If you want to build a company that lasts over time, why not start by building a “forever” company?
The question, of course, is how do you become a forever company? I sat down with J. Powell Brown, CEO and president of Brown & Brown, Inc. to get his thoughts about building successful businesses over time. Brown & Brown is head-quartered in Daytona Beach and over the past 79 years has grown into the sixth-largest insurance company in the U.S. — and the world.
Brown shared with me his concept of building a forever company. According to him, there are six keys:
Teammates, not employees
First, change your mindset about your workforce. Don’t think of them as employees but rather, as your teammates. By doing this you will work better together, like a sports team, like a Miami Heat or Marlins. Or like the Orlando Pride women’s soccer team.
It is important to make this shift in how you think of your people because they are your most vital asset for short-term and long-term growth.
“At Brown & Brown, it’s all about the people,” Brown said. They have 8,600 teammates, and they view them as a huge benefit. “We want the best people on the field at all times,” he said.
It’s also a challenge.
“Our success depends on our ability to continue to attract, retain, and reward high quality teammates” for the headquarters in Daytona Beach and offices across the country and overseas, Brown said.
The second key for long-term success is to nurture a culture of entrepreneurship throughout the company. “If you empower the teams in each of your offices to chart their future growth at the local level, they will feel inclined to try out new things, test ideas, be innovative and experiment with change,” Brown said.
By doing this, your teams will work more like startups. They will become engaged in the business and its success, and your company will be able “to draw upon all these capabilities across the entire organization,” he said.
Another way to build entrepreneurial spirit in your team is to promote an ownership culture. “At Brown & Brown, nearly 30% of the company is owned by our teammates. They have a vested interest in the company’s success. The better their performance, the better the company does and the better their shares do,” says Brown.
With an ownership culture, Brown believes teammates will go out of their way to keep customers satisfied. In fact, Brown & Brown has “directors of first impressions” as receptionists, a reflection of how involved they feel in working to be a part of the company’s growth.
Focus on the Basics
The third key to building a sustainable business is to focus on the fundamentals of what you do and who you are. When people ask Brown what he does for a living, he tells them that he sells insurance.
“That’s what I do,” he said. “I’m an insurance salesperson that does a number of other things during the day. I will always be an insurance salesperson.”
A great example of focusing on the basics is Vince Lombardi, the legendary football coach. In 1961, he gave a pep talk to his Green Bay Packers team on the first day of training camp. The team had returned from the break after squandering a fourth-quarter lead to lose the NFL Championship the previous season.
What did Lombardi tell them?
“Gentleman,” he said, holding up a pigskin. “This is a football.”
He went on to go over the basics of playing football with his players, from blocking to passing and tackling. The result? The Green Bay Packers went on that season to beat the New York Giants 37-0 to win the NFL Championship.
The lesson is simple. Excel at the fundamentals — that which everybody else takes for granted — and you will have a greater chance of long-term success.
That’s what happens at Brown & Brown. If you ask any senior leader in the company, they’ll tell you the same thing: they sell insurance. “That’s just who we are,” Brown said.
The fourth secret for success is to invest in your community. According to Brown, “If the community where your teammates work is attractive, they will want to work there and grow personally. More people will want to come, and this will have a positive impact on local businesses, schools, restaurants and the housing market. It will also widen your pool of potential teammates as the company grows.”
Brown & Brown is doing this in Daytona Beach, where Brown’s grandfather started the company in 1939. They’re building a 10-story, $25 million corporate headquarters and campus downtown. It’s part of the company’s strategy to increase annual revenue to $2 billion, up from over $1.8 billion in 2017 and is a major investment in the community.
The company plans to create 600 jobs over the next five years, and to do this there needs to be a community with the amenities to attract future teammates to live there. There needs to be arts, culture, good schools, a low cost of living, and a good lifestyle.
Brown & Brown is a part of the community and must not only be “good corporate citizens,” but also “good citizens in our communities,” Brown said.
Learn from Failure
Another key for long-term success is to understand that you are going to fail – probably often.
Brown says, “You must understand that failure will happen, but you mustn’t let that stop you. If you fall, get back up. To grow you must take risks, and each risk poses the possibility of failure.” However, Brown believes that as you take risks and learn from overcoming challenges you will be better prepared to know what it takes to be successful.
“It’s not a question of if you’re going to hit a bump in the road,” he said. “It’s a question of how you get back up off the street when you hit the bump, and if you hit more than one then how do you get back up and get back up again, and again, and again.”
This attitude will better prepare you for the challenges of growing a business over time rather than worrying about each bump. It’s also helpful. According to Brown, “The best way to learn is the hard way.”
He speaks from experience. When he became president of Brown & Brown in 2007, it was the first year in the history of the company that it shrank. It did not grow organically, and that continued for five years as the economy suffered. But looking back, Brown said it was something that he and the company had to go through. And the experience made him a better leader.
When business is down, he’s learned to press on and learn from mistakes. He has found the best way to push forward is to strive “to execute better each and every day,” and to make those tiny gains that will add up to a more significant win.
It’s a strategy made famous by Woody Hayes, another celebrated football coach. In his days at Ohio State, his conservative style of offense was often described as “three yards and a cloud of dust.” Each time the ball is snapped, the strategy is to advance three yards and gradually the team will muscle forward to reach the goal line.
Brown’s sixth key to building his forever business is “being able to see around that corner” and “to anticipate things that may or will occur in all kinds of situations.”
This is a vital trait, especially today, because every business must adapt to the constantly changing needs in the marketplace as the threat of disruptive technologies hit most, if not, all industries.
But how can you see around the corner and how do you know if you are ready for tomorrow?
Brown’s advice is “Experience is the best way. Over the years, your team will hone its ability to anticipate what could happen,” Brown said. “It’s not easy to foresee challenges, but if you embrace failure and keep moving forward, your company will advance three yards and then another three.”
When growing your company, Brown believes another important question to ask is how do you handle failure?
In sports, you win or you lose, but you can learn more from losing, Brown believes. When his four children lose a soccer game, he said they’re bummed. But he tells them that they can learn “something more valuable” than when they win. In business, more is at stake, of course. There is the risk of losing your savings. But you still have to take risks to grow — and you still have to face the challenges, the ups and downs, he said.
If you are disciplined and conduct business according to your principles, then you will advance over the long term. It may be hard, and there will be many voices saying do it another way, but you must believe in yourself and “do it your way.”
This forever company strategy has worked for Brown & Brown. As the economy recovered, business improved and the company has done more acquisitions. Brown & Brown has grown revenues from just under $1 billion in 2010 to over $1.8 billion in 2017 – an 80% increase.
How? It takes “a lot of hard work, a lot of discipline, a lot of hiring the right people,” Brown said. That’s what he believes is at the core of building a forever company.