You could say Mike Winner crunches numbers. Give him parts of four insurance companies, for instance, and he’ll come out with one. Or start with a territory that expands across 47 states, and he’ll condense it to eight.
But he explains his math with a simple — albeit improper — “1+1=3.”
Don’t question his computing skills, though. He became chief financial officer of Ohio Casualty in May 2004, three months after joining the company as senior vice president controller. Then Liberty Mutual Agency Markets acquired the company, closing the deal in August 2007.
At that time, Ohio Casualty’s CEO retired and Winner stepped into the role of president and CEO. Then the crunching began.
Liberty already operated eight regional companies that covered most of the U.S. So rather than overlapping footprints, Winner had to condense Ohio Casualty’s coverage to a regional focus, which meant picking up business from three of Liberty’s existing companies to complement some of Ohio Casualty’s existing business.
“One of our challenges then was how did we take parts of four different companies and merge them into a new organization,” Winner says. “We didn’t want to lose anything, so we tried to … take the strengths of all four of those organizations.”
That focus on magnifying strengths translates to Winner’s 1+1=3 philosophy. That guided him as he named a new management team by looking into all four merging companies for the right talent. Together they built a plan and a vision to carry Ohio Casualty forward, keeping the rest of the 530 employees up to date with constant communication.
Find change drivers
Winner could have been overwhelmed with all of the changes swirling around his company after the acquisition. But when the deal closed, he locked his focus on the search for a new management team.
While some acquisitions veer toward a win-lose situation — where the acquirer stays in power and the acquired company loses people — Winner implemented Liberty’s 1+1=3 philosophy.
“That incorporates trying to pick the very strongest and the very best talent from the new combined organization,” he says. “It’s easy for you to immediately go back to people you’re familiar with and want to pick them and not challenge yourself to really consider, ‘OK, what are the strengths of some of the other people coming on board?’”
You have to lay aside your background and look at each potential executive objectively. This process should start before the acquisition is even finalized.
“One of the key areas you evaluate prior to closing any acquisition is the quality and depth of the management team of the acquired organization, including their ability to assimilate into the new combined organization. That would include employees that may be ready to step into a larger more significant management role,” he says. “You would compare their strengths and weaknesses to those of your current management group.”
In addition to spending time with the candidates when possible, Winner scrutinized their past performance reviews to find their strengths.
Specifically, he suggests keeping your eyes open for signs of their ability to adapt and drive change, traits that a newly merged company will require. Examine the demands of each role to identify additional characteristics.
“For each role, you should identify what core competencies are critical for success in that role, especially as you integrate companies together,” he says. “You then evaluate the individuals’ strengths and weaknesses in those core competencies to determine whether or not you believe they have the necessary skill set to achieve the objectives and goals for that role.”
To gauge those competencies during the interview, ask the candidates for examples of the traits in action.
As you zoom out to consider how the team will mesh as a whole, opt for diversity.
“By picking people from different parts [of the organizations], what you do is you bring different philosophies,” he says. “You bring different backgrounds and different mindsets, which allow you to then, over time, challenge each other.”
Make a plan of action
Winner’s second step was crafting a plan with his new team to direct the rest of the integration process. Because every function of the organization was affected by the acquisition, they wanted their plan to reflect them all.
“One of the challenges is you can try to do too much,” he says. “And what you end up doing in that case is you don’t do any of them well.”
They quickly realized they had to boil down their outlook to three to five critical objectives.
But they couldn’t do it alone. The first move was bringing in an experienced project planner — something Winner highly recommends doing.
He then asked not only the senior management but also the regional vice presidents and their territory managers, as well as agents — which the company views as customers — what was critical to them in the new organization.
As the responses came in, they listed them on a spreadsheet and assigned someone to summarize the key themes. This helped categorize responses by culture, product or service, and so on.
“That allows you to dig a little deeper into what were some of the key themes and then say, ‘What do we need to do about it? How do we need to plan?’” Winner says. “Coordinate the integration to address the concerns that are coming out.”
While they evaluated input, Winner and his team were also debating the changes they knew the acquisition would require.
“That’s one of the benefits of having a management team that came from all parts of the organization,” he says. “They brought different viewpoints, and they brought different experiences and so we had a very open discussion and dialogue about, ‘OK, if we had to narrow it down, what are those three to five critical things we have to get done?’”
They also brought in experts from across the organization to help them predict any challenges that their plan might present.
