Florida firm's outstanding growth depends on
its commitments to four constituencies
By Thomas A. McCoy
At a dinner honoring Oswald Trippe and Company as the 2002 Rough Notes Magazine Marketing Agency of the Year, Tom McCoy (center), editor-in-chief, presents the award to Oswald Trippe executives (left to right): John Pollock, president; Gary V. Trippe, CEO; Kim Anderson, vice president; and Wes Brewer, vice president.
When Gary Trippe, CEO of Oswald Trippe and Company (OTC) of Fort Myers, Florida, and his wife, Gay, started an agency from scratch in 1982, they initially ran it from their home. Today the agency produces $14.5 million in annual revenues, operates eight offices around Florida with 110 employee-owners, and is the winner of the Rough Notes Marketing Agency of the Year award.
At the beginning, Trippe might not have foreseen that kind of success. Or maybe he did--because Trippe and his partners have always been goal-setters and planners, quantifying their goals and measuring results. The agency's current targets: $20 million in revenues by 2005 and $40 million by 2010. Based on last year's results and 21 years of progress, the agency is on target to reach those goals.
For OTC, the key was, and still is, relationships--both inside and outside the state of Florida. The first important relationship took Trippe from Florida's east coast to its west coast, but the road went through Ohio.
In 1981, Trippe was president of D.R. Mead and Company, a large Miami-based agency founded in the 1920s and headed by a prominent Florida family. He had been there for 10 years and had earned the trust of the Mead family as the only non-family member ever to serve the agency as president. "I wanted to buy the agency, but I was unable to purchase more than a minority interest in Mead," Trippe explains. "Because of my contractual obligation to Mead, I decided to look for opportunities outside the Miami area."
Through Mead's affiliation with Assurex, Trippe met Jim Pender and other members of the James B. Oswald Company, a Cleveland-based agency. Mead was partnering with the Ohio agency to service a Southwest Florida mini-conglomerate account.
"As part of our commitment to this major client, we agreed to establish an agency in that area to handle their account," Trippe says. (Fort Myers is on the Gulf of Mexico coast, across the state from Miami.) "In March of 1981 I suggested to Jim Pender that we start an agency in Fort Myers and told him that I had found the man to head up the operation--it was going to be me." The two men shook hands, and the blueprint for OTC began to take shape. Gary and Gay were to be 50% owners and would move to Fort Myers to run the firm. The James B. Oswald Company would own the other 50%.
Gary V. Trippe explains to the audience of agents and Rough Notes executives how Oswald Trippe and Company's basic business model has carried the firm through 21 years of growth.
For the first couple of years of OTC's existence, the mini-conglomerate account provided about half the agency's income. Trippe, the only producer at that time, was spending as much as 70% of his time on the account. Then, in 1983, he learned that he would probably write the account's business for only one more year.
"Since we received our income from that account on a monthly basis, we set a sales goal of replacing that income each month with new business," says Trippe. "In retrospect, losing the account was the best thing that ever happened to OTC. It enabled us to spread our business, so that today we don't have a single client that represents more than 1% of our revenue."
That diversity in revenue stream is a characteristic that pervades all eight branches of the agency in 2003. Doug Fields, senior vice president in Weston, writes real estate accounts, wholesalers, distributors, manufacturers, hotels, office buildings and physician groups. Wes Brewer, vice president in Fort Myers, has a large broadcasting account and is heavily involved in the citrus industry, writing growers and harvesters, but also homebuilders and condominiums.
Other important business segments for the agency are condominium associations, construction, broadcasting, small businesses, the hospitality industry, architects, engineers and attorneys. The agency also has a healthy mix of personal lines business (32% of revenues) as well as benefits and financial services (10%).
But the overall strategic direction of Oswald Trippe and Company is not focused on individual lines of business. It is focused, instead, on four key relationships: their clients (and prospects), their insurance company partners, the communities they serve, and their employee-owners.
The focus on employee-owners is not hard to spot. In 1994 the Trippes sold approximately 60% of their shares in the agency to a newly established ESOP (Employee Stock Ownership Plan). Then in early 2002, Gary Trippe took another step in relinquishing control by naming John Pollock, age 33, president of the agency.
Maybe it was Trippe's memory of serving as president, at age 35, of D.R. Mead and Company (an agency where the senior principal eventually would work well into his 80s). Or maybe it was just his utter confidence in Pollock's abilities. But Trippe believes that his own vision for Oswald Trippe and Company is in good hands with Pollock. And he also believes that the ESOP provides the kind of incentives and cultural cohesion that this fast-growing, multi-branch agency needs.
