Fred McClaine, executive vice president, Brown & Brown of Indiana Inc.
Fred McClaine wasn’t sure he wanted to go work for a big company. He was an entrepreneur who owned his own insurance agency, and he was being courted by Brown & Brown Inc., one of the largest independent insurance intermediaries in the country.
As with most buying and selling experiences, the buyers and sellers spent time going over the offers and other considerations.
“When I met [executives] J. Hyatt and Powell Brown, they brought us down to their headquarters, and we stayed overnight at their house, which I thought was kind of unusual,” McClaine says.
Even though he had received better offers, he wanted to see this one through.
“But that’s when I met them and really got to know them as people. We ended up signing with them because they were insurance people.”
McClaine knew the business, and he knew how to spot a buyer who was in it for the long haul and the love of serving people’s needs versus one who was out to make a quick buck.
“Because we are a different kind of business from a bank or financial institution, we have a lot of fluctuations over the years, and to have someone at the top who understands the business and who says it’ll all work out – that’s important,” he says.
While McClaine was impressed with the leadership’s positive attitude, that wasn’t his only surprise.
At McClaine’s first annual sales meeting, in 2009, he got to experience a tradition that was an effort to get people to let their guard down – a toga party.
The tradition of a Brown & Brown costume party began in 1993 when a merger with Poe & Associates was completed and the integration had started. Some of the Poe top brass was let go since their leadership style wouldn’t be a good fit. About 20 other potential leaders were identified and kept on board.
“They were entrepreneurs at heart, and they were brought into a room of about 20 of our top people – 20 of their top people and their wives, in a hotel,” McClaine says.
“They were all ‘suits and ties’ and everybody was looking good. Hyatt said, ‘OK, guys, the men come with me and the women go with my wife; her name is CiCi,’ and they separated in different rooms. In those rooms were togas. Hyatt said, ‘Everybody strip down and get into your toga, and we’ll go back into the room and have a party.’ So they did.”
The custom of a costume party has lived on ever since.
“That’s typical of how the company culture was derived,” McClaine says. “He came into the room and said, ‘We were all dressed differently when we got here, we were all different people, and we are now all looking the same. And we’re going to be that way.’”
McClaine says the event was it was not only symbolic of combining the two companies but costume parties such as this were more of a humility thing than anything else.
“We want to have humble people who understand how to work with staff members, because we have a real range of incomes in the business – that’s just part of our business.
“I think the experience does keep us in place, to be able to work with others. Every day those people are out there making your life better.”
Here’s how McClaine, executive vice president of Brown & Brown of Indiana Inc., takes the principles of a “let your guard down” company culture to help drive the sales of the $1.2 billion, 6,300-employee company.
Try writing a culture statement
Most companies have a mission statement. It tells about the company’s ideals. But boiling those ideals down to two or three sentences about your standards, expectations and goals can end up with a statement of unproductive phrases.
With a culture statement, it can define who you are, and it can set the principles of a unified group.
If you are an existing company, start by listing observations of success that have worked in your company in the past. Brown & Brown has been doing that since it was founded in 1939, and its culture statement is now a booklet.
“The company culture is an intangible mosaic of history, ideals, goals, sayings, signs, quotes, fables, aspirations and event which considered together, present a body of thought that is central to understanding the essence of our company,” says McClaine, quoting from the culture statement.
A major advantage of a culture statement over a mission statement is that the mission likely will stay the same over the years, but the culture can breathe, evolve and adapt over time. Take for example when a new acquisition is made … some points of their culture may be worth assimilating into your statement.
“Probably half of our culture statement has been developed newly since I have been here,” McClaine says. “Those who were responsible for some of the things that have been added are the people who have joined us. We look at every acquisition that we make and what are their strengths and how we can bring that into the whole culture of Brown & Brown. The culture has been designed over the years by taking in the strengths from the ones we have acquired and casting out the weaknesses that we had or they had to make us all stronger.”
Your company leader needs to support the continuous improvement in the culture statement.
“Hyatt came up with a lot of the sayings and the culture,” McClaine says. “Over the course of time, it’s been pushed out to all of us. Most of us really enjoy it but 80 percent of the leaders of the 190 branches across the country were entrepreneurs to begin with.
So we brought those guys in, taught them, and gave them the culture that they can buy into which is independence, decentralization, and making your own decisions but still turning a profit for the company.”
While McClaine bought into the culture fairly quickly, he says most people will decide within two or three years if they are going to buy into it or not.
“In terms of acquisition, we don’t acquire them if they aren’t a good fit and if it is after the acquisition that we made a mistake, then they will either get a different role or no longer be with us,” he says.
“It’s few and far between that those decisions are made but those do occur and sometimes after they are here three or four years; they figure it is not the right thing for them and they go their merry way.”
