MAG Mutual President Darrell Grimes shares his three keys to growth Featured

8:01pm EDT July 31, 2011
MAG Mutual President Darrell Grimes shares his three keys to growth

It’s not a secret that every company wants to grow. It’s the corporate trophy that says you’re winning and on the right track. So when Darrell O. Grimes started as president and COO at MAG Mutual Insurance Co. in 2008, he initiated a new, five-year strategic plan to improve and grow the company, and he is already seeing the fruits of his labor. In 2008, the company had $1.45 billion in total assets, and in 2009, that number moved up to $1.54 billion — not necessarily an easy task in the economy these past few years.

The plan he initially created focused on three main areas: make it easy for customers to do business with the company, diversify the company’s risks and take care of his employees.

Grimes knew that if his team focused on these areas, it would mean good things for the company, and just a few years later, those numbers proved he was correct in his thinking. As he moves forward with completing that five-year plan, he’s confident his team will continue to succeed.

“We have a focus, and we have a lot of people pulling in the right direction,” Grimes says of the $312 million company.

Here are the keys to how Grimes successfully led MAG Mutual’s growth.

Create a plan

Before Grimes could do anything to grow the company, he had to know what he was trying to accomplish, so he started with a strategic plan.

Grimes and his team created a five-year plan, and they started by taking the senior staff off-site for a three-day meeting to work on it. The team started with a blank slate.

“Believe it or not, you have to almost start with a white page, to a certain degree, because it’s a changing environment, and you have to be resilient,” he says. “We had to be flexible and resilient and respond.”

They talked about the issues they’re affected by — health care, interest rates, inflation, the economy, the environment, frequency of losses, state issues, torte reform and so on — to see how things were changing and how their new plan needed to look to stay with the times.

“Make sure you focus on things that you can control,” Grimes says. “In other words, you can’t control, and I can’t control, interest rates. You and I can’t control health care reform. You and I can’t control tsunamis and earthquakes that are actually affecting us today. Focus on those things that you can control, but remain flexible and keep your options open, but have a mission and reason for being.”

Following the off-site meeting, Grimes and his team took the planning back to the office and continued to work on the plan there. Then they had an all-day meeting with the board of directors off-site to go through it. After that, they went back and revised and modified it a bit more, and then they made a final, formal presentation to the board, where it was approved. The entire process took about 90 days.

“You just have to talk it through,” he says. “You just talk it through until you finally say, ‘Yes, that’s the best course of action,’ but you have to remain flexible because the future may surprise you.”

It’s also important to keep the future in mind. While some people create plans and proceed to ignore them, Grimes says you have to come back to your plan each year.

“Even though it’s a five-year plan, we meet every year, and we go through the five-year plan,” he says. “It can be tweaked and modified and get new goals and have goals eliminated, which is very typical, so it keeps getting refined — not substantially but modified.”

Focus on your customers

Without your customer, you’d be hard-pressed to do anything in business, so you have to focus on them, which is the second key to growth.

At MAG Mutual, when a customer calls in, the company’s customer relationship management system displays not just the phone number coming in but details about that particular customer, too, such as the products and services he or she has with the company.

“It’s important to have a CRM system that can give us the one-view of the customer, so that we know how many products they have with us, what products they don’t have with us and what we can cross-sell to provide more services to our policyholders,” Grimes says.

When the call is answered, the conversation starts with a simple question — why are you calling? From there, the caller’s needs are met, but after the problem is solved, the representative may ask him or her about what other products and services he or she may need.

“It’s all focused on the customer,” he says. “Solve their problem, and see if there’s any other products that they need that most of the time they may not even know that we provide, or they don’t know we have the product at all. That’s important.”

It’s a common problem. Because the company is seen predominantly as a professional liability company, many customers may not understand that they also sell automobile insurance, homeowner’s insurance, business officer insurance, workers’ compensation and other products. By educating customers, it opens the door to better serve their needs and helps MAG Mutual grow.

In addition to the service they provide when customers call in, Grimes and his team also get out to talk to customers to find out what’s going on in their medical community. He says there’s a lot of differences in the delivery of medicine based on where you are, so it’s critical that they understand the issues facing their different clients.

“We want to understand what’s going on where they are, and that helps us to understand the issues a little bit better,” Grimes says. … “If you don’t get out and talk to your customers, you won’t know what’s going on, and you may not hear it from your staff.”

Grimes says the key is to listen — plain and simple. He and his team do this through larger meetings with customers and also by taking them to dinner.

“That’s probably the only tip I’ve got, because I don’t think a lot of them really listen,” he says. “My insurance company doesn’t really listen to me. When was the last time your insurance company took you out to dinner? That’s what we do. We’re not the same. We go above and beyond.”

Focus on your employees

The third key to Grimes’ success has been to make sure he listens to and takes care of his employees.

“If you take care of your employees, they will take care of your customer,” he says.

