Bill Alvin uses customer feedback and strategic planning to chart a course for Health Alliance Plan Featured

7:00pm EDT November 25, 2010

Bill Alvin saw the need arise soon after the economy turned south in 2008.

Companies would need more affordable health insurance options for employees, and that meant that insurance providers, such as Health Alliance Plan, would need to find new ways to meet the needs of customers — both the companies that subscribe to HAP plans and the employees who receive the benefits — as all parties involved became more cost-conscious.

It was a challenge any way you slice it. But to Alvin — the company’s president and CEO — it also presented an opportunity to strengthen HAP’s positive reputation for customer service, a reputation that helped them generate $1.7 billion in 2009 revenue.

“A lot has changed over the past several years, with the economic decline,” Alvin says. “But we want to make sure our products serve the needs of customers today, both companies and individuals, and are affordable options for both members and companies. That is our most immediate challenge.”

To keep the needs of customers at the top of HAP’s priority list, Alvin needed to take steps to ensure that his company would stay close to customers by facilitating an ongoing dialogue with leaders of the companies that HAP serves. He also needed to ensure that his company would employ a strategic plan that would allow it to flourish in an era of tighter purse strings and health care reform.

To make it all a reality, he needed defined processes and engaged people.

“You need to have a clear vision and mission for the company; you need a well-thought-out and defined strategic plan, a well-thought-out plan for bringing that process to life and talented, committed people as part of the company,” Alvin says. “You need all of those pieces in order to bring your plan to fruition.”

Start talking

There are formal and informal ways of facilitating a dialogue with your customers. At HAP, Alvin and his staff strive to interface with customers in multiple venues. He wants the leaders of the companies that HAP serves to be comfortable sharing information over coffee, in a conference room or in a town-hall setting.

“The right way to do it is to have ongoing meetings with your customers during the year, and doing it in a way that meets their needs,” Alvin says. “The most constructive way I’ve found is probably having quarterly meetings with large employers during which we share information about products, utilization of services, and health and wellness initiatives. Other times, it’s just going over to visit an office and talk about new ideas that other companies are trying and having some success with or holding a dinner to make sure that the information continues to flow.

“You try to develop creative ways to exchange ideas with customers, develop rapport and trust among everyone so that we’re all going to be willing to work together constructively.”

The trust factor is critical if you want honest and comprehensive feedback from customers on what they like and dislike about the products and services you provide. You aren’t going to develop a true picture of what is and isn’t working in the marketplace unless you and your leadership team can get the straight scoop from the people who comprise your market.

“You want to create an environment where people are comfortable calling you on the phone, where they feel like they can ask you to come down to their offices, and you feel comfortable calling them,” Alvin says. “That’s why you need to have a variety of vehicles through which you interact with customers. Whether it’s office visits or quarterly meetings, not one or the other is going to be completely successful in its own right. But employing them collectively ensures your ability to stay close to customers, get their feedback and make sure that you’re responding to their needs.”

Alvin adheres to the old business truism, “The customer is always right.” You may or may not always agree with that, but if you want customers to find value in having a professional relationship with you and your company, you need to believe that the customer always deserves your attention.

If you’re not willing to put in the time to build relationships with your customers, not only will you lose business, you’ll lose insight. You need to be willing to put the time in with your customers and take their ideas and suggestions to heart. It doesn’t mean that you implement every nugget of feedback that comes your way, but you at least show your customers that you value their input.

“It’s like anything else in life, whether it’s a family member or people that you work with every day,” Alvin says. “It’s about developing a trustful relationship with your customer, where you can count on one another to work toward serving the best interests of both companies. It sounds fundamental, and in a lot of ways, this is the big key. That relationship creates the foundation for sharing creative ideas with one another, to be able to work through problems. If you have that foundation and relationship, you can work through the problems that inevitably arise in the course of customer relationships. You have to be responsive when a customer has an issue.”

Build a strategic plan

In building a strategic plan that would best meet the needs of customers, Alvin looked where a lot of business leaders have looked — to Jim Collins’ often-referenced business bible, “Good to Great.’

