All the folks who support this initiative to change the foundation of the company seem to be assuming that it is a slam dunk that It will assure the success of Allstate...
It may... but it is hardly assured....
Sears was Very successful at retail before it decided to diversity with the “Sears financial network.” In fact it was an American ICON as late as the mid 80’s...
They took their eyes off the foundation of their business (and yes Tom Wilson was a part of that leadership team late in the game that was involved in those decisions) and when they sold off the financial network for “shareholder value.”, they had lost that retail edge and the competition ate them alive leading to the dead hull of a company that they currently are...
Tom Wilson’s dream For Allstate is similar to the dream of 1970’s Sears leadership. Be one stop shopping for all customer needs. No longer just a direct sale insurance product company with a captured agency force. Be involved in technology, insurance analytics, etc.
Wilson and Shapiro have decided to rip apart Allstate at the foundation and turn it into something else than just an insurance company...
Will it work and will Allstate grow and be more successful....
Maybe....
Or maybe it will be another example of a company that took their eye off its foundation and was destroyed by it...
There is huge risk in sending much of your customer facing work to India, and forcing your employees to do more with
Less., angering your employee base including agents and trying to follow your more successful competition like Progressive and Geico to “be more like them” as opposed to being a leader....no one can say for sure if this “transformative growth” will be successful long term....
It will lead to short term “efficiencies” and short term spikes in profit and money in executive pockets...
It would be interesting to see Allstate 10 years from now to see if it is a successful
Corporate powerhouse because of these changes or if it is just another corporation destroyed by the greed and hubris of a leadership team that is not as good as they think they are??? Time will tell..
As a final thought, Glen Shapiro tried many of these same “efficiency gains” with Liberty Mutual and that company is hardly a prime example of a great American company from those efforts....In fact, Shapiro left that corporation with an employee base whose morale and trust in that company was decimated without any real growth towards leadership in the industry......
Time will tell what all of this means for Allstate.
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Allstate is making a very poor decision on charting the course they are currently on. I agree that some of the fat needed to be cut in Sales Mangement. Kudos to Tom Wilson, for changing the redundancies of 13 regions and consolidating to 4 regions. Moreover, the leaders chosen for the 4 regions are excellent choices. One can only hope that the company will give these 4 people the autonomy to make an impact on the areas of the country they represent. However, TC is embarking on a course that may not be repairable.
The Captive Agency force has been stretched financially to the point of no return. In the Chicago Land area there are about 50 agencies for sale that no one wants to purchase because of poor cash flow. Moreover, banks do not want to finance agencies anymore because of the unstable nature that Wilson has put the company on. Last time I checked the agency force was responsible for about 85% of the revenue that comes into the company. An unhappy agency does not equate well to any kind of growth.
Claims is on a perilous path also. Outsourcing to India and a reduction in domestic claims partners is a recipe for disaster. Moreover, small decisions such as only paying $19 a day for claimants to rent a car will further reduce the value of the Allstate brand. With so many claims folks being let go, says to me that Allstate is planning on not growing the property and casualty division. Last time I checked the phone warrantees being sold at Walmart does not bring in enough revenue to pay the electric bill.
They won't. I just don't think anybody cares.
They will probably get big bonuses for "saving the company millions"
I hope these 2 con men will get exposed as corporate raiders with an agenda of personal financial gains.
It has all the makings of a future episode of Dirty Money on Netflix. Falsely inflated stock price, executives getting fat bonuses based on the appearance of growth. The Allstate Good Hands he a become Greedy hands.
The best corporate decision ever made to change the culture of a company.......
Or the biggest destruction of a corporate brand since Sears....
Either one is possible....
To me the huge gamblle is that they think (maybe correctly, maybe not) that the employees that remain will be able to pick up and effectively handle the caseloads and work transferred to them by those that are gone. Couple that with the fact that some whol's jobs are ending are likely not putting their best foot into their work (who can blame them), it could be a disaster. UM claims alone could be an issue with many different Departments of Insurance and bad faith laws in the various states.
This is a huge gamble on their part. It may payoff as I said, but it's still huge and the damage untold done to the morale of those that remain will likely determine the fate of the company going forward. The stockholders will be pleased with the reduction in expenses. We will see how that plays out over the long term though.
A once great company that took pride in it's feeling of family and employee relationships has been sacrificed for dollars. It could easily end in disaster.
Love the down posts of people who apparently think that success and a lot of good for all is assured........
Must be bonus level who signed off on “transforming growth.”
You are right on point sir....
Tom Wilson wants to play the game on Warren Buffett’s home court and try to get into a price war with Geico....
Last time I checked Warren Buffett is pretty damn good at playing corporate chess...
If this does not work well there is no going back as the company infrastructure will no longer exist and the reputation of Allstate will be toast as it no longer will have any identity..
It has alienated the employee group that it needs to really drive the success.....and I truly question what type of quality service this company will be able to deliver particularly during the transition period so it could end up driving customers away as well.....
It’s going to be interesting to watch from the sidelines...
People keep saying that but I think the reality is different.
Speak to folks in ANI. Almost all of the companies are working for some american corporation. Why do you think they can't have american managers? It makes them subject to american tax laws.
This is much bigger than an Allstate thing. They held out longer than many others.
What's messed up is they've totally put the cart before the horse here.
"Transformative" growth would have been fixing Allstate's internal processes such that things moved smoothly enough for people to actually not have enough to do, at which point they would start to go 'uhh I don't have any work to do, maybe they are going to get rid of me'.
Nope, this slash and burn 'disruption' instead hopes everyone will figure out how to handle the increased workloads, while still having bad, wasteful processes in the meantime.
They'll quickly find once the complexities of certain tasks are outside of the 'process' of their outsourced workers, 'Mayhem' will pay them a visit. Cheap labor is cheap labor no matter what country they're in, handling a claim is not as simple as trouleshooting your cable modem.
You would think they learned their lesson.
I already see issues with some of the things they are “pre implementing” it’s not going to be pretty
Well said.....