A dynamic vision and a bold leap of faith put
Milestone Risk Management & Insurance Services out in front

By Elisabeth Boone, CPCU

Milestone principals (left to right), Raymond A. DaCosta, client relationship manager; Sherlisse M. Ryan, director of operations; and Ronald J. Hoefer, CIC, president.

"... but I have promises to keep, and miles to go before I sleep."

That well-known line, from Robert Frost's classic poem "Stopping by Woods on a Snowy Evening," is more than just a pleasant childhood memory for Ron Hoefer, founder, president, and chief executive officer of Milestone Risk Management and Insurance Services. In fact, keeping promises--and helping clients fulfill their promises--is the very core of Hoefer's personal and business philosophy. Here's why ...

One day in June of 1970, Hoefer, a brand-new high school graduate, was at home with his mother, who was recuperating from cancer surgery, and his 14-year-old brother. Hoefer answered a knock at the door and saw a grim-faced police officer standing on the front step. At the officer's request, Hoefer fetched his mother, and the officer said, "Mrs. Hoefer, I'm sorry to have to tell you this, but your husband died of a massive heart attack this morning while driving to work."

In that instant, as his brother sobbed uncontrollably and his mother stared into space, Hoefer knew his life had changed forever. Soon it was discovered that his father, the owner of a small printing shop, had no will, no savings, and no life insurance, except for a $10,000 policy naming his business partner as beneficiary.

Hoefer, who had planned to attend the state university, enrolled in a local junior college and worked evenings to support his mother and brother. He also assumed responsibility for household chores while his mother underwent several more cancer surgeries.

"The one thing I never did was grieve my dad's death," Hoefer says. "Not once did I shed a tear, as I was too busy fulfilling a myriad of promises. Instead of exhausting me, these obligations fueled me with purpose. As I entered the insurance profession, I vowed I would make a positive difference for the clients I served. I would help business owners keep the promises they made to their families, to take good care of them financially no matter what the circumstances. I vowed I would do everything in my power so others would not end up nearly destitute as our family did."

Living the promise

Over the more than 30 years since his father's death, Hoefer has dedicated himself to "living the promise" and has built an organization that is entirely committed to that purpose. In fact, Milestone's motto is "We protect the promises you make." Located in Irvine, California, in the heart of affluent Orange County, Milestone faces formidable competition and sets itself apart with a business model that, as Hoefer describes it, focuses on "opening relationships, not closing sales."

Throughout his career, Hoefer has embraced a consultative style that has helped him forge enduring relationships built on mutual trust and respect. "The work I do is gratifying, and I'm always finding myself engaged in discussions with clients that have nothing to do with insurance and everything to do with building businesses of distinction, improving productivity, creating a safety-conscious work force," he comments. Until just a few years ago, however, Hoefer was an agency owner in the conventional mold, presiding over an entity amply staffed with aggressive brokers who "brought home the bacon" in exchange for hefty commissions. "I had 10 brokers, telemarketers, a marketing manager, and a level of activity that was the envy of every brokerage in Orange County," Hoefer says. "We were hot!"

New vision, new values

The larger the agency grew, however, the more Hoefer came to realize that his consultative, client-focused approach was not being emulated by the other brokers on his team. "Quite to the contrary, the business I was building with 'traditional' brokers was incongruent with everything I stood for," he says. In 1997, after months of deep reflection, Hoefer called the staff together and shared with them the values the new Milestone would stand for in the marketplace. "I explained that I did not expect them to be on the same page as me, but if they discovered they were not in the same book, they should graciously move on," Hoefer says.

Ron Hoefer's consultative style is based on establishing enduring relationships built on mutual trust and respect.

"Ihad no idea how it would feel to walk seamlessly in and out of my personal and business lives with the same values and ethics. It's an unparalleled feeling."

--Ron Hoefer

"Four brokers with over $1 million in revenue and four staff members chose to leave, and those who remained were aligned with my commitment: to build an agency where values were congruent in every relationship--employee, carrier, strategic partner, and vendor. I've purged every 'traditional' broker from Milestone and now employ skilled Client Fulfillment Managers to service our clients' risk management needs." This step was the first phase of Hoefer's new vision for his agency.

