EFFECTIVE COMMUNICATIONS IN REVOLUTIONARY TIMES

“Leadership & Communications in Shifting Times, Businesses and Platforms”John Kessler, SVP & Chief Strategy OfficerMay 16, 2019

DESIRED OUTCOMES

• Introduction • Motorists’ story of multiple transformations• Professional journey• Personal journey• Communication principles• Leadership principles• Lessons learned

• Founded in 1928 in Columbus, Ohio• Affiliation business model• Independent agent distribution • 5,000 agencies • 11 companies• 24-state operation• 1,200 associates• All lines of business • Premiums of $775 million

You know us.

COMPANY OVERVIEW: GEOGRAPHICAL FOOTPRINT

Transformation 1.0

“Story of an organization caught in operational mode; one that had evolved into a model that was no longer sustainable.”

• Silos across the organization• Disparate & antiquated systems (everywhere)• “Build” vs “Buy” mindset • Organizational & operational inflexibility• Inadequate WC capabilities• Inadequate analytics capabilities• Unclear market differentiation

Drivers of Change

Formula For Effective Change

D M P HF

TRANSFORMATION JOURNEY

Response: 2021 Vision“…one company with one vision, one mission and one set of shared values.”

Leader initiatedPositive & inspiringComprehensive & detailedShared & supported

Drives everything we do

Recognizes the need for both cultural and technological transformation

“Embrace the mindset of an 85-year old start-up company”

VISION

Dave Kaufman, Chief Executive OfficerMotorists Insurance Group

TRANSFORMATION JOURNEY

Market differentiators

Core capabilities

Culture

Endpoint vision

Intimate relationshipsQuality solutions

Customized services

Integrated teamingKnowledge sharing

Communications

TrustedResponsive

Abundance

The Change Process

VISION DIAGNOSIS DESIGN INTEGRATION

Vision Diagnosis Design Integration

INVOLVEMENT GAINING COMMITMENT

IMPLEMENTATION

• End In Mind• Ideal State• Desired Business

Outcomes• Desired Human

Outcomes

• Environmental Assessment (SWOT)

• Stakeholder Assessment

• Organization Assessment

• Critical Success Factors

• Mission• Strategic Direction

(5-10 yrs.) - 5• Strategies

(2-5 yrs.) - 31• Objectives

(12 months) - 350+

• Total Involvement• Activity & roles analysis• New goals, roles &

processes

TRANSFORMATION JOURNEY

• Build a diverse, thriving organization of empowered associates who are authorized, capable and motivated and united by shared values and beliefs.

• Expand our relationships, bond, brand and geographic reach with independent agents and the insurance consumer.

• Improve the fundamental insurance practices to produce and sustain superior financial results.

• Build and strengthen the core capabilities of integrated teaming, responsive communications, and knowledge management that distinguish us in the market.

• Reinvent and integrate our business infrastructure to ensure consistent delivery of customer value and grow profitably as one company.

As a start-up company we must make the bold investments to…

Motorists Insurance Group

Strategic Directions: 5-10 years

TRANSFORMATION JOURNEY

‘Purchase and implement a fully integrated suite for policy, billing, and claims processing for all property and casualty companies in the group.’

‘Maximize the Motorists brand presence and dominate the Commercial Lines marketplace by implementing a new commercial product portfolio, for aNEW COMPANY, using an integrated suite for commercial policy, billing, claims, and all necessary ancillary systems for all states within the Motorists footprint.’

Innovative (adj.) – producing something like nothing experienced or created before.

Conventional (adj.) – what is generally done.

STRATEGY REVISITED – TRANSFORMATION WITH A CAPITAL ‘T’

“Personal and organizational transformationis not changing what is…

…but creating what isn’t.”

Most important starting point of any transformation (and best predictor of success) is a CEO who recognizes that ‘only’ a new approach will dramatically improve the company’s performance.

And no matter how powerful the aspirations, conviction or determination of the CEO, there are still challenges to overcome organizational apathy.

LESSONS LEARNED – “TILTING THE ODDS TOWARD SUCCESS”

Keys to success:

• Articulate ‘why’ a transformation is necessaryo Explain the rationale and the desired outcome.

• Culture of engagement – engage every associate and integrate all activity into transformation.o Move from ‘command-and-control’ to ‘coach-and-empower’o Move from ‘build-and-push’ to ‘create-and-pull’

• Inspire and incentivize associates and customers.o All stakeholders need to understand the ‘why’, and the best way forwardo All stakeholders need to seem themselves in it

• Communication, communication, communication• Set realistic goals and understand that transformation takes time.

LESSONS LEARNED – “TILTING THE ODDS TOWARD SUCCESS”

Transformation 2.0

NEWEST AFFILIATION

• Established 2006 in Charleston, West Virginia• Mutual organization• Independent agent distribution• 16-state operation• Five companies• 500 associates• Workers’ compensation specialist• Premiums of $375 million• Assets over $2.3 billion• Offices in Charleston, Charlotte, Naperville and Pittsburgh

BRICKSTREET MUTUAL INSURANCE

MOTORISTS INSURANCE GROUP

“AFFILIATION OF EQUALS”

AFFILIATION JOURNEY

Challenges in Columbus5 years into a cultural transformation• Values, beliefs & leadership behaviorsChanges in leadership rolesAcceleration of difficult decisions• Consolidation of redundant functions, staffing reductions,

closing of facilities, etc.

