John Ammendola disrupts the status quo to transform Grange Insurance

 

When John Ammendola became the president and CEO of Grange Insurance in the beginning of 2015, he knew it was time to disrupt the status quo.

“We’re an 80-year old company and we have a culture that is disciplined, but has been very conservative,” he says.

Consumer preferences and expectations are changing dramatically, largely due to technology. At the same time, risk is shifting with cyber exposure, ride sharing, Airbnb and more. As he set out to change course, Ammendola found the pieces came together quickly to make a transformation possible.

Grange’s board of directors understood the necessity, the urgency and supported Ammendola as an agent of change. A new chief information officer could help Ammendola reinvent the organization — not only with technology changes, but also with encouraging innovation as a byproduct of culture. Plus, Grange’s senior team and many employees were pushing for change.

It was up to Ammendola to set the tone from the top and show the way forward, because change needed to remain a collective priority for a company with nearly 1,300 employees and more than $1 billion in revenue.

“There’s a circle of what I call conventional thinking,” he says. “That’s where the recipes are formed and they’ve been cooking for 80 years. They work and nobody wants to touch and disrupt (them).”

Companies like Blockbuster and Kodak likely discussed new trends, but they kept with what worked well. Today, artificial intelligence, chatbots, drones, greater mobility, increasingly autonomous vehicles, homes communicating with devices, buildings communicating with risk managers and wearables telling people about their health make it obvious that circle can become dangerous, Ammendola says. Often, fresh, or even disruptive, ideas are needed to stay in touch with the needs of your customers.

Starting out

It’s not easy to change the core of an organization, even if it’s necessary.

In addition to hiring new talent who’d experienced transformation and had the necessary skills, communication has been critical, he says. There is no end to it.

“You have to continuously keep that process of dialog going, because it is disorienting and it is something that without explanation or buy-in can become very difficult,” Ammendola says.

A new value was added to the corporate culture: To solve creatively for tomorrow. To invite associates to accept the idea of innovation, and failing fast and failing forward, a pillar of transformation and modernization was added to the strategy. This would encourage moving more ideas to action.

Ammendola also had to clarify alignment throughout the organization. Once he and his senior team made the case for change, what does that mean for each employee? Why is their job important and how can they play a part in the change?

“This is all in parallel, you don’t do this sequentially. You’re beginning to communicate, beginning to augment, bringing in talent,” he says.

Early changes included making the website mobile friendly, releasing a mobile application, making the MyGrange portal easier to use and becoming a part of Amazon’s Alexa Voice Service. At the release in January, Grange was just one of three insurance carriers to offer an Amazon Alexa skill. People can use Alexa to find a local independent Grange Insurance agent, hear the insurance tip of the day and learn about Grange and its insurance products.

To encourage more innovation, the CIO and others visited Silicon Valley on a discovery trip. Ammendola previously went on a similar trip with The Columbus Partnership.

Grange also launched an innovation incubator. It wasn’t a separate building with Ph.Ds. trying to change the trajectory of the world, but a chance to highlight employees who already had the spirit and desire to push the company forward.

“In a sense, they were doing this on their own time and as a byproduct of their roles, and now it’s becoming part of the cultural fabric,” Ammendola says.

The incubator includes an innovation wall to help people feel more comfortable with new ideas that can be shared and crowdsourced. Ammendola was videotaped as the first person to write on the wall.

“Again, in our very conservative environment, we’d say writing on the walls was a no-no,” he says.

Innovation competition events also began, where business problems are proposed to the group. Groups, which have included vendors, come together with unique ideas for the way forward. (Independent agents will be included in future events.)

Ammendola says the first team that won weren’t technologists, but the group came up with a great concept for how to take advantage of chatbots and AI.

“Their idea and thought around what business should look like would never even enter the domain if we hadn’t started to break the culture here and think about the fact that innovation and ideas can come from everywhere,” he says.

The ideas from the innovation incubator, with the help of a software interface, are being collected, sorted and responded to.

“It’s important that ideas are acknowledged, just like our survey gets acknowledged,” Ammendola says. “If we say we’re listening, but nothing happens, then it just becomes noise.”

When to throttle, when to brake

Because Grange has such a long-tenured culture, the changes have been disorienting for many.

There is no perfect way to transform a company, Ammendola says. You start with the basics: Augment your value streams. Communicate the why. Make the case for change. Reinvent your strategy. Connect those together. Align that to people. Begin to bridge that with real events. Then from those events create wins, and then build from those wins.

But CEOs or other senior leaders need intestinal fortitude because change is sloppy, he says. There will be moments when you want to go back to the status quo because it’s easier.

“There’s no question there are nights where I’m sleepless, wondering, ‘Am I pushing too hard?’” Ammendola says.

As the steward, it’s your job to make the tough choices to ensure the company survives, he says. You have to look over the horizon and make bets on things that are changing rapidly, while a lot of people either don’t believe the trends or aren’t exposed to them.

You want to try to get people to understand that you’re not changing the values, strategy and execution to hurt them.

“We’re trying to make sure that the company is surviving and thriving for not only you, but your children and your children’s children,” Ammendola says.

