Royal Neighbors of America: Writing Herstory

Insurance
Written by Liz Jones
Monday, 31 December 2007
Cynthia Tidwell explains how this fraternal insurance society is making the journey from passive to empowered. When Cynthia Tidwell joined Royal Neighbors of America two years ago, the technology, management practices, and go-to-market strategies were so outdated that she felt as though she had fallen into a 35-year time warp. But all was not lost. Royal Neighbors of America had capital to reinvest, as well as a rich history on which to build. Founded in 1895 by a group of nine Illinois women, Royal Neighbors of America�s initial goal was to provide insurance products for underserved women. �Back then, women didn�t have the right to vote, few were educated, and even fewer owned property. The fact that these rural women educated themselves about the insurance business and started this fraternal organization is exceptional,� Tidwell said. Cynthia Tidwell Today, Royal Neighbors of America has expanded its service offerings to include life and health insurance, including Medicare supplement insurance and annuities. And unlike other insurance companies, individuals who purchase Royal Neighbors� products become members and are eligible for valuable member benefits such as scholarships and fraternal aid. It also has expanded its customer base to include women, children, and men through a series of nationwide chapters. Tidwell, who has many years experience as a turnaround leader, spent the first several months of her tenure with Royal Neighbors in what she called the recognition phase during which she collected information about the organization. �It was very passive and insular. Many employees had been promoted into jobs not necessarily because of skills, but because of who they knew or how long they were there. Because of this, they didn�t have a solid set of goals or a strategy to achieve them,� said Tidwell. Like a castle made from Legos, Tidwell took the company apart, separating the bricks into four buckets. The first bucket contained all bricks pertaining to mission, focus, and brand. �I wanted to clearly articulate our strategy,� said Tidwell. And the organization has done just that with a new tag line: Insuring lives. Supporting women. Serving communities. The slogan positions the company as an insurance organization targeting women over the age of 45 and those they love. �The organization isn�t large enough to be all things to all people, so we are going after a niche market. We are an organization of women supporting women as they strive for financial stability, health, and wellness,� said Tidwell, adding that despite societal progress, many women remain ill prepared financially for a number of life events, including sending their children to college and retirement. Tidwell filled the second bucket with bricks pertaining to its insurance product mix and the company�s distribution model. It is currently analyzing the product mix, as well as the ancillary benefits it provides, to better serve its 230,000 members in 41 states. What that portfolio will ultimately look like is yet to be seen, but Tidwell anticipates the majority of products to be focused on women. Royal Neighbors has also transitioned from a captive agent force to an independent agent force for two primary reasons. First, Tidwell explained, a captive agent force is expensive to maintain as the agents need to be paid regardless of how much they sell, as they are, in essence, employees. With an independent agent force, Royal Neighbors pays for performance. Second, Tidwell felt that Royal Neighbors did not have a sufficient product portfolio to sustain a captive agent force. �Instead of forcing the system we had to work, we realized we needed to change our distribution methods all together to achieve our goals.� The third bucket held bricks relating to expenses, which the company had not kept a careful eye on in the past. Changing its distribution model certainly helped save money, as well as setting (and sticking with) an annual budget. The fourth bucket contained foundation bricks. According to Tidwell, the company wouldn�t get far without the right people in the right jobs and a culture to support them. �The organization is in the midst of a lot of change, and change is not something the group was exposed to often,� she said, adding that Royal Neighbors needed to eliminate certain positions and add others. �Some of the roles were outdated and didn�t fit into our vision for the future,� she said. When Tidwell joined the organization, employees were hesitant to express their ideas and opinions, in part because the previous leadership had stifled them. She turned over about 50% of the management team, and spent much of her time communicating with employees about the changes ahead. Tidwell meets with small groups of employees, about eight at a time. �We sit and have coffee and talk about what they like, what they don�t like, and what they have questions about,� she said, adding that town hall meetings every other month keep employees up to date on the organization�s progress. Heavy-duty job skills training and the development of cross-functional project teams have done wonders for the organization, which once operated in silos. Tidwell explained that the cross functional teams accomplish two tasks: break down silos and indirectly train employees. �Years ago, hierarchical organizations worked�everyone played their position and didn�t ask questions. Today, you need team work and multi-dimensional employees. By developing cross-functional teams, employees start to appreciate others� work and understand how their work affects others. We don�t want our underwriters to become claims people, but we want them to understand the claims function because it makes them better underwriters,� Tidwell said. To promote teamwork, Royal Neighbors developed a creativity zone, complete with a dart board, a pool table, and a putting green. Tidwell describes it as a place employees can go to decompress and exchange ideas. The next stage for Royal Neighbors is what Tidwell calls the stabilization strategy, which she predicts will take the better part of four years. In addition to a continued re-branding effort, a cultural makeover, and the development of its product portfolio, Royal Neighbors has embarked on an organization-wide IT mission. Ultimately, the organization will have four Web sites, one each for outside consumers, members, agents, and employees. The Web strategy will be complete in early 2008, and the development of the agent site will follow soon thereafter. All of these efforts have led to a more active and engaged organization dedicated not only to supporting women, but also aiding local communities. Royal Neighbors has revitalized its community-based volunteer activities, such as Join Hands Day and Make a Difference Day, It just kicked off �Nation of Neighbors,� a program that this year alone gives away $250,000 to individuals in dire need. Members submit requests, and recipients are chosen based on predefined criteria. Tidwell added that Royal Neighbors has also added significant new member benefits and upgraded its scholarship program. �The organization has always stood for women and the community�we are just bringing these exciting programs to life again.�

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