Rocking the boat Featured

7:00pm EDT November 24, 2006
Throughout his management career, Kirk Rothrock rarely understood the meanings of all the buzzwords and catch phrases that make up corporate mission statements, much less how they affected him.

“It appeared that my job was completely unrelated to what these sayings on the wall were,” Rothrock says. “It seemed to me that there should be a connection that if you’re going to make some statements about what you are as a company and what you’re going to be, your employees should be connected to that.”

He vowed that if he ever ran a company, he would create values that employees actually understood and related to their jobs.

Today, as chairman, president and CEO of CompBenefits Corp., Rothrock is doing just that. He joined the employee benefits company in 2003 after its revenue had declined 18 percent in two years. Coming in, he saw employees who were too inwardly focused and caught up in doing their jobs without much regard to customers or how their jobs affected customers.

If he could get employees out of their silos and understanding how their responsibilities impacted other departments and customers, the company could grow again, but that meant overhauling the corporate culture. He thought it would be a quick and simple process but slowly learned that an effective cultural shake-up takes a lot of time and repetition.

“In three weeks I could have gotten the (values) list that somebody came up with in their office — that’s the kind that I used to work for,” Rothrock says. “And I’d say, ‘Who thought these things up? Did we talk to anybody? This is out of a book somewhere. Sense of urgency? Customer focus? Well, what does it mean?’

“No one could describe them for you. That’s why I said, ‘Let’s do this right. Let’s take some time. Let’s engage our people and get it right the first time,’ and we have.”

Finding a focus
Rothrock wasted no time in making changes. He brought in outside people he had worked with in the past and whom he trusted to develop values rooted in the employees.

To get buy-in, the changes needed to include the employees, and over an eight-month period, this team spoke with about 60 percent of the 750 employees.

“The culture wasn’t what I wanted it to be when I got here, but still we had good people,” Rothrock says. “Generally, there were good people who were trying, so we started there and evaluated where we were today and offered up some different kinds of values and beliefs and tried them out on people. “They didn’t come in with a textbook answer and say, ‘These are the kinds of things your company should be like. This is what you should emulate,’ with no relation to what was already embedded in some of the folks in the organization.”

Rothrock made sure everyone knew how they related to the new values.

“We spent the time to describe that clearly, so that when people read the poster on the wall, they had a pretty good sense of what it was,” Rothrock says. “We followed up and continue to follow up to this day with providing context — ‘Let me describe what I mean when I say this. Let me describe what that means to our customers. Let me describe what that means to my expectations of you. Let me describe how it impacts what you do every day.’”

Employees are taking it to heart. One data entry employee, who corrects problem claims, views her job as a daily opportunity to demonstrate the company’s dedication to its customers. She puts herself on the spot to show other workers how to fix problems so that they aren’t repeated.

She acknowledges that customers come to CompBenefits expecting a high level of service, so by showing others how to do better, she helps them better meet customers’ service expectations so that the customers stay with the company.

Creating buy-in
With any change, it takes a continual effort to get people on board and moving with you.

“It’d be nice to say I sent a memo out one day, and the next day the entire organization was behaving differently,” Rothrock says. “That’s not the case. It has taken years. I’m surprised. ... It has been, in a word, repetition.”

He started by setting an example — leading meetings, explaining business plans and connecting the dots between decisions and values so that employees understood the changes.

“When we succeeded, we pointed back to where in the culture this fit in,” Rothrock says. “When we failed, we were able to show that we were undertaking actions that didn’t line up with any of these kinds of things.”

It wasn’t enough for employees to nod and smile during the evolution, either. They needed to really understand how they affected other departments and to care about how those other departments performed, as well.

“They could be a bad citizen as long as the work got done one way, shape or form,” Rothrock says. “Part of all this is understanding the entire process and understanding that what we do affects our customers.”

To shatter this silo approach, Rothrock explained to employees that for the company to truly focus on customers, every person had to focus on correctly completing responsibilities the first time. The company maintains a 99 percent accuracy rate in claims completion, but that 1 percent of inaccuracy equates to about 20,000 mistakes a year.

