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Marketing Agency of the Month 425 entrepreneurs Oswald keeps the spirit alive through rapid growth By Dennis H. Pillsbury One of the most difficult tasks for independent agencies is managing growth so that talented people don’t become frustrated by the need for increased management as new offices are opened and new people are added. The Oswald Companies in Cleveland, Ohio, faced that problem early on when it was approaching the end of its first century in business. In 1991, when it was 98 years old, the company saw an opportunity to expand geographically and established a sister company, Oswald Trippe & Co., in Florida, that was co-founded by Oswald’s James R. Pender and Gary V. Trippe. Despite the wide geographic spread, the agency was able to keep the entrepreneurial spirit alive while enjoying exceptional growth. The agency has tripled its revenue in the last six years. “And that’s been almost entirely organic,” Dave Jacobs, chief operating officer, points out. “There were a few small acquisitions,” he adds, “but they added only a few percentage points to our revenue. We jointly ended 2006 at $55 million in revenue and will exceed $65 million by the end of this year.” David O’Brien, president, adds: “One of the primary jobs of the management teams is to develop and communicate our vision and strategy. This is especially important as we continue to grow. We now have 425 people in 15 offices throughout the Midwest and Southeast [including the offices of its sister company]. So the vision can’t just be our vision. We have to have the buy-in from our employee-owners. They are the people who have to execute the strategies. “We are nearly 115 years old with a unique culture that we value and cherish. And, because we are an employee-owned company, we all want and share in our successes. The ownership aspect has allowed us to remain entrepreneurial as we grow,” O’Brien says. Bob Klonk, executive vice president and director of group benefits, continues: “Maintaining our culture and core values is the key to the tremendous success we have enjoyed. The people we add understand our culture and want to be part of it. We’ve been able to retain very good talent and recruit industry leaders and exceptional people who want to work in an agency that offers an opportunity for ownership. Each individual here knows that he or she has an impact and is part of our success.” PIRC Chairman and CEO Marc Byrnes goes on to note that PIRC, the core values of the agency, are “instilled in all our people.” PIRC is an acronym for “passion for excellence; integrity; resourcefulness; and commitment to community,” he says. “Our passion for excellence means that we always go the extra mile for the client,” Marc points out. “We are never good enough and always strive to be better. When we recruit people, we look for the individual who has a desire for continual improvement, who is never satisfied and always working to do better.” O’Brien says, “Our integrity has always been a hallmark of the agency and starts from the top. Marc Byrnes and Jim Pender, our honorary chairman (and grandson of James B. Oswald, who founded the predecessor company, Creech-Oswald Company in 1893), exemplify the level of integrity that permeates the agency.” Marc says, “The resourcefulness stems from the entrepreneurial spirit that is found at all levels of the agency and grows out of our insistence that the client’s interest always comes first. We stick to that at every level of the agency. It is one of the reasons we have been such a creative agency, developing new products and services for our clients.” “All our people are encouraged to become involved in organizations that support the community in which they work or in which a client may be located. If there’s a client in a market where we don’t have an office, but wants us to support a good cause, we usually will. We set an overall budget for community commitments every year that represents a significant share of profits,” Marc continues. “We have monthly meetings led by one of our executive vice presidents, Bill Brancovsky, and nonprofit team leader Kathy Miller on commitment to community to evaluate where we are and to look at new opportunities that may come our way.” The Oswald Companies is a Pacesetter for United Way. Marc serves as a member of the board of directors and campaign chairperson. Oswald’s employee-owners sit on some 40 boards of local charities. “We give in terms of time, effort and money,” he concludes. Client-first strategy The agency was built on a philosophy of “caring for its clients’ and employee-owners’ needs, today and tomorrow,” and that has been maintained to the present day. While there have been many changes, they have stemmed from a desire to better fulfill this promise. Some of the key changes, include: • Being selected as a member of Assurex in the early 1980s so “we could better serve the growing need of our clients for nationwide and international coverages,” Dave Jacobs points out. Jim Pender served as chairman of Assurex in 1988. • Merging with Marc S. Byrnes & Associates Agency, Inc., in 1987, in order to begin providing life insurance, group medical coverage and employee benefit programs to its clients. Marc was named president of Oswald following the merger in 1997 and then became CEO in 1998. Since he joined the firm, he has recruited the next generation of leaders, including Bob Klonk, Dave Jacobs and Dave O’Brien. “The benefits division developed rapidly,” Marc points out, “nearly doubling in every year following the merger. Today, it accounts for half of Oswald’s total revenues in the Midwest.” • Establishment of Oswald Financial Inc. (OFI) in 1999 to provide services in the qualified and non-qualified pension plan arena. OFI is under the leadership of David Kulchar, who has extensive expertise in the pension area. The agency also formed Oswald Specialty Life to provide estate planning, charitable planning and business planning services for high net worth individuals. Under the leadership of Jeff Wasserman, this has grown to be one of the preeminent individual life and estate planning firms in the country. • Establishment of Oswald Specialty Risk Services LLC (OSR) in 2000 to provide assistance in the management liability field. This was a joint venture with Robert Spofford of Boston. OSR has expertise in D&O, environmental and other forms of management liability coverages. • Following a strategic planning session in 2001, the agency determined that it needed to better position itself for perpetuation by