about Future Possibilities, founded in New York City, he found the right fit.

Today, the nonprofit is just focused in Columbus. Approximately 80 coaches meet weekly with 80 fifth-graders to help them develop life skills. To build self-esteem, each child sets a goal, develops a plan to reach that goal and then works to achieve it.

Kaufman remembers the first child he coached; his father was in prison and his mother was unemployed. The first time he went to the house, they didn’t use the front door because they were afraid that they couldn’t get it locked again.

“It’s just like, wow, this is three blocks from my office,” he says.

Moments like that help you appreciate what you’ve been blessed with and fuel your commitment to give back and try to make a difference, Kaufman says.

After all, significance is always greater than success.

 

Takeaways:

  • Focus on people and purpose; delegate the rest.
  • Don’t let the structure dictate your strategy.
  • Accelerate your path with new resources, without losing what got you there.

 

The file:

Name: Dave Kaufman
Title: CEO
Company: Motorists Insurance Group

Born: Bellefontaine, Ohio
Education: Bachelor’s in mathematics and economics, Ohio Wesleyan University

If you planned to be a math teacher and basketball coach, how did you end up in insurance? I was thinking of getting my master’s and did some interviews on campus. Connecticut General liked my background and thought it aligned with being an actuary, which I didn’t know anything about.

They flew me out to Hartford. In one of the last interviews, the guy asked me if I played baseball because he had seen some of the sports I was involved with. Long story short, the shortstop on their softball team was hurt. So, I ended up staying over that weekend and subbing in for him. That turned into a job offer and changed my whole course.

What were the hardest management skill for you to learn? Probably the difficult conversation, where you’ve got an individual that’s not performing to expectations. You invest a lot in coaching them, empowering them and leading them, and then it’s not working. You have to divorce the professional from the person.

It has to happen. If you avoid that, then typically the people to get hurt are your top performers because they have to cover for the underachiever.

Where might someone find you on the weekend? I like sports. I golf, snow ski, play tennis and run. My wife’s the marathon runner. I’ve run five, but I run because she does. So really any of that, with my three daughters who are all active that way, too. It would definitely be some kind of sporting event.