When trying to determine when to apply the gas and when to apply the brake, he uses his experience and listens.

He wants an environment of candor with associates. He and his team hold skip-level meetings, forums where associates share what’s on their minds, what’s working and what’s not. Anonymous opinion surveys also provide feedback. Ammendola says he’s plowing through 1,300 comments of a recently completed survey.

His sense from the surveys is that the workforce breaks into thirds. Some want Grange to move even faster. The middle is worried that they’re lacking in the right skills and waiting for more information. The final third, which isn’t tenure based, are resisting the change.

So far, Grange’s net promoter score, a measure of whether employees would recommend the company, has remained stable, he says. Grange, which has no plans to reduce staff, is working hard to provide associates who are having trouble adjusting with additional training and open channels to ask questions.

“Nonetheless, I think that we will get there because we’re going to be disciplined and persistent about the need for change,” Ammendola says.

But he also recognizes that Grange can be under too much duress. Too much change will feel like change for the sake of change.

“Which unfortunately at times throughout this process, there’s no question that has happened. That then parlays into misinformation, communication that you thought was clear that wasn’t clear.” he says.

As Grange heads into 2018, Ammendola is having his senior team pause and examine the priorities to ensure the most critical come first. What’s not as important may be delayed.

The change is also felt unevenly across the organization, and areas that don’t feel the change at the same level may be more positive. The technology department, on the other hand, is going through tremendous disorientation around its new tools and skills, he says.

“That area is under even more pressure, so then it translates to myself, the CIO and the COO talking about what do we need to do to ensure we’re creating engagement, the appropriate level of communication and the need for change, but also not completely wiping people out because they’re so stressed and overburdened,” Ammendola says.

One thing Ammendola wants to emphasize in the future is that it’s OK for people to fail. There hasn’t been much opportunity for him and his senior team to do that yet, but he says when you point out a failure where people tried again and got it right, it’s an opportunity to begin to reinvent the culture.

In the insurance industry, perfection tends to be the art of the day, Ammendola says.

“We’re not the only company who is going to struggle with changing their environment to a more innovative one.

There’s a lot of legacy companies out there of all shapes and sizes in the insurance sector,” he says.

 

Takeaways:

  • A case for change requires persistence and discipline.
  • Align changes, so employees know what it means for them.
  • Communicate and listen to dictate the pace of change.

 

Ohio’s Fintech71 Accelerator

In addition to participating in Smart Columbus, Grange is an investor and board member of Ohio’s new Fintech71 Accelerator, which seeks to spur innovation and growth. Fintech refers to computer programs or other technology used to support or enable banking and financial services.

With the backing of Ohio-based industry leaders and JobsOhio, the intensive 10-week program gives startups access to top financial services companies, along with a stipend of $100,000 for a flexible, stage-appropriate equity stake.

The first 10 startups, announced in September, included five international companies. Startups needed at least one fintech product or solution prototype and two or more team members who could attend the full program in person.

Not only does it raise Ohio’s profile, Ammendola says mentorships with companies like Grange help startups see if they can turn up the volume and get to the next level. Fintech71 is even open 24/7.

“Entrepreneurs are amazing people. I’m not one of them, I want to be clear, but I want to take advantage of them. They have a passion and a spirit to how they think about their idea. They are relentless in beginning to create it, and if it fails, to move on to the next thing,” he says.

Not only should corporations engage with startups to see what’s coming, the education goes both ways, Ammendola says. Companies can say, “Oh, that’s a good idea, but if you’d move that a little to the right, it would be even more powerful.”

Fintech is another step in Grange’s journey to create innovation as a core competency, disrupt the status quo and create a culture that not only desires change, but also knows how to flex toward it, he says.

Learn more about Fintech71 and its inaugural cohort, which finishes later this month.

 

The Ammendola File:

Name: John Ammendola
Title: President and CEO
Company: Grange Insurance

Born: Queens, New York

Education: Bachelor’s degree in marketing, The New York Institute of Technology School of Management

What was your first job and what did you learn from it? My passion was to be a rock ’n’ roll star, so I did have long hair back then. But my first job, absent playing in a band, was a movie theater usher. I had the bow tie, blue jacket, black slacks and that little sweeper and the flashlight.

I learned that I had an affinity to lead; eventually I became the lead usher. I had a desire to be the person trying to guide, direct and have the responsibility for the greater group.

What leadership skill was the hardest for you to learn and why? What I had to un-learn was a high order of technical aptitude with too much detail, making it hard for the general audience to consume. I’ve been working hard to summarize and order my thoughts into one, two or three things.

I’m big on helping people understand because I think if they understand, they can bridge the reasons why they’re either participating or choose to not participate. That’s a muscle that I had to work hard on in the beginning — taking the technical and creating more summarized points that are poignant and people can galvanize around.

What do you like to do when you’re not working? I love to cook and enjoy cooking Italian, as that’s my heritage. One of my more stress-relieving moments is the preparation and process. Because of growing up in an Italian household, I try to spread the joy. I like a lot of people around — a lot of food, drink and conversation.