Marketing Agency of the Month
Generation four leads the change
New Mexico agency moves out of its comfort zone
By Dennis H. Pillsbury
The book title says it all: "Change Is Good...You Go First."
We all understand that change is something that happens and may indeed be good, but we all feel better if someone else experiences the change first so we can see that it works. And it's especially hard to change when what you're doing is successful—the old, "If it ain't broke, don't fix it" attitude.
Exacerbating the problem is that changes not of your making continue to come at you, forcing adaptations. It's hard to initiate change under those circumstances.
Since its founding in 1925, J.S. Ward Agency, Artesia, New Mexico, has seen its share of changes and, most recently, with the impetus provided by Anna Byers, the great granddaughter of the founder, has begun to pioneer new directions.
The agency was founded by Jesse Sterling (Fritz) Ward primarily to provide needed insurance coverage to the residents of Artesia and to the oil and gas businesses in the area. Fritz worked to become an expert in the coverages needed by the oil and gas businesses, particularly oil and gas bonds. "When he first started out," notes Gary Sims, president of the agency today, "Fritz used to manuscript the bonds. So he really got to know the business inside and out."
"Fritz kind of cornered the market," Anna points out. "It's difficult to write oil and gas bonds and there's not a lot of money to be made in that line, so many agents don't bother with it. But nearly every business involved in oil and gas needs the coverage."
Anna goes on to explain that the bonds are necessary to meet government requirements since much of the drilling occurs on federal or state land. Companies also can use letters of credit or meet financial responsibility requirements, but few want to tie up capital or take a large risk of loss, so bonds are the preferred mechanism for risk transfer.
"Fritz had the pen with the company that provided the coverage," she continues. "There wasn't another agency within 300 miles that could provide the bonds. And because he helped the clients obtain the bonds they needed, he also was asked to provide the other business coverages.
"He developed relationships in that marketplace and those relationships turned into new relationships."
The next generations come on board
In 1946, J.S. Ward was incorporated and changed its name to its current appellation, J.S. Ward & Son, Inc., when Edwin (Eddie) Henry Ward joined the agency. He followed in his father's footsteps, becoming an expert in the oil and gas field, as well as learning the coverages needed by people and businesses in the community. Thanks to Fritz's excellent tutelage, Eddie was quite ready to take over the helm when Fritz retired in 1965.
Unfortunately, 10 years later, one of those unexpected changes occurred when Eddie passed away. The family came together to deal with the ramifications.
His wife, Charlene Martin Ward, got involved at that point. She was able to get a temporary license due to Eddie's death and started working on turning that into a permanent license. Their son-in-law and daughter, Gary Sims and Sara Ward Sims, returned from Florida where Gary had been working as a teacher and coach. "And Granddaddy Fritz came out of retirement to help out," Gary remembers. "Fritz continued to help out at the agency from 1975 through 1991. He was always there for advice and counsel. I was an insurance illiterate when I came here," Gary continues. "Granddaddy Fritz would bring me in to meet long-time clients and say: 'I need you to meet Gary.' It would have been tough for us to survive without Fritz. But thanks to his help, we not only survived, we prospered. Sara helped out with the accounting and continues to serve as our accounting department. Everybody pitched in."
Insulated from the downturn
In what can be viewed as both a blessing and a curse, Artesia "is pretty much insulated from economic conditions that affect the rest of the country," Gary points out. "Our economy is dependent on farming, ranching and, of course, oil and gas businesses. We stayed a staid family business that made a nice living serving those niches. We were a very traditional agency, writing just about everything and never really venturing too far out of town. We did make three local purchases but didn't leave the Artesia environs until 2010, when we opened an office in Carlsbad.
"Oil and gas bonding remained our entrée into new business and our expertise [Anna points out that Gary went from insurance illiterate to becoming 'our expert in the bonding field'] resulted in our being sought out not only by businesses in that field, but by the insurance companies as well. We understood what they were looking for in a risk and also could deal with what is a very paper-intensive business. We recently wrote an account that required 137 bonds."
The catalyst for change
"We truly serve as risk management experts in the oil and gas arena," Gary points out. "But we recognize that we need to be more proactive in establishing ourselves as risk management consultants for all our clients, both current and future. And that has been the direction we are taking since Anna came on board in 2004."
Anna returned to Artesia after graduating with an accounting degree from Simpson College in Iowa and working for a year in Dallas. She brought with her a competitive zeal that has always been part of her nature and resulted in her winning a national championship ring in softball while she was at Simpson. (Her sister Abbie was an All American at North Carolina State and is now a coach at the University of Houston.)
"Mom tried to talk me out of returning to Artesia," she remembers, "because of the lack of a social life. There are only about 15,000 people in the area."
She went to work for an oil and gas firm and did tax accounting for a year. "After that, I felt I was ready to join the agency and talked to Mom and Dad about coming on board. They said they would have to talk to Grammy about it, and she said she would have to interview me before making a decision. It was a tough interview. She asked me about my goals and objectives and after it was over, I really wasn't sure whether I was going to get the job."
As it turned out, she did, and she started with the agency on January 1, 2004. "After two years, they let me buy an interest in the agency." She also got married in 2006, proving that the lack of a social life really wasn't a problem, and is the proud mother of two boys.
"Most everything that's going on right now is Anna's doing," Gary says. "She wants us to be more proactive and I agree with her. Most of the time I pretty much defer to her. We're willing to try anything once."
Anna picks up: "One of the problems with the oil and gas market is that it's cyclical. That can be especially painful when the bottom of their cycle coincides with the bottom of an insurance cycle. We don't have a huge retail sector in the area and were already writing the lion's share of the Main Street businesses. But one sector proved to be wide open. There was nobody really providing risk management services for churches in the area. We felt that if we provided the kind of service to that market that we did for the oil and gas market, we could really make an impact. We started a church program with Guide One and it's really starting to take off."
Anna continues by pointing out that the agency's reputation for honesty and integrity has served it well in its dealings with insurance companies, clients and other agencies. "The opportunity to expand into Carlsbad came about because of that reputation," she says. "Another agency was discontinuing its personal lines and small business accounts and they knew of our reputation and came to us to ask if we were interested in purchasing the book. The result is that we now have two producers and two CSRs in Carlsbad and, for the first time, are really having to learn how to manage and encourage producers who are not family members. It also made a significant change in our mix of business. Prior to the purchase, we were about 85% commercial lines and 15% personal lines. Our mix now is closer to 75/25." The agency produces about $13 million in premium and has 11 people in Artesia and four in Carlsbad.
The addition of producers who are not family members also means that "we really have to learn ways we can expand," Anna notes. "We've been in a very good maintenance mode and have great relationships with customers, but we need to continue to provide new opportunities for our producers to be successful. We have always been an agency that emphasizes team selling. Up until now, that team was family, which usually, though not always, made it easier to operate as a team," she says with a chuckle.
"Now, however, we need to moderate the cycles so that we can continue to reward our people. We are all on salary, which makes the team concept easier to implement, but it does mean that we need to grow and be able to reward our best producers. It also fits very well with my long-term goal to become more of a facilitator. I'm a much better manager than a producer," she observes.
Anna concludes: "We already have something in the works that should come to fruition in six or eight months. We really believe that we will be able to change the type of business we attract so that we become much more of a risk management consultant, with long-term client relationships.
"To help us with this effort, I'm attending workshops put on by Scott Addis and we have begun implementing his organic growth engine concept. Things are really starting to move."
J.S. Ward & Son represents the kind of entrepreneurial spirit that keeps the independent agency system fresh and vibrant. We are pleased to recognize them as the Rough Notes Marketing Agency of the Month.