Mirror, Mirror – Part Two
In Part 1 of my Mirror, Mirror blog, I shared three of the Seven Evergreen Principles and how those principles have, in the past affected and will continue in the future, to affect Andesa’s strategy. Those initial three principles were:
- People First
If you missed Part 1, I encourage you to go to the Andesa website, https://andesaservices.com/blog/, and read the blog Mirror, Mirror – Part 1.
In Part Two I examine how Andesa incorporates the remaining four of the Seven Evergreen Principles into its strategy both in its past and future operations.
Principle 4: Private
Andesa has always been a privately-held organization. Our founders, a limited number of outside shareholders, and management have owned the company since the day it was started. We have maintained a long-term view when it comes to investing and in our relationships with our clients.
I communicate with new hires that our clients have trusted us with their systems. Andesa has an obligation to service policies beyond our current generation, perhaps fifty, sixty or even eighty years into the future.
Remaining privately-held allows us the opportunity to sustain that long-term view. We are not beholden to quarterly earnings calls (or monthly earnings reviews of private-equity-backed companies). Andesa can align our values, culture and efforts with those of our clients’ long-term life insurance products and philosophies.
We believe the ESOP is the best economic ownership structure to protect our ability to remain private. It is an investment in our belief of self-governance, which allows us to preserve the employee and client focus with a long-term perspective.
Principle 5: Paced Growth
Many publications recognize companies who achieve rapid year-over-year increases in revenue with a “Fastest Growing” moniker. However, such growth can be fleeting. Less than 10% of the Inc. 5,000 Fastest Growing Companies in 2011 continued that recognition for five consecutive years. Only one of the top 25 on the list in 2011 even made the list in 2016. And, even then they came in at number 4,953.
In our history, Andesa has experienced up years and down years – not a pattern of steady consistent growth but peaks and valleys which looks like steady progress when one takes the long-term look-back in the mirror.
As we look forward, we expect much of the same paced growth. Some good years – some challenging years; after all – it is business.
We are driven by our strategic plans, which include incremental building blocks for long-term growth. These include investing in our COLI/BOLI leadership position, but also diversifying our revenue mix to reduce concentration of risk.
Our paced growth in individual life, structured settlements and fraternal organizations are examples of this paced-growth strategy. Offering both insurance technology contracts and BPO/TPA contracts allows us to meet our clients’ unique needs and further provide diversification of revenue in a paced-growth environment.
Principle 6: Pragmatic Innovation
The Andesa systems we know today were the result of investments by, and partnerships with, our clients. Over the decades, our clients have trusted Andesa to design and build solutions to their problems. These solutions are then integrated into Andesa’s base technology structure which benefits the entire eco-system.
Pragmatic innovation requires a balance of staying abreast of new technology and determining how core applications fit.
Core technology has its own unique profile of functional strengths that new technology can never fully replace. The key to success moving forward is for us to integrate the old with the new. The combination creates greater value than either would have on their own.
Many of our clients will select enterprise-wide digital experiences or data analytics solutions – the exuberance of today’s insurtech market. Andesa understands it must plug and play into those solutions.
We also understand that, for certain product offerings, our clients will rely on Andesa for those same broad, digital capabilities and experiences. Andesa must also offer a full set of solutions to meet those needs as well, whether built by us or offered through partnerships. One thing is sure, we will continue to be driven by our belief in pragmatic innovation.
Principle 7: Profit
Andesa has a healthy perspective on profitability. Reflecting back, one doesn’t get to celebrate 36 years in business without understanding how profit fuels investments over time. That being said, we don’t take our past success for granted.
Each employee-owner understands our financial goals and potential obstacles. Team members can have maximum impact as true custodians of the business. This will be especially important and rewarding as we move to an ESOP structure, where sweat equity results in retirement account growth.
As we plan our path forward, we will continue to strive for the abilty to reinvest in our culture, our people, and our systems. Doing so is the best way to ensure our future. A strong, healthy Andesa is the best way for our clients to avoid issues and risks with services and systems.
On behalf of the 161 employee-owners of Andesa Services, we thank you for your business, your ongoing trust and your ongoing support of Andesa Services.
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