After you identify your broad goals from senior team discussions and other input, draw out the details by breaking initiatives down into steps.
For example, Winner’s objective of rebuilding relationships in the company’s shifting footprint encompassed steps to transfer underwriting support to offices inside the new territory, to tell agents who they would report to now and to open two new offices.
“The important thing is you have to have detailed project plans,” says Winner, who relied on his project planner to drive the team to the right level of detail. “You have to have specific dates as to when you’re going to accomplish something and who’s got responsibility for it. They’ve got to be detailed enough and actionable enough.”
The integration plan Winner devised with his team outlined what to do without directly stating the desired result. He realized that he couldn’t just lay out the steps and hope the vision decanted itself.
“People can take that more informal communication and they can kind of weave it the way they want to weave it,” he says.
So his team got more specific about the end goal of their plan. The process begins as a conversation about the backgrounds of your management team. That’s why it’s important to build a diverse team so it can serve as a repr
esentative from all sides of the organization.
That conversation forms a base of understanding where your employees are coming from. But you have to be willing to move on from there.
“We all bring our own backgrounds of what’s made us successful in whatever we’ve done, and so your first move is always to go back to where you’re comfortable and what’s made you a success in past,” he says. “As a leader, you have to be very willing to set those types of things aside and be very willing to listen, to adapt to change and to take a different process.”
So you start talking about the future. To overcome the differences surrounding who you were as separate companies, build common ground around who you want to be as an integrated company.
Your integration plan can serve as a guide because it lays out what you’re working toward. You can’t just skip the step of defining what that is.
“You think about it when you’re growing up: ‘Who do I want to be when I grow up?’” Winner says. “Well, in this case, it’s, ‘Who do we want to be when we get through this integration? How do we want ourselves defined?’”
Asking those kinds of questions, like, “How do we want competitors to think of us?” or, “Where do we want to be in five years?” can direct you. Simply articulating the answers can provide a clear goal to give employees direction and encourage their buy-in.
“It allows employees to then feel a greater sense of the organization they’re a part of,” Winner says. “Then it positions them much better to communicate that message and support that message to our agents as they work with them.”
Communicate to build consensus
As he got people and plans in place for the integration, Winner’s main priority was communicating to keep the company unified. But no matter how much communication he did, he wasn’t satisfied.
Fortunately, he got a chance to increase his efforts the second time around.
Just more than a year after Liberty acquired Ohio Casualty, it completed the acquisition of Safeco Corp., adding another company for Winner to integrate. Safeco will gradually become Liberty’s exclusive source for personal lines of insurance, and regional companies, like Ohio Casualty, will begin to focus solely on commercial lines.
This ongoing process will make constant, consistent communication even more important for Winner.
“The one lesson that I came through that process with is take what communication level you think you need and double it,” says Winner, who’s increasing his communication commitments by attending town halls at each office every quarter and setting up agency visits and dinners. “You can’t underestimate how much it takes to communicate, not only to employees but to your … constituents. You have got to stay in front of them and communicate constantly through that process.”
The first round of communication should strive to reassure employees and customers about the changes. To do that, share your plan, outlining how you’ll tackle the integration. It helps to deliver this message personally.
“That face-to-face communication from the leader of the organization, I think that helps to send the message of confidence,” says Winner, who also uses those environments to get feedback directly from employees.
Then keep everyone informed of your progress throughout the process, reiterating your main objectives as you do.
Use a variety of methods to make sure the message gets out. For Winner, written communication is the easiest way to circulate updates.
Winner’s updates often combine past and present. He’ll identify what the company has achieved in the past month as well as the goals on deck for the next couple of months.
That, he says, encourages consensus by building employees’ confidence in the plan.
“They can become overwhelmed with all the change and everything that’s going on,” Winner says. “But if you can show them the accomplishments along way, that, ‘Hey, we are getting things done, we are on project plan, and here’s what we’re going to do in the next 30 to 60 days,’ I think it starts to help break it down into something more manageable.”
While Winner still has some work to do, it all comes down to finding the strengths of everyone involved.
“You have to be very open to change,” says Winner, who led the new Ohio Casualty to 2008 revenue in excess of $700 million. “To be successful, you’ve got to be very willing to listen to the strengths of both sides of the organization — in our case it was four sides of the organization — and try to pick the very best aspects.”
How to reach: Ohio Casualty, (800) 843-6446 or www.ohiocasualty-ins.com