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How an open mind and a clear plan helped Tony Mercurio build the new Vanliner Insurance Featured

8:00pm EDT September 30, 2012
How an open mind and a clear plan helped Tony Mercurio build the new Vanliner Insurance

Tony Mercurio had a lot on his mind just a few months after he became CEO at Vanliner Insurance Co.

He had a group of employees who were looking to him for both direction and for answers to their many questions after his employer, National Interstate Corp., had bought their company.

In addition, Vanliner had been purchased from UniGroup Inc., which just happened to be its largest customer. To make it even more fun for Mercurio, UniGroup was now his landlord at Vanliner’s offices in St. Louis.

“Their CEO is down the hall from me,” Mercurio says, referring to the CEO of UniGroup. “That entered into the perspective of how we went about the first six to eight months managing and changing the company.”

The due diligence process took a little under a year and confirmed to National Interstate that the acquisition of Vanliner was a good idea. But that was on paper. It was up to Mercurio to make it happen in the real world and seamlessly blend the things Vanliner did well with the practices that worked best for National Interstate.

“Neither culture or approach to the business was good or bad, per se,” Mercurio says. “But the way we run our business, certainly the way we’ve run it out of Ohio and now how we do it in St. Louis was very different than how old Vanliner had handled its business in the past.”

Tough choices would need to be made as Mercurio worked through those differences to build one cohesive organization. Personnel redundancies were one of the first issues to be addressed, but there were other concerns that he faced in trying to bring everyone together at the company, which now has about 125 employees.

It was enough to leave him feeling a little scared but not enough to make him question for even a moment his ability to make it all work in the end.

“It’s OK to run scared a little bit,” Mercurio says. “Sometimes people think it’s the opposite of confidence and it’s not. I was running scared, but I decided if I just kept getting up every morning and going to bed late at night and kept putting the time in, as long as I didn’t skip my 4-mile run because that’s where I kept my sanity each day, as long as I did all that, we’d get through it.

“In hindsight, I don’t think I’d do it any other way. I’m glad I was afraid. Being afraid to fail and having that be your motivator is not always a bad thing. I felt it, absolutely I did.”

Live your plan

As Mercurio saw the uncertainty in the eyes of his employees a few months into the integration process of the new Vanliner, he remained confident. He had a plan in mind for how the new company would come together, and he believed in it. He just needed to convince everyone else that it would work.

“I had a seven- or eight-page outline that I did that took us all the way through Dec. 31, 2011, down to what our final results would be on the first full year of ownership,” Mercurio says.

“Several things changed along the way, but if you don’t set the expectations, if you don’t have the objectives, if you don’t write them down and if you don’t hold yourself accountable, it’s much harder to achieve the success you’re looking for.”

Despite the extensive planning, he knew that success wouldn’t be easy to achieve. If anyone understood impatience, it was Mercurio.

“It’s not in my personality to stay patient,” Mercurio says. “I feel urgent about performance and about accomplishing our objectives. But this was a situation that needed time. It wasn’t going to be years, but it needed to be months to let it play out and let the people here who I knew, ultimately, we could trust and depend on see it and feel it and be part of it as we steered it in a different direction.”

Mercurio made two promises that he felt very confident could be fulfilled.

“Hollow promises are about the worst thing,” Mercurio says. “Making a promise that you can’t pull through if you have a group that is looking to you to be their leader, that’s about the worst thing that can happen. The promises we made were pretty calculated.”

Mercurio wanted to put something on the table that his people could point to and shoot for that would make all the work and struggle they were going through in the transition process seem worthwhile.

The first promise involved a new targeted alternative risk solution for moving agents aligned with the Allied Agents Association. He promised that this new product would be a success and make the company better.

“The other thing I promised was that within six months, the workload and results, the numbers, would improve if everybody hung in there and believed in what we were doing,” Mercurio says. “That was at the same time that we took away flex hours and did some other things that were just different organizationally. So it was hard to get people to buy in. There were a few sleepless nights as you make promises like that.”

Fortunately, the new product and the idea that things could get better soon proved to be great motivators and a great way to identify who was truly on board with Mercurio’s vision for the new company.

“The best people love to be challenged and love to be pushed to what they believe are their limits,” Mercurio says. “Sometimes, they do not give themselves enough credit to know that their limits are higher than where they have set them. I’m not just talking about workload. I’m talking about being challenged to be creative, to take a little risk and get outside of their comfort zone. Those kinds of things, especially when the results go along with it, are rewarded in our system.”

Give people a chance

Mercurio had the power and wherewithal to take over this new company and fill spots with his own handpicked employees brought over from National Interstate. They would be people he worked with before and was comfortable with and he wouldn’t have to spend time getting to know them.

But that couldn’t be further from the approach that Mercurio took in this particular situation.

“We only brought four people from the National Interstate office to the Vanliner Insurance Co.,” Mercurio says. “We needed to leverage the talent that is here. A lot of people on the staff had several years of moving and storage experience and the people from Cleveland had zero. We had other insurance experiences and captive alternative risk transfer experiences to bring.