Grimes says his employees are a large part of MAG Mutual’s success, and to make sure that continues, he makes sure to communicate with them what his plan is and how they play a role in it. Sometimes it’s easy for employees to get lost in the overarching company strategy, but Grimes makes sure that’s not the case. He has shared-goal meetings where he and his team take a half a day and look at different goals and decide who will own that. From there, they look at who supports that goal.

“We always assign the goal to one individual so they are the primary individual responsible for the success of that goal, but they also know who’s in support of that goal, and then those are passed down to their support staff and their ultimate staff, as well,” he says.

This results in alignment to the corporate strategy. He wants employees to care about the strategy and its goals, so if the corporation hits its goal, then they get a bonus based upon how they met their individual goals.

And it’s not as if employees are blindly working and have no idea where they’re at. One of the big things Grimes communicates with them about is the company’s financial performance.

“It’s important that they understand that we’re all in the same boat and we’re all rowing in the same direction — that when times are good, they all get bonuses, and when times are not so good, we may get a smaller bonus or no bonus at all,” Grimes says. “If we don’t all pull together and understand what the financial results are, we will not do as well as a company, and we won’t service the clients the way we want to be serviced. It’s an open-book policy.”

In addition to talking about the numbers at monthly meetings with employees, he also makes sure to talk about the industry’s results and how MAG Mutual compares to it. He provides visual presentations and graphics to illustrate the numbers he talks about and aims to educate employees so they better understand how their contributions matter.

On top of these efforts, Grimes also encourages innovation throughout the organization and celebrates when employees suggest new ideas.

“I listen because no one person has all of the ideas,” he says. “It’s a collaborative environment.”

But his support for employees’ ideas goes beyond just listening. He also encourages them to try them out.

“We understand that most ideas may fail, but I’d rather have somebody that tries with an idea and have it fail then have somebody who doesn’t provide any ideas at all,” Grimes says.

If an idea doesn’t work, he doesn’t penalize that employee for it failing.

“You can provide all the ideas you want,” he says. “All you have to do is come up with one good one that we act on, and you will be recognized and you will be celebrated in front of your peers and appreciated, but you will not be penalized for something that doesn’t work.”

This attitude isn’t just a façade either. He says that in private conversations, the executives don’t gossip about or chastise employees for failed ideas — and that isn’t tolerated.

“Don’t cast down somebody who doesn’t have a good idea,” he says. “We’re happy that they provided an idea. … We don’t have politics.”

And employees know that. While many companies may reward employees who produce results, no matter how they got them, MAG Mutual doesn’t do that. They reward employees who focus on the customer and not on themselves.

“So many people are trying to move up in an organization and step over someone else to get up the corporate ladder,” Grimes says. “Just focus on the company and just focus on the customer, and you’ll find that all those other problems go away. … Forget trying to beat the guy down the hall. I think there’s too much of that. If people will do that, they’ll see how much easier it is to move up the corporate ladder without doing it. Just do the right thing.”

How to reach: MAG Mutual Insurance Co., (800) 282-4882 or www.magmutual.com.

Darrell O. Grimes

President and COO

MAG Mutual Insurance Co.

Born: Atlanta

Education: Georgia State University

What was your first job as a child?

Really my first job was just a paperboy — a 10-year-old kid delivering papers in the neighborhood, getting up at 4:30 in the morning, riding the little bicycle to Sandy Springs, Ga., and getting papers and riding them back in my neighborhood, throwing them out. That’s my first job. It was fun. There were three of us that did three neighborhoods together.

What’d you learn from that job that still applies?

Hard work pays off. That was hard work being a 10-year-old kid doing that. You ever seen the Sunday paper in Atlanta? Throw about 52 of those on my bicycle and try to ride uphill at 4:30 in the morning in the dark. It was harder work than you think. You worked hard, and by 6:30 or 7:00 in the morning, you were done, and we were on the swim team and we went swimming in the morning. Same thing — you work hard, play hard.

As a child, what did you want to be when you grew up?

I hate to sound like an oxymoron a little bit — I’m supporting physicians today — but in my family, I have four generations of doctors in my family. I’m the first one who’s not a doctor. So maybe that’s why I’m here today. That’s what I really thought about being. I was just really better with numbers, to be honest with you, and that’s why I followed through and got my CPA certificate. That’s what I was really better at.

Somehow I ended up in a professional liability company defending physicians. My grandfather was what we called them back then, a general practitioner. He used to do visits at home in a horse and buggy, and they would call him up, and he would come over in his horse and buggy and provide medical services, whatever you needed.

What’s the best advice you’ve ever received?

Don’t worry about those things you can’t control. Just try to manage through them. I see a lot of people worrying about things, but it’s just more stress in your life. Manage what you can control. Prepare for the worst, accept the rest. Don’t worry too much about what you can’t control. I think that’s important advice.