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Lisa Valentine
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Bob Wilkes Transforms CSAA’s Field Presence

California State Automobile Association (CSAA) Chief Delivery Officer Bob Wilkes talks about his current focus on transforming the carrier's call centers, as well as discussing changes in the carrier's data strategy and its market outreach to other AAA organizations.

Bob Wilkes has spent much of his insurance career as a change agent. Since joining San Francisco-based California State Automobile Association -- which offers financial services such as auto, homeowners, life and personal umbrella insurance in addition to AAA membership products and services to its 4.5 million members -- as SVP of sales and service in 2002, Wilkes has helped transform the $2 billion insurer, including changing the company's technology infrastructure, management structure and culture to reduce costs, improve efficiencies and increase customer satisfaction.

I&T: How have your responsibilities changed since joining CSAA?

Wilkes: Since the end of 2005 I've been focusing on field transformation. My current title is chief delivery officer, and I have responsibility for our field offices in Northern California, Nevada and Utah; the five call centers that we are in the process of consolidating; and our Internet channel.

I&T: What do you mean by field transformation?

Wilkes: When I first arrived at CSAA, company results were pretty poor and field operations was organized in management silos. Membership managers, travel managers, personal insurance lines managers and life insurance managers each reported to different vice presidents in the organization. Even though managers were physically in the same office, there wasn't a lot of synergy. CSAA reorganized and consolidated the field under one reporting hierarchy. I then reorganized the field, contact center and Internet channels under one group to enable more collaboration and teamwork in the office and in the field, and to provide employees with a better working environment.

Now that the company has turned its results around and put its systems in place, we're transforming to a market rather than product focus. Our six geographic markets are each responsible for their own P&L across all three channels. Since each market is responsible for its revenue whether it comes through the contact center, the Internet or the field office, they need to use all three channels to best serve the market.

I&T: What systems have you put in place to facilitate this field transformation?

Wilkes: We're trying to drill down into specific market needs and listen to how our customers are telling us they want to do business with us. To do that, you need the right systems and the right data. Being customer-driven comes from having much more information about customers and their behaviors than anybody else.

Back in 1999 when we started looking at changing our infrastructure to prepare for the future, we put in the Epiphany CRM system (Epiphany was acquired by Atlanta-based Infor in 2006). At that time our philosophy was to go very wide and very shallow with data.

I&T: What's changed in your data strategy?

Wilkes: While we collect demographic data -- such as how long customers have been with us, car type and the number of tows or emergency roadside service calls they've made -- the real value of the CRM system lies in the customer transaction activity: When do customers make their payments? How often do they come to the office? When do they use the Internet?

Collecting that transaction information and then performing the marketing analytics to cross-sell and up-sell is about an 18-month journey that will be full of hiccups and bumps as we learn how to manage markets based on the customer perspective, customer preferences and product profitability needs.

The tools are out there; the challenge is populating the tools. We're in the right position -- it's a matter of reaping the benefits from all these systems, such as the CRM solution.

I&T: How has the IT staff been impacted by the changes?

Wilkes: In summer 2006 we moved the IT department from downtown San Francisco to Glendale, Ariz., because the high cost of living in San Francisco makes it tough to attract people. About 30 percent of our staff moved to Arizona. We've been able to hire good quality folks and reduce our expenses.

We also changed our management structure. In our employee engagement surveys our employees told us that they didn't feel like they were getting enough attention from their managers. In some areas managers were responsible for 15 to 25 people, so their bandwidth to do individual development plans, mentoring and coaching was inadequate. We are restructuring to have one manager responsible for only nine or 10 employees. We've implemented people-development metrics for our managers to make them accountable for their employee's career paths, whether that means getting employees ready for their next jobs or increasing knowledge in their current jobs. A large part of our frontline and mid-level managers' jobs is the development of their people.

I&T: Has the management transformation been culturally difficult to implement?

Wilkes: Yes. We spend a lot of time and a lot of resources offering change management classes. We also provide weekly communications on the reasons for the transformation, the progress we've made and what employees should expect in the future.

I&T: Sounds like a lot of focus on people development.

Wilkes: In the service business we have a saying: If the employees aren't happy, the customers aren't going to be happy. The work environment helps make happy employees. We're opening more offices and making our existing offices smaller for two reasons: so we can be more visible in the community, and create more ownership for each office and a stronger team atmosphere. For example, in the Sacramento market we used to have five offices and 85,000 square feet. We now have 14 offices and less than 50,000 square feet. We've also added training programs that will hopefully help to create happy employees who will in turn create happy customers, which will raise our customer-retention rates -- which translates into more revenue for the company.

I&T: On what other initiatives has CSAA been focused?

Wilkes: We have formed a holding company with other AAA clubs to create synergies and reduce costs around areas such as strategic sourcing processes. It's not a merger; we still have club independence. We're also providing other AAA clubs that don't own an insurance company with insurance products since we can act as the underwriter.

I&T: What technologies will be important for the business in the future?

Wilkes: A unified desktop, data warehousing and CRM will continue to be important. Telematic technologies, such as GPS, are going to be huge. Insurance companies can use telematics to track customer driving patterns and better price insurance based on the actual driving experience.

I&T: Any lessons learned from your transformation experiences at CSAA so far?

Wilkes: Communication, transparency and vulnerability are critical. On paper the transformation can have a good ROI, but actual results are based on how well you communicate with employees. I constantly repeat the business case. That doesn't mean they all like it, but the message is consistent.

Transparency is telling employees if you know something because they are smart enough to figure it out anyway. Vulnerability is letting employees know where you struggled, what keeps you up at night, and letting them know you're human and have the same thoughts they do.

I&T: What has been your biggest career challenge?

Wilkes: The first time I had to move. I was born and raised in California and received a management opportunity in Seattle. Taking my kids away from family and friends was a pretty traumatic challenge. The job was to help reengineer the underwriting department of an insurance company. That, coupled with coming from out of town, did not create a welcoming environment for a young guy.


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