In the spring of 2009, college intern Samantha Barton sat down to interview Terry Bowling as part of an assignment for her Marketing Management class from Gettysburg College. Samantha is a senior actuarial student who interned at Benecon over the winter. The following interview reveals the unique success factors of Benecon and provides insight why the company continually comes up with innovative solutions.
Samantha
Terry, I’ve been an intern here for four weeks and I’ve heard people say Benecon is innovative. What’s that all about?
Terry
Good question. The innovations aren’t random events, but rather stem from certain elements that exist here at Benecon that are fostered by Sam Lombardo.
I think the core of it comes from the unique blend of people that Sam has hired. None of us have grown up, so to speak, as consultants. We all have diverse backgrounds and expertise in what we do, but not as consultants. This enables us to “think outside the box” as they say.
My own background is as a senior executive at Highmark. Sam built the first half of his career in Life and P&C insurance. Our actuary, Rick Burd, used to be Chief Actuary for an insurance company. Al Loomis was a successful municipal manger. Jeez, we even have a former major league and world champion baseball player in Marty Bystrom. I could go on. Our consultants have been benefit administrators for Armstrong World Industries, entrepreneurs, and TPA experts. I don’t think you could find a more diverse mix of talent, and none of them life long “consultants”.
Samantha
Can you give an example of how this works? How does this lead to innovation?
Terry
Well, first, we believe career brokers and consultants are stuck in the general pattern of “consultant speak” and “consultant act’. There’s a pattern to their advice, behavior, problem solving, carrier relations, whatever element you wish to look at. They live in the traditional world of benefit consulting and all that implies, a world that was framed by conditions decades ago. I guess they have their own playbook and templates and so on handed down from generation to generation.
We are all blessed at Benecon because nobody taught us to act that way. We have the refreshing ability to address a problem in a new light. We aren’t trapped by traditional ways of thinking. The book, Make It Stick, called it the “curse of knowledge”. That’s where old knowledge prevents you from obtaining new knowledge.
Our solutions often don’t even seem clever to us, just common sense. Yet our solutions seem startling against the tired and worn out traditional answers of our competitors.
Samantha
You didn’t give an example yet.
Terry
OK. Let’s start at the beginning. Sam Lombardo represented four local municipalities in 1988. I think they were his first four group clients. He said to them, “Why don’t you just form a cooperative and jointly purchase your medical insurance like one big employer?”
Just common sense to Sam. But why didn’t anyone else think of that? We now have over 170 municipalities and county governments enrolled in group purchase co-ops!
We have found repeatedly that this common sense approach to employee benefit solutions is sorely missing, and our innovative answers seem to come from a “just do this” type attitude.
We hired an actuary in 2002 and showed him a carrier renewal price we didn’t like on one of our large customers. We thought it was unfair. He looked at it and said, “why not just tell them the price?” That simple statement turned the conversation on its head and ever since Benecon, not the carriers, now does the pricing for our clients, and we take our price to the market. We determine the price and then find a carrier willing to be the supplier! Simple, yet revolutionary. No one does it this way, yet it’s very effective.
Samantha
Are there other areas where “just do this” kind of thinking unlocks innovation?
Terry
Absolutely. We hired a compliance attorney, Judy Griffith, in 2004. At the time, we found employers were frustrated trying to comply with recent privacy legislation. They turned to corporate attorneys who were not that familiar with employee benefit operations and wanted to do extensive legal reviews, case law studies, and large engagements. The IT vendors were out of control with sledge hammer solutions to what was really a simple little problem for most employers. Traditional brokers were parading lawyers in front of their clients creating more confusion and anxiety.
So Judy looked at this and said, “let’s just make a recipe style, simple checklist manual, that just tells employers what to do to obey the law”. We even created a manual to tell employers how to avoid the law, or I should say, remove themselves from privacy concerns because they simply avoid the data that needs to be kept private. This idea was unheard of, yet so simple. “Just do these things and you don’t have to worry about the law”. It was just what employers wanted, and just what they couldn’t seem to get from law firms and IT firms. They wanted someone to tell them what to do with very little expense.
It was such a contrast to all the legal seminars at the time with lawyers trying to teach confused employers about the law, or IT firms proposing lengthy and costly IT audits and systems scrubbing and all that stuff.
In another instance, we had a client agonizing over the employee contributions for various plan options. What if they all chose one plan, or another? The employer was concerned about the uncertain outcome on their budget. Dave Wuenschel looked at this and created a little model that insulated the plan from the employee choices. That is, the employer costs were locked in regardless of employee choice. Again, a fresh look at a simple problem, yet one that other’s were unable to come up with.
I have a third example of how we avoid traditional consulting methods. This is a great one. When traditional consultants approach a group purchase arrangement, they are compelled to do an expensive feasibility study. They want to cook up plan designs, estimate this and that, deliver a fancy report, and run up a big bill for themselves. At the end of the day, maybe a year later, all you have is a book of papers and a big bill to pay.
Benecon avoids all that expense and theoretical speculation and nonsense. Benecon’s approach is to test feasibility directly. WE TAKE IT TO MARKET! That’ll tell you if it’s feasible, won’t it? It not only gets to the feasibility, but gets the real price. And we do that at no cost. Now the clients, in shorter time than a feasibility study, and at no cost, have a real live quote to study and base a decision on. Simple. Smart. Just do this. Just take it to market.
Samantha
Is there a cultural or group dynamic to this innovation?
Terry
Not exactly. There is certainly a culture that supports innovations and risk taking that enables the innovation. The innovation itself comes from individuals, not collective thinking. I truly believe it comes from the way Sam Lombardo hires talented people from different backgrounds, and then gets out of the way.
Our latest hires have been Mark Krug and Matt Kirk. Mark has experience managing health clubs and is a former world champion power lifter. Matt has a background in public bond financing. I’m convinced it’s only a matter of time before these guys look at some employee benefit problem, and say, “just do this”, and comes up with some remarkably simple, creative solution that we all missed.
Each one of these innovative ideas and approaches has led to areas where Benecon excels in the market. We find once we innovate, or reinvent something, we keep refining and driving the concept forward and no one ever catches up. It’s remarkable how far out in front of the market we are, in Group Purchasing, our actuarial applications, our compliance service, our broker services, our wellness and disease management solutions, and so on.
Samantha
What’s next?
Terry
What’s next is already happening. And this is another typical example of innovation from a seemingly simple idea. Sam Lombardo, going back 8 or 9 years, had a serious brain tumor and surgery. He’s came away from the difficult experience thinking, “I just wish someone was there to help me through that”.
That thought never died, and after years of research and preparation, we finally launched a new company, ConnectCare3, devoted to that simple notion: People with serious illness just need somebody to help them.”
It’s a simple, basic, and universal need of our customers, to have some help during complex or life threatening problems, yet no one bothered to fill that niche in the way that we have. So here we are once again, the only company bold enough, or talented enough, or maybe smart enough, to simply reinvent the way things work and redefine services for employee benefit plans. A perfect example of “Just Do This”.
Samantha
Thank you for your time. I hope I get an A in my report.
Terry
Well, come around next year and I’ll probably have more examples and get you an A+. This stuff just keeps on going here at Benecon and we have no intention of stopping now.