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      Jeff Brunken of MGIS

      We Spoke to Jeff Brunken of MGIS About How to Build a Successful Service Business

      As part of my series about the “5 Things You Need To Know To Create a Successful Service Business,” I had the pleasure of interviewing Jeff Brunken. Jeff is the President of MGIS, a leading national insurance program manager for healthcare professionals founded by his later father, Dale Brunken. With an eye on innovation, Brunken remains committed to ensuring MGIS continues to lead the physician income-protection insurance market through best practices, innovation, and leadership. After 30 years in the industry, Brunken has spearheaded the Dale Brunken Memorial Student Loan Payment Award to meet the needs of the fast-moving pace of the healthcare industry, to celebrate the company’s 50th anniversary, and to disrupt student debt among healthcare professionals.

      Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

      My father started this business and I really had no interest in the “insurance” business as a young person starting out. As an aside, this perception of insurance as boring is a problem for the insurance industry. Young people aren’t interested in it. Anyway, I had graduated from college and was planning on a master’s degree in southern California. But they required two years of work experience, so I went to work for MGIS, my father’s business in northern California. The plan was two years, but MGIS gave me a project to build out a medical malpractice insurance partnership with an insurer headquartered in Chicago. To my suprise, I quickly became fascinated with the insurance and working with physicians dealing with malpractice claims. I caught the insurance bug and soon forgot all about moving on to my master’s degree.

      What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?

      As I continued working with medical malpractice insurance, I soon began working with Lloyd’s of London for more complex solutions required by some larger clients. This introduced me to the managing general underwriter business model where we became responsible for the entire range of insurance functions. We would design the insurance product and then get backing from Lloyd’s. We would then underwrite prospective clients, issue the policies, handle all administration and even arrange for the best claims handling professionals. Problem-solving for all of these aspects became increasingly more interesting. And I could see how doing so enabled us to be even more responsive to clients and brokers. As I became involved with the overall business, I had a clear vision from this prior experience how our overall business model needed to evolve.

      Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

      I’ve made so many mistakes I have a hard time picking one of them. But I do have a favorite experience that happened to me, at least indirectly, that taught me quite a bit. After being at the business for a couple of years, I was fortunate to travel with Don Ainge, an executive at the company, to meet with Richard Grant, the Executive Director of the Medical Group Management Association (MGMA). Our company had a national relationship with them, and this was an important meeting. On the flight there, Don spilled some orange juice on his suit coat. The steward quickly came to the rescue with some club soda and removed the spot. Neither of us had seen that before and we were amazed. Well, later that evening at dinner with Richard Grant, he splattered some steak sauce on the lapel of his very expensive suit coat lapel. Anxious to solidify the relationship and out of friendship, Don quickly said he knew what to do. He asked the waiter for some club soda and they quickly brought it. Don delicately dipped his napkin in the club soda and began wiping away the steak sauce. But rather than disappearing, the spot kept growing and getting worse. Don kept working it and it just kept getting worse. This was an awkward moment. Finally, Don got the waiter’s attention and asked him about the club soda. The waiter replied that they were out of club soda so he had instead brought 7up. Silence. Then Dick Grant started laughing and we were soon all laughing almost to tears. Dick and Don turned out to be lifelong friends. I learned a lot about how to build relationships from Don Ainge. As I write this, I realize I’ve never told Don that and I really need to!

      Thank you for that. Let’s now pivot to the main focus of our interview. Extensive research suggests that “purpose-driven business” are more successful in many areas. When you started your company what was your vision, your purpose?

      As I alluded to above, when I took over leadership for this company, my priority was to push our company to be best in class at the full range of insurance management functions. This included building people skillsets, investing in IT, and working through a LOT of change management to bring us to where we are today in being a respected insurance program manager.

      But as we’ve continued on our path, my attention and our collective focus shifted to our products. Over the years, we’ve learned we need to focus on quality, rather than breadth, even though that often costs more. For example, we have resisted offering insurance contracts with generalized, watered-down coverage features because we know they don’t perform the way our healthcare professional clients expect them to. This often makes life difficult for us when competing in the marketplace when everyone, clients and brokers alike, is facing cost pressure. So we’ve made a conscious decision to focus on quality and build our business around those products and features.

