Bob Restrepo was brought to State Auto Insurance Cos. with a mission. He was the first CEO the company had recruited from outside the organization. This was an intentional move by a board that felt its company was in need of perusal by a fresh set of eyes.
“They thought we had gotten very insular, not arrogant but introverted, and that we might be losing touch with the marketplace,” Restrepo says. “So when I came here, I spent a lot of time listening and learning.”
Restrepo wanted to know what was holding the company back. So he began asking questions of all the company’s movers and shakers, from board members to stock analysts to industry regulators.
“I asked them all the same questions,” Restrepo says. “‘What would you like to see change? What would you not like to see change? What do you think our biggest opportunities and threats are? What advice do you have for me about what I should do first?’”
His initial investigation showed him that State Auto was a successful and profitable company. The $1.8 billion property and casualty insurance provider is one of only 13 companies to maintain an excellent rating from A.M. Best & Co. every year since 1954.
But internally, State Auto had developed a lot of silos and that had the potential to hamper the 2,600-employee company’s ability to maintain that level of performance.
“We wanted ways to instill greater collaboration and fewer silos,” Restrepo says. “I really wanted to be able to look at the whole company and identify areas that would improve productivity and that would lower costs. I wanted to identify areas where we could be more responsive to our customers and areas that would position us for both profit and growth going forward.”
Lay it all out there
Remaking your organization, even if it’s not obviously broken, still requires participation and buy-in from all levels. This internal support is infinitely more important than any outside help you might enlist for the effort.
“You never turn it over to a consultant,” Restrepo says. “You lose credibility with the organization. You lose engagement. You lose good ideas. More often than not, all you’re going to get is somebody else’s regurgitated ideas of what might be good as opposed to what’s in the best interest of your organization and what’s consistent with your company’s corporate culture, both current and where you want to be.”
Restrepo, who is also chairman and president, did call on some limited external resources to help shape parts of the restructuring at State Auto. But the bulk of the decisions on this plan would be made by the people who came to work there each and every day.
He spent about six weeks giving presentations to everyone in the company in groups of about 20 or 30 people at a time.
“I was reminding them of what the strategy was, where we were well-positioned to achieve the strategy and where we were not well-positioned,” Restrepo says. “It was really focusing on poor productivity and our cost structure. We had never had a layoff before and that’s what people are most concerned about.
“I prepared them by saying, ‘Look, I can tell you right now where I think we’re overstaffed and where I think we’re understaffed. But this process is going to validate that. It’s not just about what I think. It’s about what you think. You at the front lines know where we’re not productive or where we’re underinvested. I need you to be involved in helping us do what’s best for the company, regardless of the impact on us individually.’ So it’s very candid.”
When you lay your initial plan out there, you need to provide time for questions and feedback.
“You have to be very candid, very transparent, very open and very nondefensive,” Restrepo says. “But people are still going to hear what they want to hear. You have to steel yourself to not get distracted and get defensive. Nobody is ever 100 percent bought in.”
You just need to keep working to engage people and get them on board with you as their leader.
“I wanted a process that would engage the organization and develop the information we needed, not only to implement the ideas but to monitor the success in executing to that implementation,” Restrepo says. “We told them this was going to be an opportunity for them to develop as individuals as well as make a big contribution to the company. It’s looking for opportunities for alignment where an individual says, ‘I’m excited about this. I’m going to get better out of this with an opportunity to make the organization better.’ My personal experience has always been the best things that have happened to me in my career were areas where I could make a big contribution.”
Gather your people
Restrepo looks for three things when he’s trying to put a team together: intelligence, energy and ambition.
“I always define ambition as the desire and capacity to learn, not to get to the next level but to learn and be able to operate effectively outside of their comfort zone,” Restrepo says.
You’re looking for people who demonstrated leadership ability. To help in that effort, Restrepo created a talent team whose job is to identify the leaders and prime-time players at State Auto.
The team of seven or eight individuals meets monthly and simply talks about the talent in the company. As a result of that dialogue, the team composed a list of the 50 top performers in the organization.
“We use this as a list of people we think have high potential,” Restrepo says. “We align them with members of the talent team for informal mentoring.”