Know all about your acquisition
Integrating a merged or acquired company can be made a lot easier if a good fit is determined beforehand. And the real emphasis on whether it is the right fit is on the people. While there are other obvious concerns to be considered, such as financial and geographical benefits, it’s the people that deserve the most consideration.
“If your company has an entrepreneurial spirit, look for one that is in a similar entrepreneurial spirit to yours,” McClaine says. “You have to find somebody who hasn’t been in a stodgy, power-down kind of situation but has been in one of entrepreneurship.”
Should your company be more vertical, with decisions being made at the upper level and followed all the way down, it is a different story.
“If they are into making all the decisions at the top, and you want a company that’s ‘Here’s the manual, here’s how you run the place,’ then you’ve got to look for people who are used to that, who would have been in that kind of structure before.”
Look for a fit in the same kind of style of business more than anything else.
“Ask, what’s your style? Is it entrepreneur? Is it top down? Are you structured and rigid in your accounting principles and everything you do? McClaine says.
The chances that you will find a fit are often not good.
“Maybe three out of 10 will fit,” he says. “The year they acquired our agency we looked at 920 possible acquisitions across the country. We made 43. So, not everybody fits. You may have to walk away from some deals when you don’t think it is going to work. I would say sometimes make a decision more with your gut than with your head.”
When assessing the nature of the possible acquisition, look at the character of the company.
“Review their reputation,” McClaine says. “If you know them, you should be able to get recommendations from fellow companies about their honesty, their integrity, basis of who their clients are, and that they are a good fit for those statements.”
“We are looking for people who look like us, I suppose. And not everybody does, but we try to find them.”
Teach the key principles
Many say the most important thing that all employees new to the fold need is some type of training. It can be as elaborate as Brown & Brown University that was created five years ago to teach the skills or in-house training programs.
Whatever it is, three areas need to be addressed, according to McClaine.
“The biggest thing that you need to teach to your young staff is to listen to people,” he says. “When you learn the most about your businesses is from people and listening to what they have done and how they’ve done it.
“When to listen is one of the things that separates the big boys from the small boys,” McClaine says. A sale can be lost by an associate who doesn’t let the customer talk.
Another important aspect of learning the culture is the teamwork part.
“You feel like you’re part of a team. The team is part of the pack. The support people know that all they can do to help a producer to be successful is to go and help the pack. They have bought into the idea that we have to help a new client either save the money or find a better product. It brings the team together.
Celebrate the successes of the teams. This is a time to observe your good showings.
“When we announce a new sale or acquisition, we get cheers,” says McClaine, who is the de facto chief cultural officer in Indiana. “We do a cheetah growl across PA system. We sound the bell; maybe we have a party. So we do things that bring them all in. We understand that that’s a big deal, and so they are happy when deals occur. The culture of doing that is bringing the pack together of those who really help you, reward them and bring sales in the door.
Another part of your culture is employee retention. While many advisers suggest that financial reward motivates employee service, there is an intangible that helps, too.
“One of the things that does help to keep people on the job and make more things stable is to say you are built forever,” McClain says.
It takes committed and disciplined people to focus on forever.
“We’re built to last; that’s another saying that we have,” McClaine says. “We will continue to acquire and grow and grow. But others will be acquired by someone else.
And so as the people go, the culture goes, then that drives them to hang around because they don’t feel like there is going to be a big change.”
How to reach: Brown & Brown of Indiana Inc., (317) 228-3773 or www.brownandbrownindiana.com
The McClaine File
Executive vice president
Brown & Brown Indiana Inc.
Born: Greencastle, Ind. In southwest Indiana, between Indianapolis and Terre Haute.
Education: Indiana State University in Terre Haute. I majored in in marketing with minors in economics and accounting.
What was your first job?
Selling “Grit” magazined. I sold it for 20 cents a copy and made seven cents. It was a great rural magazine. I met my future wife at 13 when I started working for her father as a hod carrier. I know I didn’t want to do that the rest of my life.
What was the best advice you ever received?
Not everything is black-and-white. I got that from a guy who ran a large multinational company. I was in my 20s back then and when you’re that age, you think everything is either black or white but there’s a lot of gray out there so you have to learn about that.
Who do you admire in business?
J. Hyatt Brown is definitely the guy who I admire the most after seeing a lot of different people in business. He one smart guy and has the most energy at 73 that I know of anyone. What I love about jim is that when you talk to him, no matter if there are 100 people around you in the room, he listens to you. And he asks really great questions about you personally. That to me is symbolic of his humble nature, and who he is. He’s chairman of the board.
What is your definition of business success?
Balance between life, family and God. I don’t think you can be successful in your life if you don’t have that balance. I think if people get too stressed or into their life, one or the other too much, you get too far one-sided or the other it’s just not good for your business.