Traditional brokers, of course, work on commission ... but that's not the case at the "new" Milestone. "Everyone at Milestone is an employee," Hoefer explains. "They are neither independent contractors nor joint owners of their books of business. Milestone owns the business, instead of being simply a landlord for brokers." What's more, "Every employee is trained to provide a predetermined level of service expectations based on clearly defined processes with the client's needs in mind. Our process mapping was developed from the client's needs backward, not from our needs forward."

At Milestone, Hoefer continues, "Our service is designed to engage every employee of our client, from the CEO to the line technician, because only in this way can we become intimately aware of the client's core goals and values. Our Risk Management Survey is given to each employee so we can design a plan of action that focuses on the most important issues identified by the survey. Often there's a difference in perceived reality between the CEO and his or her employees. We add value by bridging this gap."

Milestone Enterprise Model

Phase 2 of Hoefer's new vision for Milestone was implementation of the Milestone Enterprise Model (MEM). Inspired by the ideas of agency management coach Roger Sitkins, MEM consists primarily of two intertwined service models: the New Business Process (NBP) and the Business Continuation Process (BCP). These two service models are facilitated by an electronic information infrastructure: GoldMine hosts the NBP and Automated Management Systems hosts the BCP.

The Milestone Enterprise Model, Hoefer explains, is an outgrowth of the agency's philosophy: Our success is only as great as the strength of our relationships. We believe in relationships, not renewals. We pride ourselves on opening relationships, not closing business.

"We reinforce this philosophy by creating a merit system within the agency that rewards and compensates based on the strength of the relationships we build with our colleagues, clients, and advisors," Hoefer says. "Our relationship-centric philosophy also extends up the value chain to our vendors and carriers, who recognize the value of and endorse the Milestone philosophy. In practice, our philosophy results in fewer claims made against our carriers, producing savings for them that are passed on to our clients as lower premiums."

Clients align with values

How did Milestone's clients react when Hoefer began to transform Milestone from a traditional broker-based operation to the entity it is today? "For new accounts, there was no transitional challenge to overcome, only the pleasure of experiencing an agency that actually 'walked its talk,'" Hoefer responds. "As for existing clients, all of them were ecstatic upon our delivery of additional value-added services. Once the Enterprise Model was fully implemented, we did lose about $100,000 in revenue--and those were mostly commodity-driven accounts. Good branding does two things: It attracts those in alignment with our values and, just as important, repels those not in alignment," he declares.

"We insist on dealing only with leadership-driven companies, and I personally underwrite the integrity-quotient of our company," Hoefer continues. "We have no problem saying no to a prospect if he or she does not meet our underwriting criteria. By the time the prospect passes our scrutiny, he or she is well positioned to qualify for the best possible premiums as we orchestrate the submission to our aligned carriers. Our Milestone Enterprise Relationship Contract (MERC) spells out in detail the underwriting criteria and service standards that Milestone, client, and carrier agree to."

Sharing the vision

Just as Milestone seeks clients, prospects, and carriers that are in alignment with its values, so does it strive to build a staff that embraces the agency's principles. A true meeting of the minds exists between Ron Hoefer and Ray DaCosta, who joined the agency in December 2001, as director of marketing and business development coordinator. DaCosta brings a strong background in financial services and, more important, an inside-out commitment to the values of the "new" Milestone.

"I believe I was drawn to Milestone as a result of some external conditions that forced me to rethink my priorities," DaCosta says. "Because of the reminder we received on 9/11 that life is a precious gift, I, like many others, took inventory in my life and reconciled those things that were no longer in alignment with who I was. I can only define Ron's and my meeting as synchronistic. After 10 years in high-profile institutional sales that revolved exclusively around product and price, I made a pact with myself that I would never return to a commodity-driven industry. In fact, I would become a champion for those who were demoralized by the battering associated with competing in a one-dimensional marketplace. In order to accomplish this, I understood that I needed to become a multi-dimensional professional who could bring a wide array of values and services to my clients and my employer.