But the part Alvin references has nothing to do with buses or getting people to board them.

“In ‘Good to Great,’ they did research on companies that had superb performance over a 15-year period,” he says. “They analyzed these companies and determined certain common attributes of companies with high levels of performance. One of the common attributes was something called a unifying concept. It’s a simple concept that defines the company.”

To have a unifying concept as defined by Collins’ book, your company needs to be able to answer three questions: What are you deeply passionate about, what do you think you can do better than anybody else in the world, and what drives your economic engine?

“Companies that can focus on answering those questions would derive a unifying concept that everyone in the company can understand and embrace,” Alvin says. “That unifying concept serves as the heart of your strategic plan.”

Strategic plans are formed, in part, from the softer skills of drawing information from customer relationships, fueling passion for the work you do and maintaining an environment of continuous improvement throughout your company. But strategic plans are also rooted in hard data. You can’t really know if you’re meeting customer needs if you don’t have the numbers to back it up.

Above all, you should never trust your gut, even if you have years of experience to draw upon.

“You have to prove to yourself that the direction you are moving in makes sense, and you can’t do that without quantitative analysis,” Alvin says. “You are unable to ensure that you’re moving into a direction that you need to move in. There is an art and a science to running a business and leading a business, and measuring is part of the science of it. You have to have both the art, which is about culture and creating an environment where people can flourish, and science. The science is how you make sure that you’re moving in the right direction.”

Alvin facilitates a dual focus on both short-term and long-term goals at HAP. He wants his staff’s measurable projects to extend three years into the future, with longer-term projection for 2014 and beyond, when health care reform will start to take root.

“You have to do an analysis of the marketplace to project out what the marketplace is looking for now and what it will be looking for in the longer term,” he says. “We have a definition of our assessment of the environment as it will become reality in 2014, and our strategies therefore are based on longer-term assessments of the environment and developing unifying strategies that will serve the customer over that period of time.”

Stay adaptable

You need to be able to make adjustments to your plan as events unfold. You will probably never abandon the core mission statement of your company, but how you serve customers might change, your markets might shift or the economy might throw you another curveball.

To build adaptability into a strategic plan, you need to build a series of red lights into your planning and review process — intersections where you are forced to stop for a moment and survey the scene in front of you.

Alvin and his leadership team do an environmental analysis every year. It’s a short-term review aimed at identifying longer-term adjustments that will be needed, and it is done while those adjustments are still long-term specks on the horizon.

“As an example, we did an environmental analysis this past spring, then in late spring, we developed the objectives for 2011, and in summer and early fall, we developed the budget based on our objectives through 2011,” he says. “Every year, you’re going through a systematic process of evaluating the environment, evaluating the objectives, establishing new objectives for the following year and allocating resources in the budgetary process to make sure those objectives are accomplished. Some of the objectives are meant to be met over a three-year period instead of a one-year period, but there are milestones that need to be met every year.

“Basically, if things change in the marketplace, we see that a strategy isn’t achieving what we intended, we make adjustments and then extend the strategic plan out by one additional year. It’s always refreshed and always looking out three years.”

Course adjustments are something with which Alvin has had some firsthand experience over the past several years, as employers began to take an in-depth look at how they were spending money.

“Employers needed products that were less costly and shifted expense to the members more rapidly than we had anticipated,” he says. “When that happened, we had to move quickly to develop more high-deductible products where the initial costs were assumed by the individual employee. That’s an example of how we’ve needed to move quickly to modify an approach.”

But it all comes back to staying close to your customers and developing processes to measure your progress and ensure that your company is accomplishing what it set out to accomplish.

“We try to listen to customers and work with them in a consultative fashion,” Alvin says. “If you develop that type of relationship, they’ll tell you what is going on. If you have that consultative relationship, they will listen to your input, and together you can develop solutions that can best serve the needs of your customers.”

How to reach: Health Alliance Plan, (313) 872-8100 or