It’s wondrous when Cinderella’s slipper fits a lesser-known or underdog athlete. But when the elusive footwear snugly fits an entire team, it can captivate the attention of a nation. Such was the case in 1991 when the Atlanta Braves took Major League Baseball by complete surprise and made it to the World Series. After all, the previous year the Braves lost over 100 games, more than any ball club in the League.
Before venturing further with this tale, I am aware that I am writing for an insurance publication – not the sports page. But this story carries tremendous parallels and lessons for an industry that is, in some ways, experiencing its own waning season.
Two decades ago, the turn of events for the Braves was a testament to the power of creating the right team. It started with aligning the ideal blend of athletes. It also took a manager with the drive to change powerful dynamics that could keep individuals tethered to an old way of doing things.
This legend began to unfold when a couple of youthful pitchers named Tom Glavine and John Smoltz blossomed. Young sluggers David Justice and Ron Gant emerged from the Braves’ minor league system and immediately hit their stride. Several veterans were acquired from other teams. And, most important, manager Bobby Cox stepped into the dugout, assuming his first full year at the helm.
With this combination, season-long magic happened on the field. In a dramatic series with Pittsburgh, the Braves came from behind and won in their final at-bat to claim the National League Championship. That the Braves then lost in the seventh World Series game to Minnesota barely dulled their accomplishments. By the end, Atlanta had been crowned America’s team.
This year marks the 20th anniversary of that worst-to-first club … which brings us back to the present and the insurance industry today. As we peer into the future, let’s ask ourselves how we can create the Cinderella team that will take us there.
Redefine your concept of team
I believe the days of completely independent agencies are numbered. They just do not have the resources to meet changing client and industry needs. Technology and scale are essential components. Also crucial: a sophisticated communications and operations platform, as well as health care reform and compliance expertise to name but a few. This list continues to grow as innovative firms reset the bar which migrates directly to employers’ growing expectations. It requires strategic focus, size and money to gain these assets. If you don’t have them in-house, you must align with organizations that can provide them for you.
Essentially, your team is no longer the people on your payroll. You must look beyond the walls that have defined your company up to this point and expand through partnerships, mergers, outsourcing or acquisition. It’s a huge shift in perspective and involves letting go of the past. The traditions that brought you this far will not work for you tomorrow. Think of it this way: the Braves never would have made it to the playoffs with the same roster that comprised their 1990 club.
Have a winning vision
Do not view your firm as a victim of circumstances. If you know what outcome you desire, you can seize control over your destiny. In recent years I have talked to hundreds of agency owners considering their next move. While there are numerous options to consider, for the purpose of this article, I am limiting the scope to acquisitions.
Those willing to be acquired generally fall into two camps. I call the first group short-timers. They want to maximize the investment they’ve made in their business. Their objective is to make a lot of money and retire or significantly slow down. The second group has a longer-term vision and is focused on the next phase of their career. They have passion for the business, feel they have a contribution to make, and they want to stay in the game. Determining your position on this spectrum will clarify next steps.
Show me the money
If you are in it for the short-term, there are outstanding options to consider. Many big companies are currently in acquisition mode and have the capital to buy successful enterprises. Phase-out deals with owners are usually part of the formula, often structured over a two-to-four-year period. Money is exchanged up-front, and again at the end of the transition, based on interim performance. These tend to be lucrative financial deals and are ideal for proprietors seeking an exit strategy.