"Coincidentally, Ron had been experiencing a revelation of the same nature; and when we met, our planned one-hour meeting became a three-hour summit on the changing nature of the financial services industry. Ron and I discussed the state of the insurance industry and the evolution that would be necessary to heal the self-inflicted wounds and dispel the perceptions associated with a one-dimensional service. We both agreed that the facade had to be torn down and the model had to be recreated in the name of values, principles, and professionalism. In order to restore some legitimacy to this industry, we had to take a stance and the effort had to start with us."

The entire staff of Milestone is dedicated to "living the promise" by providing a level of service expectations that are based on the company's clearly defined processes that, in turn, are based on the client's needs.

As a newcomer not only to Milestone but also to the insurance industry, DaCosta offers his perspective on how new clients respond to the agency's relationship-centric approach to doing business. "In a word, I'd say they find it refreshing," he comments. "I don't believe other agencies provide nearly the same level of service, education, collaboration, and consultation with genuine concern for the client's circumstances as does Milestone. By the time we complete the first phase of the Risk Reduction Approach (a trademarked process of the Sitkins Group), the prospect has run the entire gamut of emotions, from disappointment (in his/her current agent), to relief (when we showcase our strategies), to elation (when he or she realizes that these services are all value-added and are provided at no additional cost). The most common explanation we receive for why prospects become clients is 'peace of mind.' Our approach instills faith in our clients. Our clients are confident that we will deliver what we promise. Our three-party Milestone Enterprise Relationship Contract defines the responsibilities and obligations of all parties to the contract: the client, the carrier, and Milestone. In order for us to open a relationship with the prospect, he or she must understand and adhere to the terms of the agreement."

Milestone's director of operations, Sherlisse Ryan, is another key associate who's wholeheartedly committed to Hoefer's vision for the agency. A 15-year veteran of the insurance industry with experience on the carrier, wholesale brokerage, and agency sides, she joined Milestone two years ago. Ryan is responsible for training, mentoring, and monitoring all employees; for creating, implementing, and improving the agency's processes; and for maintaining and upgrading its network programs and workstations. In addition, she services all of the agency's VIP clients directly.

"I'm constantly on the lookout for new insurance programs, carriers, vendors, and strategic partners to enhance our agency's value-added services," Ryan explains. "In doing these things I take Ron's vision and create a way for everyone we do business with, including employees, to see and feel the Milestone difference."

In Ryan's view, new clients choose Milestone "for the same reasons our employees came to work for us, including me! The enterprise relationship is very meaningful to our clients. They can count on getting more value out of our relationship, with competitive pricing. They also know that we take ownership in resolving issues to closure and we act proactively whenever possible. Although it's sometimes tough for them, they appreciate that we expect them to be accountable as well," she says.

With 17 years of insurance company experience, Cathy Sariana is a strong asset to Milestone in her position as service manager. She joined the agency two years ago, and her responsibilities are to assist producers with the business continuation process (renewal process) and to service clients, companies, and Milestone staff. Asked to describe the ideal Milestone employee, she responds: "A self-motivated individual; someone who can anticipate and prepare for the next question. Someone who owns the process and takes responsibility instead of placing blame on others. A person who communicates well and shows empathy for others."

Assist from "The Coach"

Known to his clients as "The Coach," Roger Sitkins and his associates are providing strong guidance to Milestone as it transforms itself from a commodity-based operation to an entity that seeks to create enduring relationships.

"I joined the Sitkins 100 on the first call Roger made to me," Hoefer says. "I had known Roger for 15 years and had previously attended one of his Producer Camps. I knew he was process driven and, most important, a Michael Gerber
E-myth fan. I was in the E-myth Business Development Program at the time, and I knew that when I joined Sitkins many of the processes I had developed and those I still needed to develop would be in alignment with my vision. Milestone and Sitkins are congruent in philosophy, strategies, ideals, and objectives. Being part of the Sitkins 100 has put Milestone on a fast track to achieving our goal of building a process-driven, vision-driven agency where we 'own' the processes and 'own' the business and 'own' our destiny!" Hoefer says enthusiastically.