Each year, the list is revised, meaning it consistently offers a sample of the best of the best.
“We use that pool of people for any special projects that might crop up that we think might be a good development opportunity,” Restrepo says.
Using the talent team and his own observations, Restrepo began to put together teams to look at various aspects of the company. To maintain a spirit of discovery, he looked to put people in positions outside of their comfort zone.
“So we had salespeople looking at IT,” Restrepo says. “We had IT people looking at products. It was an opportunity to not only evaluate the organization, but it was an opportunity to evaluate individuals outside of their comfort zone.”
You’re giving your people an opportunity to stretch their boundaries, and when they respond to it, see how they handle it. Each person feels a sense of camaraderie at trying something new.
“It’s putting together a diverse team of people who trust one another and are willing to collaborate and who are credible,” Restrepo says. “People in the organization say, ‘I trust that person. That person wants to do the right thing and is not political. They are going to do the right thing for the organization.’”
Restrepo also put together teams to challenge the teams and vet their ideas to make sure they fit in with the overall company goal.
“I didn’t want a process that imposed change from the top down,” Restrepo says. “I wanted to engage the whole organization in developing innovative new ideas.”
Keep it moving
You want to get your people involved, and you don’t want to be overbearing in leading a change effort. But at the same time, it’s your responsibility to keep things moving.
“What the leader has to do is to make real clear what’s expected and when it’s expected,” Restrepo says. “Trust the people to make it happen. If they don’t make it happen, then we’ve got a problem. I kind of have a deaf ear to why they didn’t get it done, because I made it real clear this was their No. 1 objective and they were expected to do their jobs.
Restrepo spoke with managers who were losing people to this project to plan for their absence in an effort to clear the obstacle of time from their work.
But everyone is busy and sometimes you just have to deal with it.
“We all have peak times and you have to learn how to manage and balance,” Restrepo says. “Sometimes the only way to manage and balance is to put in more hours and that’s what folks did. But they understood why it was important and understood that it was important. They also understood that it wasn’t going to go on forever. People have to learn how to manage themselves and their teams through peaks.”
Your job is to keep things moving, but it’s not to be a micromanager.
“If you want to empower people, you need to give clear direction and then you have to get out of their way,” Restrepo says. “But you have to have means to verify that they are making progress.
“Make sure you have a point person or point people to check in with to monitor progress. I’m always asking, ‘Who is in charge? Who is accountable? Who loses sleep if we are off track on this? How far down the organization are they?’ It’s making sure you have the right person in charge and you have to look them in the eye every once in a while. It’s just really assigning clear measurable responsibilities. I want to know, ‘Who is it that is going to make this happen?’ Then it’s holding them accountable for it. ‘Did you do it or didn’t you do it?’”
You also need to make sure you’re keeping the rest of the company involved, even those who aren’t directly engaged in the process. The key to any project is a clear sign of progress.
“We gave at least monthly updates to everybody,” Restrepo says. “You’ve got to communicate status. When the process was over, I did a second round of employee meetings, 20 to 25 people to talk about the high-impact ideas and spend time specifically on those areas that affected my audience.”
Perhaps most importantly with any project, in addition to getting it done, is how quickly you get it done.
“The first critical success factor is, ‘Do it fast,’” Restrepo says. “I’ve seen projects that last 18 months. They bring in an outside consultant and they do one after another and it takes 18 months to two years. Whatever you do, do it fast. I have a friend who works with me here and he says, ‘Fast beats perfect every time.’”
The end result is a company that’s in a better position to move forward.
“We’re much better positioned for the future,” Restrepo says. “I knew when I got here we were going to need to make some structural changes. We had been doing things the same way for 15 years. We called our project, Innovate State Auto, but there wasn’t a whole lot (of innovation) that came out of this.
“It was just getting us up to some reasonably good practices. What it’s positioned us for now is to take the next step and say, ‘OK, now what are the best practices?’ It’s positioned us to be more responsive to our customers and positioned us to accelerate profitable growth.”
How to reach: State Auto Insurance Cos., (614) 464-5000 or www.stateauto.com