Farmers Insurance claims the top spot on the Training Top 125 for the first time.
By Lorri Freifeld
When asked to categorize 2010 for Farmers Insurance, the first word that comes to mind is “breakthrough.”
First, the $18.5 billion insurance company acquired the fourth-largest direct writer of auto insurance in the U.S., which required the assimilation of 2,500 new Claims employees into the organization. Then Farmers Insurance invested $250 million
in a sweeping upgrade of core organiza-tional IT infrastructure—appropriately called “Breakthrough”—necessitating extensive training for more than 14,000 insurance agencies, and 15,000 of their staff, as well as 1,500 employees spread across thousands of locations in the U.S. Next, Farmers broke ground for its second University of Farmers campus in Michigan. Last but not least, Farmers not only stormed into the Top 5 of the Training Top 125, it claimed the top spot for the first time. All of these accomplishments are due in large part to Farmers’ persistence in aligning learning and development with corporate strategic goals, not an easy task for an insurance company that writes in 50 states with almost 60,000 employees and Farmers exclusive and independent agents, who collectively service more than 15 million customers.
A subsidiary of Zurich Financial Services Group, Los Angeles-based Farmers Insurance Group of Companies is the third-largest insurer of both passenger automobile and
homeowners insurance in the U.S., and also provides a wide range of other insurance and financial services products.
“While the learning function must deliver against long-term strategic results, it also must be focused on how to deliver today’s business goals and objectives,” stresses Annette Thompson, senior vice president and chief learning officer, University of Farmers. “These results also must be transparent and frequent for all the leadership team to review. Our Scorecards and Board Reports are displayed in alignment with the organization’s objectives, so our business leaders can quickly evaluate the programs and the respective outcomes that support their business.”
In addition, the learning units at Farmers and the supporting learning professionals are aligned to both the CLO and the business unit leader. CLO Thompson, herself, participates in the CEO’s executive meetings and is a member of the executive-level Office of General Management. “Learning professionals are compensated not just on program development, or the success of the program in reaction or skill development, but rather on the success of the program in changing behavior of participants and in delivering against the business objectives expected at the onset,” Thompson says.
Finally, the University of Farmers has an outside Advisory Board, which Thompson leads. The Board reports out to the organizational Governing Board quarterly at the Governing Board meeting. “This accountability serves to support buy-in from organizational leadership,” Thompson says.
21st Century Acquisition
That training buy-in is particularly crucial when it comes to the challenges presented by a merger or acquisition. Farmers Insurance’s acquisition of the 21st Century Insurance Company in 2010 was a perfect fit “because the core drivers of the acquisition allowed us to expand our ability to reach customers where and when they wanted to do business, as well as giving Farmers an additional engine of growth for our exclusive agency force,” says University of Farmers Vice President Jim Harwood. “That said, this acquisition represented an unprecedented integration challenge, touching our independent contractor agency force, as well as Claims and non-Claims employees.”
Leveraging 21st Century as a driver for growth for Farmers agents required the development of new processes to serve the broader needs of 21st Century auto customers (such as home, life, business, and recreational vehicle needs), by introducing them to a local Farmers agent. This produced a significant challenge due to 15,000 agents being spread across the U.S.
“To support the learning needs of our agency force, Webinars were developed to prove concept and content in communicating the value of the 21st Century acquisition, as well as the process to warm transfer 21st Century customers from 21st Century Call Center Operations to local agencies,” Harwood explains.
These Webinars ultimately evolved into two online courses, as well as a supporting classroom session conducted by Farmers’ 500-plus district managers. In addition, a one-and-a-half day session was developed to support 21st Century Call Center representatives in the warm handoff process. This allowed them to acquire the necessary skills to actually bind coverage, if needed, by the customer in the homeowner line of business. “They then can hand the customer over to a Farmers agent for additional service around the sale,” Harwood notes.
Farmers also needed to assimilate 2,500 new Claims employees into the Farmers Claims organization. In response, the University of Farmers Claims team designed and rolled out a comprehensive integration program. Its objectives: to certify all new employees in their new jobs; to train them on Farmers systems, practices, policies, procedures, and culture; and to communicate effectively to both incumbent and new employees about the integration, its benefits, and impacts on the total workforce.
“We established 53 cross-organization integration work streams (one person from Farmers Claims and one from 21st Century Claims co-leading each work stream) to identify and recommend best practices, develop and implement an integration plan for that work stream, and provide communications content to be disseminated to the combined organization,” says University of Farmers Claims Vice President Mike Cuffe. “We also used certification and behavioral-based interviewing for all 21st Century Claims employees, to place them appropriately in new jobs and demonstrate to all members of the combined organization that the same standards were being applied to everyone. We customized existing claims and leadership training for the 21st Century staffs to hone in on Farmers-specific learning content that they would need to succeed. To keep everyone up to date, we produced regular weekly communications to and about the 53 work streams.”