“Loyalty, or our measure of persistency, is key,” Rothrock says. “When you make a sale, initially you’re making a promise. You’re saying, ‘Buy from us, and everything you want, we’ll do. You’ll be happy with what we do for you. I promise you.’ “That’s easy. It’s during the course of the year when all 750 employees have to make good on that promise — have to actually send out a bill that’s right, have to pay a claim correctly, have to answer the phones and provide a high level of service. The real measure of success is this loyalty factor. At the end of the year, when the employer says, ‘Do I renew with CompBenefits ... or do I walk away because they didn’t fulfill my promises ... I’ve been able to bring back to our employees and say, ‘Every one of you have an impact on whether these customers stay with us.’”

 

As with any change, some people didn’t like it and left. Turnover was higher during that initial transition period, but Rothrock didn’t let the anxiety of losing employees and managers permeate the company. “Every opening was a new opportunity to go out and recruit the kind of people that did fit, that did want to be aligned with our culture, that did want to be aligned with our beliefs,” Rothrock says.

He focused on getting new people with commitment and energy to knock naysayers off the fence.

“Being surrounded with more people that believed and were encouraging, we clearly had a lot of converts, if you will,” Rothrock says. “A lot of people that were initially on the fence ... when they saw new people come in, they said, ‘Hey, I’m going to jump on that bandwagon. I’m going to buy in to this. I can see where we’re headed as an organization.’”

Changing habits
Getting people excited about new possibilities is one thing but ensuring they don’t revert to their old habits is another story. To combat this, Rothrock overhauled management reviews to make them less dependent on numbers and more focused on how managers engage with employees.

“If people weren’t quite sure that we were serious about this, the first time they were reviewed under the new framework and format for annual reviews, the first time they saw those, they got religion, if you will,” Rothrock says. “No longer was it good enough just to get your job done and turn in the production numbers.”

 

Employees also completed quarterly satisfaction surveys about how well they felt their managers did in providing them with training, tools and understanding the values.

Any manager who scored below a set standard received six months of remedial training and tools to become a better manager. After every manager consistently met that standard, Rothrock raised the bar and worked with the bottom five performers, no matter their score, to increase their effectiveness.

“Now you have more managers who are spending more time with their people, making sure their people are doing the right things, are motivated, enthused and working with other departments,” Rothrock says.

Rothrock didn’t want to ignore the frontline employees, either. He wanted to better engage them so they would have a higher level of job satisfaction and stick with the company, creating a sense of comfort for customers.

He instituted product training programs that, once voluntarily completed, allow employees to field calls regarding the product they trained for. Employees can train for several products, allowing them to have a more interesting day by fielding calls on several topics instead of one. They also receive a slight pay bump for each program.

The programs give employees some control over their job responsibilities and pay scale, and CompBenefits benefits, as well, as its turnover rate has fallen by half since it instituted the program.

“People haven’t changed jobs,” Rothrock says. “They’re not demanding to be promoted. They’re not saying, ‘I’m bored. I need to quit and go somewhere else.’ The job satisfaction has increased dramatically.”

Paying off
Although slow starting, Rothrock now sees the fruits of his labor. Revenue has grown 17 percent over 2003, as CompBenefits hit $323.8 million last year and expects to post $347.5 million for 2006.

“Revenue is the measure of how valuable customers think you are,” Rothrock says. “Are they willing to pay you to do what it is you do for them? Do they see value in it? Did they spend a dollar with you? Did they get enough value back that they were happy to spend that dollar, and they’d spend it again?”

And as CompBenefits continues to grow, it maintains its focus on teaching employees about the values any time decisions are made. Continuing education and training, combined with positive reinforcement, have created a culture of happier employees who are working harder to ensure that the current error rate of 1 percent is reduced so they are rewarded with customer loyalty.

“When we serve them the way they want to be served, they reward us with their loyalty,” Rothrock says. “They don’t go to a competitor, and we build our business that way by having a customer stay loyal to us and begin to build a customer base.”

Rothrock has learned to have patience and stay the course, even if progress can’t be immediately seen along the tumultuous journey because eventually, the rewards will appear. He’s finally reaping his rewards, as the company just earned its largest contract ever, a contract he says it wouldn’t have earned two years ago because of how different the culture was.

“The bottom line is it’s not just nice talk and having people with smiles on their face, but there is a business result that comes from this,” Rothrock says. “I really think that our success and the growth that we’ve had the last year or so is directly attributable to having an organization that is aligned behind a common set of organizational beliefs and a common goal.”

HOW TO REACH:CompBenefits Corp., www.compbenefits.com