Challenges in CharlestonLeadership leaving & relocatingSense of lossCultural changes

Challenges across the groupFear and anxietyLoss of connection• Every leader feels that they bring value to

their role. But value is different than connection.

Trust fractured

MOTORISTS INSURANCE GROUP

2021 VISION

“Motorists Insurance Group is the most trusted and responsive insurance carrier in the independent agency system. • …over 15 companies • …annual revenues in excess of $1.25 billion• …grow profitably by expanding sales • …enable us to expand geographically • …dominate the marketplace with new product portfolio• …in the most preferred markets• …build advanced analytics capabilities• …offer superior workers’ comp capabilities

Initial reaction:• “Affiliation of equals” ran counter to Dave’s Vision• In reality, it was very much part of the Vision!

New Idea

CurrentPath

Transition&

Ambiguity

Decline

Future Path

“You cannot solve a problem with the same thinking that created the problem.” – Albert Einstein

Curve 1: Existing Path Curve 2: New Path

2021 Vision

MODEL FOR GROWTH

• Key to sustaining a healthy business is to transform to a new curve before the current one is too far in decline.

• Important to fight complacency and constantly “reinvent” your offering.

• “Sometimes the shortest distance between two points is a zigzag”

COMMUNICATION PRINCIPLES

• Transparency• All-in Meetings• Leadership Summits• Associate Engagement Survey • NPS• Deep Customer Connections• Voice of the Customer

Our leadership framework is based on a foundation of trust with a focus on results, supported by a communication strategy that cascades throughout the organization.

TRANSFORMATION TAKEAWAYS

1. Transformation is a process, not an event2. Go slow to go fast3. Purpose and people4. Clear goals, roles and process5. Culture trumps strategy6. Structure follows strategy7. Effectiveness over efficiency8. Embrace the ambiguity9. Communication, communication, communication

“The biggest obstacle to communication is the illusion that it’s taken place.”

Personal Transformation“Every day, work harder on yourself than anything else.”

MODEL FOR GROWTH – from CIO-to-CSO

CIO

Decline

CSO

Curve 1: Existing Life Path Curve 2: New Life Path

Significance

• Key to sustaining a healthy career is to be self-aware of where you are on life’s curve.

• Important to fight complacency and constantly “reinvent” yourself.

• The path to success is never a straight line.

New Challenge

“We’re meant to grow so we have something to give.” – Tony Robbins

Transition&

Ambiguity

PERSONAL JOURNEY

Move yourself through change:• Must be willing to accept change. • Ability to let go of the life we have planned to accept the life that is waiting for us.• Build new skills, habits, attitudes and/or beliefs.

Challenges moving to a CSO role:• Original role was the result of a ‘whiteboard session’.• The position has changed multiple times.• “Sometimes the shortest distance between two points is a zigzag.”

o After multiple zigzags, the role is now closer to what was originally identified on the whiteboard.

“It’s not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” – Charles Darwin

Chief Strategy Officer:Collaborate with colleagues to lead the company and accelerate the likelihood that Motorists realizes its vision and fulfills its mission.

• Develop and lead the strategic planning framework for the organization, and provide clear visibility into all strategic activity.

• Facilitate the formulation of business & technology strategies and the development of roadmaps in support of our one company.

• Assist in the execution of strategies by ensuring strategic actions are effectively communicated, planned and aligned.

• Establish and lead an enterprise digital strategy that serves as the framework from which to leverage all other transformational initiatives.

• Provide thought leadership and foster a culture of innovation through the analysis of emerging trends and disruptive technologies.

EVER-EVOLVING ROLE IN AN EVER-EVOLVING BUSINESS

People follow people…

Silicon Valley…

Halftime…

Adversity…

“I am a success today because…”

“Flip your thinking”

“Success to significance”

“The Four Agreements”

Leadership lessonPersonal Experience

PERSONAL JOURNEY

THE DAILY CHALLENGE

• Keep all words positive

• Learn one new thing

• Give your best effort

Leadership & Communication in “Revolutionary Times”

Qualities of Leadership 2.0• They’re never satisfied with current state, but obsessed with creating a better one. • They see the challenge of leadership as coaching-and-collaborating rather than commanding-

and-controlling.• They earn trust through communication, competence and humility. Lead with humility!• They understand the privilege and responsibility of leadership to help others have a

successful life.

Qualities of 2.0 Led Organization• Everyone sees their work as a contribution to something larger than themselves.• Everyone in the organization feels valued and appreciated with a voice that is heard.• There is trust throughout such that perspectives and information can be shared openly.

Transparency prevails!• When the organization succeeds everyone benefits.

• The key to transforming your organization is having a vision.• The key to implementing a vision is collective change across

the organization.• The key to collective change is personal change of each

leader.• I have to make significant change to effectively lead during

these “revolutionary times” – It’s personal

What I’ve learned

“Transform yourself, transform your company, transform your world.”- LinkedIn

Leadership & Communication in “Revolutionary Times”