Even before the acquisition, Farmers processed millions of insurance quotes, new policies, renewals, and bills every year. In 2010, major changes were made in all the processing, rating, billing, and product systems in support of the firm’s Farmers Future 2020 vision—an undertaking unprecedented in scale at Farmers, according to Harwood. “As we considered the audiences impacted, from customers to our sales agents and their staff, to internal customer service representatives, we faced an enormous task of re-skilling our people,” Harwood says. “This needed to occur in a non-disruptive manner while improving the customer experience. A particular challenge was an inconsistent release schedule where each state received elements of the new systems at different times.”
The solution came in the form of a series of change initiatives, collectively called Breakthrough. It prepared more than 30,000 people to use the revamped processing systems. Farmers tackled this challenge through a blended learning
solution. Field managers were trained and were provided with instructor-led training, video, presentation, and coaching guides. Online training and Webinars provided significant knowledge transfer; these were also prerequisites to live training participation. “We engineered performance support directly in the new systems to assist our people at the time of performing transactions,” Harwood says. “This content included resource guides, videos, and job aids.”
Equally important, Harwood points out, “was creation of a ‘Measurable Repeatable Process’ regarding the integration of logistics, execution, communication, and learning sequencing in support of a complex initiative(s) release schedule. In fact, the design created an unprecedented level of reusability with more than 90 percent of learning content re-used across multiple audiences.”
With the core sales agent audience being independent contractors, it wasn’t possible to make the training mandatory. Nevertheless, Farmers achieved more than 100,000 online learning participations with more than 90 percent of its agents. Level 1 and 2 results were 4.2 out of 5.0 and 86 percent achieved vs. 80 percent goal, respectively. In the area of direct business results, training graduates were 50 percent less likely to tie up contact center resources, resulting in $19 million cost avoidance, according to Harwood. “Additionally, we decreased processing time by 60 percent, improved quoting activity by 95 percent, increased sales by more than 10 percent, and achieved a 92 percent customer satisfaction level—all results that exceeded internal targets,” he adds.
On Board with Onboarding
Another program revamped in 2010 was on boarding to help new agents realize personal business success. “We develop more than 5,400 sales agents each year who have tenure of less than three years. We recently faced a downward trend in new agency success metrics as it is a complicated business with lots to know and be good at—ultimately
requiring dedication and time to develop the needed competencies,” Thompson
Designed to address organizational growth goals, the revised program updated elements that had become antiquated in the last few years. “We also took this opportunity to integrate stronger structured coaching, bolstered multimedia elements, introduced more performance support aids, and created a more flexible path to move through the curriculum,” Thompson notes. “We focused on getting learners what they need when they need it, versus hammering them with information irrelevant to them at a particular point in time and avoiding the frustration when they did not recall the information when actually needed months later.”
As a result, success in converting new agent recruits to full-time status improved by 12 percent, and sales results are coming in 11 percent over target. “Upon introducing our updated program for agents in their second year of development, our resulting agency retention result rose almost 10 percent in the ensuing year,” Thompson says. “This is an important achievement when you consider the hundreds of agents who continue with Farmers and the revenue they generate over the lifetime of an agency.”
With employees and agents crossing generations and locations, how does Farmers deliver learning effectively? “First, we’re always mindful of the fact people learn differently,” says Mark T. Cusack, executive director, University of Farmers, Independent Agent (IA) Market Management. “As a result, our key curricula are designed to reach people through multiple modalities. We develop thousands of participants annually through programs that integrate face-to-face, print, online, video, audio, virtual engagements, and coaching. We are strong believers in instructor-led training for skill development and the tech arena for knowledge dissemination.”
Rather than offering particular learning events through a variety of modalities where the learner chooses the mode of delivery, Cusack says Farmers finds it more practical to tackle learning preferences through a general blended approach. “Also, about six years ago, we underwent a transformation in delivery, with a significant increase in online utilization, particularly Webinars. We also are experimenting with 3-D learning environments, though the technology still has some growing pains to endure to really be effective.”
Adds Art Dobrucki, University of Farmers director of Performance and Strategy, “It’s
essential that we continue to evolve our learning delivery. As technology and information in general is changing at an exponential rate, relying solely on the tried-and-true is a risky option.”
In 2010, Farmers made inroads to broaden the L&D landscape in the areas of virtual classrooms, mobile, social media, video, e-Readers, pads, and learning simulations. “We are approaching mobile through a three-pronged approach with segmentation based upon audience: customer, sales agent, and employee,” Dobrucki explains. “Launched last summer, our iFarmers customer application has a broad foundation of learning
assets about insurance for consumers. Our iClaims application provides customer access to self-service claims input and claims management. We recently launched a separate, business-focused approach on mobile for our agents (iAgent).”
The L&D team also has been experimenting with various Web 2.0 platforms. Last fall, it expanded the Lotus Quickr and Connections platform to the entire employee population, allowing for collaboration, knowledge creation and sharing, and performance support “at the moment of need.” Farmers populated the social space with learning assets and is embedding and encouraging collaborative exercises in this space as part of some new formal learning programs.