"We're very proud of all our employee-owners," says Trippe. With John Pollock and the other leaders of the agency we've been able to enhance our business model, but we've stayed with that same model for 21 years. We're good planners, and we're very focused."
Kim Anderson, OTC's vice president in Naples, says: "John Pollock has done a fabulous job of mirroring the culture that Gary began. When Gary and Gay attended company picnics, they would always eat last, after they had greeted every employee and their families. John Pollock takes the same approach. He learns the name of everyone's spouse and their children, and tries to keep up with what's going on in their lives."
Anderson was a senior vice president at Sedgwick before coming to OTC, handling large out-of-state accounts and traveling extensively. Leaving Sedgwick entailed some risk for her because she had a non-compete contract and had to begin working from scratch for OTC.
"It was culture shock," she says--partly because she switched her focus to local business, such as condominium associations, but also because, "Oswald Trippe makes such an incredible commitment to its employee-owners."
The ESOP is at the heart of that commitment. "Every year since the ESOP was created, the agency has been appraised by Marsh Berry," says Pollock. "The stock has appreciated more than 20% per year. Gary travels to all the branches and meets with every employee-owner to show them the vested value of their stock. With the national stock markets declining so much in the last three years, the value of the OTC stock looks good."
A little more than 30% of the agency is owned by the ESOP. Gary and Gay Trippe own approximately 10%. The James B. Oswald Company in Cleveland is OTC's largest shareholder (45%). The remaining OTC shareholders are John Pollock, and Senior Vice Presidents John Belisle in Fort Myers and Doug Fields in Weston.
The commitment to community--and for OTC that means eight separate communities--is evident throughout the organization. Its Web site (www.otc1.com) lists 31 separate charities and civic organizations and 11 chambers of commerce in which the agency's employee-owners are involved. Trippe and Pollock set the pace for the agency with their leadership positions in several community organizations. They also are active in several annual fund-raising efforts, including favorite charities of other employee-owners. In addition, OTC created a Community Service Award that recognizes the community involvement of two employee-owners each year.
OTC's community involvement has been a perfect fit for Anderson, a Naples native who is right at home doing business on a local playing field. "Oswald Trippe is such an incredible community partner, and that really tugs at my heartstrings," she says.
Anderson already had made the ultimate commitment to her community before joining OTC. She served as mayor of Naples in 1991 and 1992, capping off eight years of service on the city council. "During the time I was mayor, we had a lot of significant agenda-setting issues to consider," she says. "Then, in addition to my political responsibilities and my work with Sedgwick, I inadvertently added another complication. During each of my four-year terms on the city council, I delivered a child."
Once at OTC, "My political experience proved to be an asset," she continues. "Oswald Trippe was the new kid on the block in Naples, and people knew me." Since she joined the agency in 1995, the Naples office has grown from five employee-owners to its current nine, including four producers.
Former Rough Notes Marketing Agency of the Year executives gather to honor the 2002 winner. Left to right are: Glenn R. Day, executive vice president, CFR, Inc., Tulsa, Oklahoma; Chris McVicker, CEO, The Flanders Group, Pittsford, New York; Lois Van Horn, CEO, Athens Insurance Center, Athens, Georgia; John Love, director, AH&T Technology Brokers, Leesburg, Virginia; Kim Ross, marketing manager, Universal Insurance Services, Grand Rapids, Michigan; Robert G. Phelan, CEO, The Litchfield Group, Torrington, Connecticut; D. Stephen Titus, president, The Rule Group, Pasadena, California; and Karl Thomason, vice president, Prime Financial Services, Jonesboro, Georgia.
Relationships with clients and potential clients are always uppermost in the minds of OTC's employee-owners. When the mini-conglomerate account was lost during the agency's second year of existence, Trippe not only refocused on other business opportunities, but also maintained ties at the original major account with those who could help the agency later.
"Twenty-one years later, we still receive referrals from people we knew in connection with that account," says Trippe. "I often say that the referrals and long-term relationships with them have been more beneficial to the agency than if we had retained the original account."
Attorneys, architects and engineers also have been important to OTC, both as clients and centers of influence. "I became an associate member of the local engineering society and the AIA. This helped me understand what was going on in the community," says Trippe. "We sponsored loss-control and continuing education seminars for attorneys in Fort Myers with the help of our insurance company partners. Sometimes the national brokers weren't willing to provide this kind of extra service, and it's paid off for us."
OTC started out as a 100% commercial lines agency. However, it soon found a way to write personal lines effectively--again utilizing centers of influence. Today there are producers in each branch specializing in personal lines.