      What do you do to articulate or demonstrate your company’s values to your employees and to your customers?

      We have regular meetings at the department level to review progress toward our company multi-year strategic plan and also a review of the mission, vision, and value statements. We also had employee input in finalizing our mission, vision, and value statements. We talk internally about these things in various settings very often.

      Do you have a “number-one principle” that guides you through the ups and downs of running a business?

      I have found that there is a level of confidence that comes from knowing our business is operating with a very clear value proposition, one that is valued by the market. We will always have competition, but we clearly benefit in the marketplace to the extent we effectively communicate our value-proposition to the market. We are highly differentiated and that is what serves us well.

      Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

      My dark career moment occurred 17 years ago. As with many other industries, the insurance world was negatively impacted by the 9/11 tragedy. Insurers and reinsurers with suddenly reduced reserves had to pull back from classes of business or, in some cases, cease doing business altogether. We had several hundred clients who were left with no insurance options as a result of all of this. I worked toward creative solutions for our clients, but I felt like I was being torn apart by all the turbulence in the industry. I had to decide what to do and whether to “throw in the towel.” As strange as it may sound, it all came to a point for me on a business trip. I sat in my hotel room in Oklahoma City one night and, as I thought through it all, the very clear impression came to me that I needed to keep working through it and I would somehow get through all of it. At that moment, I made decisions about how to proceed with my business dealings and also my personal life. I was overweight at the time and basically since that day have worked hard to stay fit and healthy. For me, business and personal have always been very connected and resolving to get both areas back on track was powerful for me. As corny as it may sound, this experience and the years that followed were a strong reminder to me that “The Sun Will Come Out Tomorrow” as Annie reminds us.

      So, how are things going today? How did your values lead to your eventual success?

      Things are well. Soon after the above, the tide began to turn for me personally. A few years later, I was actually able to purchase the entire business from my partners. Today, we are growing steadily each year. Financially, we are in great shape. We are executing on our strategic plan. Our management teams are more cohesive than they have ever been. We are effective dealing with challenges as a team and we have good company-wide employee morale. In fact, we were recently recognized for the 9th time by Business Insurance as one of the best places to work in the insurance industry.

      Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service-based business? Please share a story or an example for each.

      • Understand your value proposition. This helps you understand what service you are actually providing and what client needs you are meeting. For us, understanding this has been the result of years of doing business and many, many discussions internally deciding what product focus we would follow — best quality or best price.
      • The right people. Providing the right service, once you clearly understand what that needs to be for your business and your clients, comes down to people doing it and doing it with conviction. People can be taught technical skills. But people come pre-wired (or not) capable of and desiring to serve others. In our case, it’s serving our brokers and the clients. We’ve been fortunate throughout our company to assemble the right people. We know what to look for and we stick with that template. I’ll give particular credit to Charri Maltby who manages our account manager team. This is about 30 people who provide daily service to our clients on a wide range of issues. For years, we have received consistent feedback about the outstanding service this team provides. I believe this is in large part due to Charri’s ability to select the right people and then effectively train them.
      • Align leadership with company goals. Several years ago, we adopted the RED management philosophy pioneered by Keith Farnsworth. The concept is to establish company goals among a broad group of management and be accountable to those goals on 90-day “sprint” increments. We’ve taken the RED concept and evolved it into our own version that also ties the compensation of our entire management group (25 people) to achieving the company and personal goals. This has aligned our entire management group and changed our company culture by creating transparency, teamwork among departments, and clear understanding of our primary company goals and metrics.
      • Stick to the value proposition. As mentioned, our focus is to provide the highest quality insurance products to our healthcare professionals. Often, this means our product costs more than our competition, so we are continually facing pressure to offer watered-down versions of our product. We have steadfastly resisted this as doing so would undermine our primary focus of quality. The proof is in the results. Although we compete directly with the big national insurers, we are still here and growing, consistently recognized as the leader nationally providing our type of insurance.
      • Give back in ways that reinforce the value proposition. We provide disability income replacement insurance to healthcare professionals nationally. We recently introduced a coverage option for paying off student loan debt in the event of disability. Student loan debt is a big issue these days. We are celebrating our 50th year in business this year. As part of that, we introduced the Dale Brunken Commemorative Student Loan Repayment Award. This has checked so many boxes for us. We recognize the role my father Dale Brunken played in establishing our business. We focus on our healthcare professional clients in an important, timely, and relevant way by repaying student loan debt. The award is given annually to a healthcare professional nominated by the brokers who work with us nationally. Entrees are reviewed and finalists are selected by a group of employees. We then recognize the winner and announce it internally at our company holiday luncheon. What a great feeling it was this year to make the call to Destiny Wholf, this year’s winner. Her inspirational story and dedication to serving patients really drives home to our employees what we do, who we serve, and how we aspire to do business.

