Running Head: USING INSTRUCTIONAL DESIGN AND TECHNOLOGY TO LEVERAGE

CHANGE IN AN ORGANIZATION

Using Instructional Design and Technology to Leverage Change in an Organization James L. De Lane Tomball, Texas

Author Note James L. De Lane, Tomball, Texas, University of Houston Clear Lake. Questions about this article should be addressed to James L. De Lane, Tomball, Texas. E:mail: DeLaneJ2923@UHCL.edu

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION

Abstract The single biggest problem with change is the transition period between doing things the old way, and becoming comfortable with the new. The Victoria regional office of Frost Insurance is examined to understand the role that instructional design and technology played in the development of a state-wide sales and service center operation. Keywords: Training, sales and service center

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION

The Changing Financial Services Industry Until the repeal of the Glass-Steagall Act in the late 1990s, banks, brokerage firms, and insurance companies, were not allowed to merge their respective operations. With passage of the Financial Services Modernization Act of 1999, the services of these three previously autonomous industries were permitted within singular corporations (Senate Banking Committee, 1999). To gain competitive advantage, new skills, industry processes, and governing laws, had to be learned and incorporated into existing financial services operations. Frost Bank quickly acquired an agency in Victoria, Texas, mainly because its principal owner was widely connected in the Texas insurance industry. With this agency as its base, Frost then acquired agencies in each of the major metropolitan areas of Texas, matching its banking footprint. The Victoria insurance office was unique in that Frost did not have a banking presence there. Background Information In this new environment, Frost Bank developed a business model in which customers were provided with a financial services team, comprised of bankers, insurance representatives, and investment brokers. They operated on the belief that the more touchpoints the bank had with a customer, the more likely they were to maintain the relationship with that customer for the long-term. In each metropolitan area, bankers connected their clients with Frost Insurance and Frost Brokerage representatives, and they in turn returned the favor, introducing their clients to the bankers. It was a symbiotic

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION relationship, and it sparked a remarkable amount of growth in the books of business of the metropolitan agencies.

The exception to this successful model was the Victoria insurance office. Without the benefit of the cross-referral opportunities used in the metropolitan areas, and because they already had a substantial share of the Victoria insurance market, growth in the Victoria office was essentially flat. To rectify the flat profitability, the Frost leadership decided to develop a state-wide sales and service center operation for personal insurance, and base it out of Victoria. Customer service operations for all personal insurance would be removed from the metropolitan agencies, and consolidated in the Victoria office. The metropolitan agencies would pay a fee to the Victoria operation, for them to service their accounts, and the Victoria office retained the commissions associated with any crosssales that were made. Area of Interest The consolidated insurance sales and service center was not, however, a decision that was well received by the metropolitan agencies. Their concern was that the Victoria office was a small town, rural operation, and they feared the depth of the available talent pool in the area would not have the experience or sophistication necessary to handle their high-end clients. I was given the charter to find and train the staff necessary to ramp up the center, and at the same time, embark on a campaign to address the fears and concerns of the metropolitan agency leaders. This presented an enormous challenge, and a real opportunity to leverage instructional design and technology to assist in overcoming the gaps in knowledge and performance that would surely face us as we developed the center. Initially developing training for existing staff, then subsequently training new

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION staff, while simultaneously identifying, installing, and learning how to operate new technology to assist with the anticipated increase in call volume were just some of the learning challenges presented by this new endeavor. The History and Growth of the Victoria Office Professional Insurance Agents, Inc., was a relatively large fish, in a somewhat small pond. Originally founded in 1971 (Frost Annual Report, 1999, p.6), when six independent agents in the Victoria area, agreed to merge their businesses, the agency quickly grew to dominate the extended Victoria market. A large measure of the success was due to the extensive network of professional relationships brought to the mix by the partner who subsequently served as President of PIA, Inc. Ultimately, the President of

PIA served as the head of a state-wide professional association of insurance agencies, and was appointed to advisory committees for a number of national insurance companies. As PIA grew its influence, and book of business, it began to acquire a number of the agencies in the Victoria area, including an agency in Refugio, TX, which served that town and the Corpus Christi market. As the national laws changed, and allowed banks to move into the insurance business, Frost Bank went looking for an agency to acquire, and quickly started courting PIA, Inc. With similar cultures and business philosophies, the two entities were a natural match. Frost Bank acquired the insurance foothold they needed, and PIA gained access to the financial resources of a statewide financial services company and access to a statewide market. PIA was renamed Frost Insurance, and the PIA President was named as its Chairman. His charter was to find other insurance agencies around the state, with similar cultures, for acquisition or merger. Over the next several years, Frost Insurance acquired a statewide presence.

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION The Strengths of the Victoria Office The main strength of the Victoria office was its connections within the Texas

insurance industry, and its reputation among its peers. As the bank promoted its model of cross-referral and collaboration, and as its desire to acquire additional agencies became evident, a wide range of acquisition and merger opportunities were identified. As one of the early entrants into the insurance line of business, Frost was able to be very selective in its decisions to bring entities into the Frost family. The strength and experience of the leadership, provided by the newly minted Chairman of Frost Insurance, resulted in agency acquisitions first in Houston, then in Ft. Worth, Dallas, Austin, Corpus Christi, and the Valley. However, because the bank expected a defined amount of growth and profitability from each of its entities, the inherent weakness of the Victoria office soon became apparent. The Weaknesses of the Victoria Office As stated previously, the main weakness of the Victoria office, within Frost Bank standards of operation, was its lack of opportunity for increased growth and profitability. The agency was, and had always been, nicely profitable. But even this measure of success had reached a plateau a number of years before they joined Frost. They had maintained their market position, but were not growing either their book of business, or their level of profitability, which remained below that of the metropolitan agencies. When the mergers and acquisitions slowed, the bank leadership began to search for ways to change the paradigm, to provide the Victoria office with the opportunities enjoyed by the metropolitan agencies. This search eventually led to the decision to locate a newly developed sales and service center in Victoria.