"In 1983 we hired a personal lines producer, John Brandt, who was moving to our area from Iowa," Trippe explains. "I was writing the master policies on condominium associations, so we started taking John with us to meet the needs of the unit owners. In some of those associations, 80% of the unit owners are still clients of the agency.
"John would build relationships with real estate brokers, mortgage companies, law firms and title insurance companies. He would deliver donuts or bagels or provide lunch--whatever would fit into their schedules. John had a five-minute message, telling them what OTC would do to make them look good and how we could provide exceptional service for their clients. We've been following this same approach in personal lines for 21 years."
Walter J. Gdowski (right photo), CEO of The Rough Notes Company, speaks to a group of agents whose firms previously have been honored as Marketing Agency of the Year (left photo).
Doug Fields is a walking testament to the value of client relationships. He has the agency's largest and broadest book of business and has been able to work entirely from referrals for the past 17 years. He admits that taking renewal proposals to clients this last year has been challenging.
"The biggest increase I had on a large account this last year was 70%. But that client trusted us, and stayed with us," Fields says. "Sometimes our relationships with our insurance company partners allow us to help out clients in ways that other agencies can't." He adds, "Because of the catastrophic property exposures in Florida, we're used to educating clients about the reasons for rate increases."
The eight branch offices of OTC function as one unit for many reasons. Communication is maintained via a monthly newsletter, providing personal information about employee-owners throughout all the branches. Agency principals visit the branches regularly, and producers are linked via phone conferences and off-site meetings.
For the last two years the agency has hosted strategic sessions involving all producers and the agency's leadership. The meeting, at an island setting, Anderson explains, "helps us map out our plans for the coming year and learn more about each producer's specialties, so that we can go to another member of the team for help when we need it. It's just part of the important commitment that the agency makes to help each individual exceed his or her goal."
OTC further maintains its culture by bringing in its own employee-owners when a new branch is established. The Cape Coral and Tallahassee offices, both opened last year, and Weston and Sarasota offices, opened in 2001, were all starts-ups. "We've really had only a few small acquisitions in our 21-year history," says Pollock.
To establish the Weston office, which is located about 50 minutes' driving time from Miami, OTC brought in Doug Fields, who began his career in the Miami office in 1985. Then OTC added two producers.
"We have a wish list of locations for future branches," says Pollock. "But we don't go into an area until the opportunities are right, with the right employee-owners available to run the offices. Our insurance company partners help us in identifying opportunities for our expansion."
The OTC branch office that may prove to be the most different is its most recent start-up in Tallahassee. "It's not in a coastal area, as are the other branches," says Trippe, "so there isn't the opportunity for condominium business that we're used to. We'll still follow the OTC model and tweak it to meet the needs of the clients in that community."
The OTC model starts with goal setting. "Every producer develops a business plan that establishes specific goals for the coming year," says Pollock. "Then those goals are closely monitored each month." The goals are designed to collectively produce the desired agency growth rate, which has averaged better than 15% per year for 21 years.
"We also utilize outside experts, including Roger Sitkins, to train, educate and motivate our producers to be the best they can be," he adds.
A strategic initiative team--which includes Gary Trippe, John Pollock and Senior Vice Presidents John Belisle and Doug Fields--meets once a week, either face-to-face or by conference call, to make sure the agency stays focused on its strategic plan.
Trippe's overall vision of how to operate an agency hasn't changed, even though it has moved from three full-time employees to 110 employee-owners. "Many people in our business have a tendency to start in one direction and then veer off, losing focus," says Trippe. "We try to avoid that through careful screening of prospective employee-owners in the hiring process. We have very little turnover of producers. We look for compatibility with our culture."
"The distinctive thing about us," Pollock summarizes, "is that we've kept the same business model for 21 years. We simply refine it and try to make it better. We help all employee-owners to be the best they can be. We just keep on doing what we do well." *
Agency of the Year award
The Rough Notes Marketing Agency of the Year award, presented annually since 1990, recognizes one of the agencies featured on the cover of the magazine during the previous year as the most outstanding overall firm. The winner is determined by votes of one owner from each of the Rough Notes cover agencies from prior years, stretching back to 1989. This "electoral college" includes a total of 144 potential voters.
Oswald Trippe and Company received votes from agency principals in all regions of the country. Voters praised OTC's planning process, their commitment to their communities, their integrity and professionalism. One voter summarized by saying, "They do the right things consistently."
Representatives from the majority of past winners of the Agency of the Year award attended the 2002 award presentation along with Rough Notes editors and executives in Indianapolis.