      None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

      My father is my clear choice. Not only did he establish this business which makes this all possible, but he also taught me so much about how to conduct business and to do it with integrity. I can still remember what it felt like all those years ago when I first came to work. He had assembled a group of very smart and hard-working insurance professionals. They were all larger-than-life as individuals, but they worked very well together. There were big-time ups and downs back then as insurer partners pulled out of the business leaving us in crisis mode. MGIS rallied and kept things going. They also had a lot of fun together. My ideal for our company today is to achieve and maintain that level of camaraderie and respect.

      Not long ago, a longtime friend in the business stopped by our office to catch up. He told me a story about him and my father that occurred 40 years ago that demonstrates the level of trust he enjoyed. At one point, my father called this friend, who was a broker doing business with our company, to tell him we didn’t have the money to pay him commissions that month. This was back in the start-up days. My father explained to him that he had to decide what to pay: employee salaries or broker commissions. My father went on to explain that there were employees who really needed the money, that they were living from paycheck to paycheck and that he needed help (credit) from brokers like this friend. It was a significant amount of money, but this friend told Dale to keep the money, meet the other obligations and pay him when he could. Well, of course Dale paid every penny in due time. But things like that don’t happen unless there is well-earned trust and friendship. THAT is my goal for our business today.

      You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

      Where to start?! I have two ideas I would enjoy pursuing.

      The first relates to the student loan repayment award. For me this whole idea was inspired by a recent story I saw on 60 Minutes where NYU became a tuition-free medical school. It profiled several of the individual students and how the heavy tuition load affected them and had often steered them toward higher-paying medical specialties so they could more easily repay their tuition debt. One student in particular felt driven to pursue family practice medicine in under-served areas where the need for quality healthcare professionals is often greatest. NYU’s change to tuition-free was a game changer for her enabling her to pursue that.

      Why not create a movement, organized as a 501c(3), to support deserving healthcare professionals everywhere by repaying their debt? Support could be solicited from individuals and organizations interested in helping. Healthcare professionals could be nominated or even apply directly. Priority would be given to individuals practicing in the most-needed areas, often at lower potential compensation. This could have an impact on the growing physician shortage and particularly in those under-served areas of our society.

      I also feel strongly about immigration and supporting those individuals and families who want to be here in our country, build a better life here, and help our country be a better place. I have seen first-hand how difficult it can be to navigate the immigration process. And then once here, individuals have challenges effectively integrating.

      Many people want to help deserving individuals but don’t know how to do it or how to engage at a level they can handle. I’ve seen an app called “Just Serve” that provides opportunities to serve in the community and in levels and amounts that an individual can handle.

      It would be great to create a platform like this where individuals could find opportunities to help deserving individuals with life skills, job applications, English lessons, babysitting, handyman work — whatever the need is and in whatever time increments. Individuals could connect on an individual basis and make a difference in someone else’s life. If this took the form of an app, it would need to be promoted so people knew about it. There would need to be appropriate screening for individuals applying for assistance and those wishing to provide assistance.

      How can our readers follow you on social media?

      I’m on LinkedIn at https://www.linkedin.com/in/jeffbrunken/