“But we decided that we weren’t going to integrate with 30 people.”

Mercurio knew he had talent at his disposal that had worked for the previous Vanliner entity. Who was he to come in and tell people they didn’t cut it just because he had never worked with them before?

“We brought in the claims vice president from the parent company to help interview and assess the claims people,” Mercurio says. “We brought in the IT management and project management people to help assess the IT people. We did that in every area. My background is marketing, underwriting and sales, so I took that lead. But we had other folks I knew we could count on assess individuals as we went through the first six months of the tenure.”

His philosophy in appraising the skills of these people was to find out what they could do for the company. Mercurio gave them a chance to sell their skills or their ability to learn new skills and took that into consideration when decisions needed to be made.

“The way to empower employees, whether they’ve worked for you for three days or 13 years is let them write their own objectives,” Mercurio says.

“Let them tell you what they’re going to do for the organization. You may have to tweak them and you sit down and go through a collaborative effort and you get to the end result that both believe would be the right set of objectives for the year.

“But let them take the first crack. It’s amazing how people own what the objectives are and hold themselves accountable if they are the ones who get to come up with it.”

He adds that you might be surprised how similar your list is with the list of objectives your employees will come up with, if you give them the chance to do it.

“You’ll be surprised as to how close the two lists are if they’ve lived in your culture for even a short amount of time,” Mercurio says. “But secondly and more importantly, the ownership level goes way up. Too many managers miss that. They tell people what they have to do instead of letting their people tell them what they are going to do.”

By taking this approach, Mercurio was able to find jobs for people in the company who didn’t fit in their previous roles.

“So instead of them going elsewhere to seek employment or us letting them go, we decided because they were talented, because they were eager and we felt like they were motivated and objective-driven, we put them in a different role,” Mercurio says. “They are flourishing. They love it, and we’re getting from them the effort and result we need to be successful.”

Take responsibility

Mercurio did not miss many opportunities to get in front of his people and in front of potential clients and customers to talk about the future of Vanliner Insurance Co.

“I did most of the large sales calls with some of our salespeople with me, I did all the shareholder presentations to the various Vanliner boards, I was the speaker on most of the agendas at the conferences for the major moving van lines in the country,” Mercurio says.

“I was the one out shaking hands. It certainly wears on you, and ultimately, I probably could have spread a little bit of that out. But we were going to have a certain complexion in the marketplace and I wanted that to be my responsibility.”

It’s one thing, of course, to be exuberant and excited about your company and polished in your speaking style. If there is no substance behind it, no results to match your promises, it will wear thin with your people very quickly.

So if the pressure had not eased and the work had not gone from overwhelming to just busy as Mercurio had promised it would, he would have had a problem. Fortunately for him, his vision came true.

“The claims group really had it tough for a while,” Mercurio says. “But we just asked them to hang in there and it was like clockwork. Once we reached that six-month mark, the number of new claims coming in was dropping dramatically and the number of files that were closing was going up dramatically. It was shrinking by the day and they could feel it. They felt the relief.”

As he looks ahead, Mercurio says he prefers “urgent” over “running scared” when describing his philosophy on how he and his employees get things done.

“If you’re urgent about what you’re doing, you’ll succeed in our organization,” Mercurio says. “We have a saying that I’ve used for a lot of years. Effort keeps you in the lineup. If you work really hard, you’ll stay in the lineup. But results move you up in the batting order.”

How to reach: Vanliner Insurance Co., (800) 325-3619

or www.vanliner.com

The Mercurio File

Tony Mercurio, CEO, Vanliner Insurance Co.

Born: Lorain, Ohio

Education: Bachelor’s degree in business and economics, University of Mount Union, Alliance, Ohio; MBA, Cleveland State University

Who has been the most influential person in your life?

My father, who passed away a few years ago. He was never afraid to take a risk. He ran a lot of different kinds of companies and tried a lot of things. He was never a 9-to-5 guy. It was a different time and different types of businesses that he ran. It was probably more that I saw him be excited about what he did for a living all the time and live it.

I don’t mind being defined at least somewhat by who I am at work and what I do for a living. That was my biggest lesson. You can enjoy what you do and be successful at it, even if it wasn’t being the starting left guard for the Cleveland Browns.

What did you love about playing football?

Football is hard. I love that not everyone could do it. Everybody has a different role on each play. They all have different steps to take each day but in the end, if we want to score more points than the competitor, everybody has to do their job.

How do you relax away from work?

My wife and two kids, that’s just been a blessing. I married up. Beyond that, just a couple of personal things.

I used to think I was an athlete back in my college years and maybe my first few years after college. These days I don’t feel that way, and I don’t care necessarily if I run fast. It’s the mental release and the confidence that I get out of exercise.

Takeaways:

Take the time to get your plan in writing.

Don’t underestimate the abilities of your people.

Don’t promise what you can’t fulfill.