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION The Strategy The banks strategy for improving the Victoria operation was a two-fold approach. Not only did they decide to build the insurance sales and service center there, but they also assigned responsibility for coverage of the Corpus Christi and Valley markets. Although the bank had recently purchased banks in these two locations, they had yet to identify and acquire insurance operations in these locations. Agents from the Victoria office were assigned responsibility to build relationships with Frost bankers

from these two areas, at least until the bank could identify local insurance agencies to join Frost. Once these two initiatives were in place, the growth opportunities and improvement in revenue would greatly improve. Future Strategy After construction of the new facility was completed, implementation of the call center was accomplished over the next year, in three iterations. After moving into the new facility, small personal lines accounts from the metropolitan agencies were transferred to the Victoria office for on-going service. Once these were in place and the staff was comfortable with the service and cross-sales requirements, the larger and more complex personal lines accounts were transferred. This was followed by a period of adjustment for the staff, and then the small commercial lines accounts were moved. The iterative approach allowed me to develop, coordinate, and implement the staff training needed to ensure the accounts associated with each phase of the transfer would receive prompt, accurate, and efficient service, such that the customer would be unaware of the change. The phased approach also allowed me time to identify and train additional staff, and to obtain and implement the technology necessary to handle the

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION anticipated increase in call volume, and get everyone trained and comfortable with these new tools. In addition to helping the Victoria staff learn and adjust to handling larger volumes of increasingly complex accounts, the protracted roll-out provided the opportunity for me to interact with the regional insurance leaders, to allay their concerns

over having some of their clients accounts serviced by us. By starting the move with the simplest accounts, my staff gained confidence. As the Victoria staff absorbed each level of increasingly complex account, without degradation in service quality, the regional insurance leaders became more comfortable that the next transition phase would go more smoothly. That isnt to say there wasnt hiccups and bumps in the road. But these we addressed quickly with remedial or additional training, as soon as a problem or performance gap was identified. The Specific Problem The specific problem as the Frost Insurance Call Center ramped up for operation was a training and performance gap with existing staff, which may preclude them from handling a higher volume of increasingly complex insurance accounts. An extension of this problem was the necessity of identifying and training additional staff, some of whom would likely not have an insurance background. Associated with both of these was the necessity of introducing new technology to assist in managing the call volume and service quality. The time line for resolving all of this was relatively compressed, but the bank had provided a healthy number of resources to ensure success.

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION Alternatives To improve the base industry knowledge of our customer service representatives (CSR), we embarked on an initiative to get each employee professionally certified

through the Independent Insurance Agents of Texas, accreditation program (IIAT, 2011). We believed completion of this certification would also improve their respective levels of confidence, and assist in allaying the fears of the regional insurance leaders (no other office in the Frost organization had 100% of their insurance service staff certified; something we did eventually achieve). To refine customer service soft skills, we coordinated with the local college to adapt two of their continuing education courses (Victoria College, 2011,p.3), to specifically address the challenges the CSRs would face in the coming expansion of our mission and responsibilities. These adapted courses specifically addressed customer engagement, and gaining and creating a positive emotional connection with customers. To increase the level of comfort with both our CSRs, and the supported regional offices, we rotated our CSRs through the regional agencies to observe their staff, and learn the peculiarities of each client. This significantly reduced the level of anxiety for all parties concerned, regarding the impending transfers of account support. The bank provided the same software and operating platform to us, which was used by their customer support center at corporate headquarters in San Antonio. We also coordinated with them for training development and implementation on system operations, and to learn the capabilities of the system for management reporting and continuing operator training and quality control.

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION Conclusion The key to the successful development and growth of the Frost Insurance Sales and Service Center in Victoria was, in the end, the care that was taken in designing, conducting, and evaluating training to address the various knowledge and performance gaps, real and imagined, that existed prior to and during the ramp-up of the operation. The extended training program filled in actual gaps which the CSRs needed to feel

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confident handling the new accounts, and it gave us the foundation we needed to allay the concerns about the ability of the Victoria office to handle the new accounts. The gradual transition from easier accounts to more complex, also gave time for confidence to build, and for all involved parties to address and resolve issues with one phase before the next phase was begun. At my departure from the organization in 2007, the center was fully functional, and plans were underway to begin expansion of the centralized service to include small accounts from the employee benefits and life insurance books of business around the state.

USING INSTRUCTIONAL TECHNOLOGY AND DESIGN TO LEVERAGE CHANGE IN AN ORGANIZATION References Senate Banking Committee. (1999). Summary of major provisions. Retreived from http://banking.senate.gov/conf/somfinal.htm Frost Annual Report. (1999). Three centuries of business in texas. Retrieved from

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http://globaldocuments.morningstar.com/documentlibrary/document/930e47758e df58d6.msdoc/original Independent Insurance Agents of Texas. (2011). ACSR Program. Retreived from http://www.iiat.org/mx/hm.asp?id=pub_cd_acsr_prg Victoria College. (2011). Continuing education and workforce training catalog (p.3). Retrieved from http://www.victoriacollege.edu/images/adulteducation/ce_schedule.pdf