Another area of innovation is video. In a partnership with Chicago’s Second City Communications, Farmers launched an interactive portal using comedy to deliver serious messages for its Claims professionals. “We also are investing in multimedia with a dedicated broadcast studio in our West Coast corporate university,” Dobrucki says. “And our second campus, opening this summer in Michigan, will not only have a multimedia creation and editing studio, but also 10 dedicated Webinar broadcast booths.”
Finally, L&D partnered with Farmers’ IT department to develop an IT Roadmap for Learning. “This roadmap is shaping our priorities in technology investment in a way that will improve our ability to deliver what our business stakeholders require,” Dobrucki explains. “We also see this approach as an important enabler toward L&D alignment with the business.”
That alignment is critical and something Farmers measures continually. “Stemming from our design philosophy—which is to deliver learning with the end result in mind—we know before a curriculum is even built how success will be defined,” Thompson says. “So as learning interactions are released, we gauge results along the Kirkpatrick Evaluation spectrum relative to target goals established at each level of analysis. Further, we are transparent with results and report Levels 1-4 across organization leadership quarterly through Scorecards and Board Reports that are distributed to all leadership. A green-yellow-red visualization tells people where we are winning and frankly where we still have opportunities to tackle. Commonly measured, Level 4 metrics are new business sales, retention, engagement, quality, and customer experience.”
On the Horizon
Looking ahead, Farmers has leadership on its mind. University of Farmers Claims is building the new Presidential Leadership program, in collaboration with the nearby Ronald Reagan Presidential Foundation and Library. “It will boost our management team’s leadership potential by strengthening individuals’ emotional self-awareness and self-management skills, their focus on social awareness, and their ability to manage interpersonal relationships,” says Cuffe.
A second program currently in design addresses the issue of employee engagement and is called the Farmers Corporate Athlete program. “Research by the Human Performance Institute of more than 100,000 businesspeople in North America since 2003 brings to the forefront a startling discrepancy between the efforts most individuals actually put forth versus their potential for contribution. A shocking 65 percent of the respondents revealed that they are disengaged from their work, 21 percent of them toxically,” Cuffe notes. “As of January 2010, more than half of corporate America feels disconnected from the task at hand, working on key projects while exhausted, distracted, or burned out with insufficient energy or drive to cope with the current workload. It’s a sobering number that impacts the very core of productivity, customer service, innovation, creativity, and staff retention.”
To help offset these disturbing statistics, the University of Farmers Corporate Athlete program will focus on the biggest areas of impact:
Physical: Higher energy, fitness, and frequency of exercise.
Emotional: Increased mental alertness, laser focus, and preparation for work.
Mental: Sustained levels of confidence, positive feelings, and resilience.
Spiritual: Higher feeling of being fully engaged with work and personal life.
“The global workforce study establishes a definitive link between levels of engagement and financial performance and, for the first time, begins to quantify that link,” Cuffe says. “It demonstrates that at a time when companies are looking for every source of competitive advantage, the workforce itself represents the largest opportunity of untapped potential that we plan to mine over the next few years.”
Number of employees, exclusive and independent agents: 60,000
Annual insurance company revenues: $18.5 billion
Percentage of payroll represented by the training budget in 2010: 3.15 percent
Number of employees, exclusive agents/staff, and independent agents trained overall annually: 92,680—34,163 trained in instructor-led sessions; 52,876 trained online; 638 trained via self-study
Average length of employee service: 9.5 years
Percentage of job openings filled by internal candidates: 44 percent
Percentage of new hires referred by employees: 43 percent
Number of courses offered as instructor-led classroom sessions: 1,431
Number of courses offered as instructor-led virtual classroom
Number of courses offered as online, self-paced modules: 6,677
Number of corporate university campuses: One, with a second 50,000-square-foot campus, located in Caledonia, MI, due to open its doors in June 2011
Looking to improve your training programs or need to cut training costs? Annette Thompson, senior vice president and chief learning officer, University of
Farmers, offers some advice:
Deliver consistent solid business results to avoid being the function that is undergoing budget cuts. With that said, in today’s economic downturn, budget cuts are prevalent across all functions within a business.
Improving the effectiveness of learning programs should begin with the quality of work done upfront to understand what the true business problem is, what the desired outcome is, and what needs to change in your audience to deliver a different result. This critical work often is overlooked and is fundamental to designing a program that will deliver for the business, and accordingly will be a more valuable program.
Opportunities exist to cut costs through thinking more deeply about creating learning that is learner-driven and self-paced. All learning does not have to be delivered formally from the learning organization. Learning assets can come from the learners themselves, i.e., social media. In addition there is opportunity to think more creatively about using adjunct resources outside of learning to support both formal instructor-led events or, more importantly, informal learning in coaching, job shadowing, etc., which, in reality, is where much of the learning occurs anyway.
Encourage your team to think in learning nuggets. What can you deliver that might not have so much sizzle as what you would have delivered four years ago, but can be developed with less expense and quicker to market, creating the opportunity for a more expedient impact to the business today? Also, as a nugget, it is more likely to be reused. “YouTube-like” videos are a perfect example of these types of opportunities.