Hall of Fame: Jack Salzwedel’s empowering leadership

When you sum up the contributions of Jack Salzwedel, chairman and CEO of American Family Insurance, one word comes to mind — empowerment. He empowers employees and entrepreneurs, and he’s working to do the same for the economically disadvantaged.

Nominated for the 2015 Hall of Fame class by 2014 inductee Dan Rashke, CEO of Total Administrative Services Corp., Salzwedel is especially pleased to be voted in by sterling business peers, especially three people he’s served with on behalf of the United Way of Dane County. “As I look up and down the list of the previous Hall of Fame winners, it’s a group I have a lot of respect for,” he says. “I call many of them friends, so it’s very nice.”

Leaning on lean

Salzwedel’s “lean” philosophy of turning American Family’s 1,500 management employees into coaches who empower staff to solve problems not only unleashes the potential of non-management employees, it prepares them to become managers themselves. Lean is a process-improvement method more commonly employed in the manufacturing sector, but it can be applied in a variety of industries, as Salzwedel explains, to move decision-making down in an organization.

Salzwedel estimates that American Family has upwards of 20,000 people that rely on the enterprise for their livelihoods, including agents and their staffs, “Am Fam” employees, and then employees at affiliate companies, as well. “From that, we’ve probably got 1,500 to 1,600 actual management folks, so when you look at the number of employees we have, you can see that we have many, many more actual employees,” he says. “So the whole thought is about trying to unleash the potential of those folks who are not in management to become more engaged in their work and more energized about what they are doing, to better buy into the mission of the organization, and to deal with customers better.”

At American Family, lean is less about turning managers into coaches and more about empowering non-managers, and it’s also about giving managers a better sense of the difference between managing and leading. “We’re not saying you need to move between being a manager and a leader but you need to be both,” Salzwedel explains. “You need to balance both and know when that management technique is important and when that leadership or coaching technique is important.”

Since employees — management and non-management alike — feel more engaged in the business, buy-in is less of a challenge. Salzwedel recalls a conversation with a call center employee who has been with the company for only two years and feels so energized about its direction that a long-term career aspiration is to be an underwriting manager or supervisor. That would be music to any insurance executive’s ear, and Salzwedel knows it’s a byproduct of such empowering programs.

Out of the mainstream

Salzwedel’s approach to fostering innovation, in both new (new stream) and existing (mainstream) business space, has led to investments in insurance-related online businesses, the launching of a data science and analytics lab across from the Overture Center, the ramping up of American Family Ventures’ investment activities, and programs such as the gener8tor accelerator. His support and vision for StartingBlock Madison is to leverage Madison’s many business resources to build the next generation of businesses.

The data science and analytics lab houses a big data, innovation lab along with business development personnel who attempt to map the organization’s next business investments. These new-stream investments attempt to deal with today’s volatile business world, which is growing more chaotic thanks to the uncertainty of new and disruptive technologies, the more complicated nature of business, and the ambiguous markets that businesses operate in.

In changing the company’s investment portfolio with American Family Ventures, the company invests more in innovative startups that operate in space that’s adjacent to its traditional insurance space, which is still where the bulk of its customers and revenue come from. American Family then drives these innovations back into both the new stream and the mainstream.

One recent example of a mainstream innovation is its partnership with Nest, a Google-owned maker of sensor-driven, Wi-Fi enabled home gadgets like thermostats, smoke detectors, and security cameras. That will enable American Family to analyze some of the data generated by the use of these products to improve the operation and safety of homes it insures. “We fairly quickly, through that partnership, have made Nest products available through our agency force,” Salzwedel notes, “and we’re in the process of rolling out discounts on homeowners insurance for folks who will put Nest products into their home.”

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Fomenting formation

Salzwedel’s vision for StartingBlock Madison is not only to address a local business formation challenge, but also to build on existing business and community-building assets by giving entrepreneurs the resources they need, including the synergies of operating in a shared space with other startups. The goal is to find the next Epic or Exact Sciences and to make sure other promising, next-generation startups survive in the crib.

“We’ve got a world-class university, we’ve got state government, we’ve got a great arts environment, we’ve got a great public library, and we’ve got the people who are starting major businesses involved in this entrepreneurial network,” Salzwedel notes. “What’s difficult is the infrastructure, whether it’s physical space or access to startup support, legal help, business planning help, or funding.

“It’s difficult for them to get things going here when there are areas like California, Boston, or even Chicago where those types of resources are available,” he continues. “So StartingBlock is, in my view, an effort by many of us to retain the best and the brightest and give them access to those resources.”

A former United Way of Dane County campaign chair, Salzwedel and American Family support the new HIRE Initiative through the Pathways Out of Poverty program to help economically disadvantaged people find good paying, long-term employment. Salzwedel is among those who believe the community needs a poverty-busting strategy, one that addresses barriers to employment like transportation, childcare, and affordable housing, and one that gets employers more actively involved in the mutually beneficial exercise of workforce development.

Dealing with those stumbling blocks in a more intensive way holds the promise of taking the fight against poverty “broader and deeper than it is right now,” he says.

Salzwedel’s involvement is in keeping with the tradition of his predecessors, Harvey Pierce and David Anderson, who plunged headfirst into local philanthropy with the believe that employers have an obligation to create better communities for their employees to live in. Hence, the company’s continued support of American Family Children’s Hospital and its continued support of UW–Madison, including a $40 million pledge for endowed chairs and sponsorship of UW athletics. 

The hospital will be a source of ongoing support, particularly because more floors are needed and because the technology that now goes into that hospital is very different than it was the day it opened, and that technological change will only continue. “It’s a continual effort to keep serving as many sick kids as possible, so the hospital has expansion plans, which we certainly support,” Salzwedel explains. “It’s a real source of pride for the employee group at American Family. We do a lot of things in the community, but I would say that’s one of the things employees look at with a real sense of pride. We have a special place in our hearts for American Family Children’s Hospital.”

Salzwedel is even trying to empower aging golfers by throwing American Family’s support behind Steve Stricker’s efforts to bring a Professional Golfers Association Senior Open golf tournament to University Ridge Golf Course, perhaps as early as June 2016. Salzwedel believes it has the potential to be fantastic event for the city, given the support of Stricker, a widely respected PGA golf professional who will be going on the senior tour in a couple of years, an outstanding course that will look marvelous on the Golf Channel, and the prospects for strong community engagement. That last piece, including more corporate sponsors, is all that’s really missing.

“We’re not able to make this happen with just one company,” he states. “You’ve got to have additional companies, additional sponsors, step up and help, so we are in that process right now of trying to identify who might be partners to pull it together and make it all happen.”

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