restructuring into four operating business units: Group Benefits, Retirement Plan Services, Property and Casualty, and Life Insurance and Executive Benefits. The directors of these four divisions serve as key members of the management team. “During the 2001 strategic planning session we also determined that we needed to concentrate on developing niches in certain markets and then begin geographic expansion within those niches,” Dave O’Brien says. “In order to accomplish this objective, we realized that we needed to have resources available to clients in the niches we identified that were unmatched by any of our competitors,” he explains. “For the next five years, we concentrated on building our intellectual capital in order to bring more value to our clients. We did not hire any sales people per se, but instead added people with expertise in the niche areas or in important service areas like claims management and loss control.” The results have been impressive. “We are seen as trusted advisors and that is reflected in the fact that our growth is driven by referrals and reputation, not on pure sales,” Dave Jacobs points out. “Our clients regularly refer people to us.” Bob Klonk adds, “Our customers come from organizations that are fed up with the status quo. They are looking for an agency that will work with them to reduce their risk transfer costs and provide solutions, not promises. We deliver results. “Our CURE™ program is a recent example of the kind of solutions we provide,” Bob continues. “It is not a cookie-cutter approach where we took one service and labeled it a wellness program. It is a comprehensive program that includes incentives for employees to become healthier and provides them with the tools to do so. We spent years building CURE.” CURE stands for cost control, utilization improvement, risk reduction, and education and engagement. (For more information on the CURE program, see the article, “Start with the Carrot: Wellness Comes of Age,” in the April 2007 edition of Rough Notes.) “We’ve also helped private equity clients with due diligence mergers and acquisitions,” Bob continues. “And we have a comprehensive package of tools designed to help clients reduce their workers comp costs while reducing their health care spending. We find very few competitors for the value we deliver to our customers,” he concludes proudly. Building the team Dave O’Brien says that, in the end, “it’s all about people. What we’ve done is retain very good talent and recruited industry leaders and exceptional people. A lot of people have joined from larger organizations, attracted by the opportunity to be with a successful, growing agency where they can have ownership. They know they have an impact and that’s been a very appealing characteristic of our agency. It is a challenging environment that is highly intellectual and highly technical. For the right person, it’s a perfect atmosphere in which to work. “We, and that is the operative word in all our dealings, strive to be industry leaders. To accomplish that we have people with great depth of knowledge about a specific industry or product,” he says. “No one tries to do all things for their client. We work in a team structure that best utilizes the specialists we have in each area of expertise.” O’Brien continues: “We’ve recruited many young people right out of college, placing them in a two-year training program where they are rotated through different practices so they see and appreciate how each area interconnects with the others. As a result, we have a fairly young team that includes 50 people under the age of 27. We have made a significant investment in teaching. “We’re fairly choosy in the way we hire,” he adds. “We have gone to different campuses in Ohio, looking for entrepreneurial young people with good work ethics who have majored in finance or business. As this has grown, we have developed a kind of farm system where the young people who work here recommend someone else from their college or university who has a similar drive and desire to succeed. “We’ve found that we have greater success with a trainee if they have some history with the agency or an employee-owner who already works here,” he explains. “We also bring in young people as summer interns while they are still in school. A number of our Professional Associates started out as interns.” O’Brien concludes: “Our vision and model is that all offices operate similarly, although each may have different areas of expertise. For example, our health care practice leader is based in our Minneapolis office; the logistics niche is handled out of Middleburg Heights, and so on. But each of these areas of expertise is available to all the offices, so they can be called upon whenever any of our associates needs help with a client or prospect anywhere in the country. Dave Jacobs adds: “We are able to accomplish this by having regular meetings with our people. I meet with the practice leaders in each office to work on building a strategy across the country. We also have regular ESOP meetings and everybody is invited. And we have regular conference calls with the offices and go over what is working and what are the challenges. “This sharing of information has been key in helping us develop solutions for clients, as well as catching emerging problems early,” Jacobs says. “It really is a company where everyone is a leader working as part of a team. The meetings result in a cascading of our message and a consistency that many smaller organizations envy.” Marc Byrnes notes: “We are communicative, collaborative and collegial.” He summarizes: “Recruiting talented young people who can achieve leadership roles in the agency will allow us to remain independent. Bob Klonk has become one of the leading benefits advisors in the country and well deserves to be part of our executive team. Dave O’Brien and Dave Jacobs, prior to their promotions to president and COO, respectively, led our property/casualty division to great success. These are the people who will take us forward and keep us independent as Jim Pender, our CFO Bill Leonard and I pass the baton. These young people represent the next team of leaders that will guarantee success for The Oswald Companies Companies going forward.” Oswald Companies is the 45th largest agency in the U.S. and in the top 25 of privately held agencies, and has created a structure that assures it will remain independent, but probably continue to move up. Rough Notes is proud to recognize Oswald as this month’s Marketing Agency of the Month. * |
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