DaCosta expresses high praise for the Sitkins approach to training producers. "The Sitkins Producer Camps have been instrumental in restoring confidence and self-esteem in our producers," he remarks. "The hard market can debilitate a producer. Roger has provided a framework for conducting a powerful consultation. This approach arms the producer with tools that empower him or her to conduct a multi-dimensional relationship and risk audit. This combination of firepower augmented with the support of a professional business enterprise allows our producers to use their own professional discretion in determining whether a client is a good fit for our model and for their book of business. Milestone encourages our producers to constantly raise the bar, and raising the bar requires confidence and self-respect. This is how Roger has contributed to the success of our model."

Ryan concurs. "Roger's principles are incredible," she says with enthusiasm. "He is an awesome coach. The non-competitive nature of our Sitkins 100 meetings allows every agent the opportunity to share resources and ideas. His coaching has helped all of our employees act as a team. The Sitkins 100 members are a dynamic group that has assisted us with innovations, ideas, and constructive criticism, all of which help us create an agency of distinction."

Adds Sariana: "The core of Sitkins resonates with Milestone's Enterprise Model. The heart of the philosophy is based on a meaningful relationship between clients, carriers, and Milestone."

Hard market "proving ground"

As capacity shrinks and premiums soar, independent agencies around the country are struggling to find markets and retain their often disgruntled clients. It's not surprising that the leaders of Milestone see current market conditions not as an obstacle but as an opportunity.

"The hard market serves as an ideal testing ground for the Milestone Enterprise Model," DaCosta observes. "We are experiencing sustained growth even in the current market climate. Our clients remain well informed of changing market conditions on a regular basis through strategy meetings in which we devise solutions to meet the demands of the hard market. It's in times like these that our stock appreciates considerably because our clients need us most. The marketplace is very temperamental at the moment; it reacts callously to poorly managed risk environments. Businesses that are being stretched by a receding economy can't afford to trust their exposures and liabilities to the average agency. One mismanaged risk can significantly erode a business's financial stability and continue to punish it for years to come," DaCosta remarks.

"Milestone shepherds safety, loss control, and claims management into our clients' businesses in order to buy down their total cost of risk," he continues. "Our Enterprise Submission presents the insured's risk environment as a well-managed risk that is more attractive to the underwriter. Our carriers know that if Milestone is representing the insured, we have done a comprehensive job of reducing exposures. As a result, our declinations have been few and far between this year. Essentially, the hard market allows all of us at Milestone to further distinguish ourselves from competitors and strengthen existing relationships."

Adds Ryan: "The hard market makes our relationships stronger. Because we represent a small number of markets, current conditions have strengthened our relationships with the best carriers on our list. New and current clients need our stature with our carriers to receive the very best pricing. Responding to the current situation in California's work comp climate, we've hired a full-time claims specialist who is dedicated to mitigating litigated claims, reducing reserves, and educating our clients and their employees. This is one of our value-added services that will help us keep premiums as low as possible for our clients."

Consistency of values

Before embarking on the transformation of Milestone from a commodity operation into a relationship-driven entity, Ron Hoefer says, "I had no idea how it would feel to walk seamlessly in and out of my personal and business lives with the same values and ethics. It's an unparalleled feeling." Hoefer's associates express the same enthusiasm.

"He's right!" exclaims Sherlisse Ryan. "My personal values and ethics (like those of all our employees) do not change when I go home at night. I feel the Milestone family is much like my own, with the same level of respect, accountability, and satisfaction."

"I believe it was comments like Ron's that became the catalyst for a highly functional working relationship between us," Ray DaCosta says. "In the past I've worked for managers who behaved one way in the office and an entirely different way outside the office. It was quite unnerving, because I knew that somewhere in the middle existed reality. It never fostered a healthy working environment. At Milestone we're adamant about respecting ourselves and, consequently, one another. I believe decisions aren't made for us but by us. A victim mentality does not exist here; we will not accept it. We are responsible for our own successes and, likewise, our own failures."

If it's up to the visionary leaders and associates of Milestone, it's a virtual certainty that this ever-evolving agency will continue to surge "miles ahead." *

Milestone's goal is to "help business owners keep the promises they made to their families, to take good care of them financially, no matter what the circumstances," according to Ron Hoefer.