Individual. Craig Johnson, FCCI Insurance Group
Key. Johnson, an eight-year employee with FCCI, was recently promoted to CEO. He replaces G.W. Jacobs, who plans to retire May 31.
Insurance executive Brian Makowski was stuck in a quandary in 2003 when he ran the interview process to hire a controller for FCCI Insurance Group.
Makowski, then head of the Lakewood Ranch-based firm's audit division, narrowed the choices down to two people. One candidate was a close friend who Makowski says was intimately familiar with the company and well qualified. The other candidate was Craig Johnson, a rising industry star from Baltimore who first heard of FCCI when he received a call from a headhunter.
Plus, a critical concern hung over the interview process: Makowski had to find someone who possessed both the quantitative financial skills and the quality people skills to make it long-term at FCCI. The latter requirement was especially key because FCCI, the fourth-largest private employer in Sarasota County, prides itself on its entrepreneurial work force that ardently follows a “do what you say you will do” mantra.
Makowski chose Johnson.
The selection was a success. So much so the FCCI board promoted Johnson to president and CEO March 17, after eight years in executive roles. Johnson, 42, replaces G.W. Jacobs, who will retire May 31 after 12 years as CEO and 22 years with the firm. Jacobs will remain on the FCCI board.
“Craig had the financial experience, but he also had a knack for getting along with everyone,” says Makowski, who now works in banking in Chicago. “It's a unique combination of both qualities you don't see too often.”
Jacobs and FCCI board Chairman John Stafford see the same skills in Johnson. “He has hands-on experience with most aspects of our business,” says Stafford. “He's very well-equipped.”
People who know Johnson, both in and out of FCCI, also describe a multifaceted executive, a leader who is both a geek and a gregarious fellow.
For example, Johnson has an uncanny ability to retain vast amounts of specific data. His total recall in important meetings, say several FCCI insiders, is akin to a pro golfer who recites the challenges of each hole in great detail. “He borders on mathematical genius,” says Stafford.
Johnson admits he does have a “pretty good memory when it comes to that kind of stuff.” Adds Johnson: “Preparation is key.”
The new CEO, though, isn't just a number cruncher. He also defies the stereotype of the ultra-serious, buttoned-up insurance executive. “People warm up to him,” says Jim Contis, a Sarasota-based money manager with Fifth Third Asset Management who has known Johnson for five years. “He respects everyone he runs into.”
Johnson's an avid sports fan, especially hockey and football. He has season tickets to the Tampa Bay Lightning. Moreover, in what a golfing buddy calls Johnson's three Fs — family, friends and FCCI — family always comes first. Johnson's been known to leave the office at 3 p.m. to meet with a teacher for one of his three children, then work again later.
That balance will surely be tested in Johnson's new role at FCCI. The firm, the largest commercial insurance underwriter on the Gulf Coast based on annual revenues, has come through the recession in relatively good shape. Net income in 2010 was up 27% from 2009, to $35 million. Premium revenues declined slightly, 2% to $461 million, but year-over-year profits rose.
The recession-era success lies partially in the company's structure, where it has no inside sales agents. Instead, it sells products to businesses through a large group of partner agents and agencies. FCCI doesn't sell homeowners insurance policies.
Still, with a presence in 14 states, the company faces stark challenges. For one, the industry is heavily regulated. And competition, especially in the Midwest, has driven prices lower the past two years.
Johnson plans to make sure the firm maintains its discipline to not cut prices just to gain a little business. In fact, Johnson says the company recently walked away from a potential $100,000 account when a competitor offered to do the work for $60,000. “We have to make sure the accounts we have are the ones we want,” says Johnson.
Johnson also faces what could be his biggest personal career challenge in his new job: to replace a legendary CEO like Jacobs, who shunned the spotlight while he steadily helped build FCCI into one of the most respected commercial property and casualty insurance firms in the Southeast.
The company, founded in 1959 as Florida Contractors and Construction Industries, grew total assets 109% during Jacobs' CEO tenure, to $1.8 billion in 2010. The firm's equity, meanwhile, the difference between assets and liabilities that's a key measure of an insurance firm's health, grew 74.4% during Jacobs' tenure, to $550 million.
“G.W. is leaving this company in excellent shape,” says Stafford. “There's so much upside potential to this company. I don't want to see us lose any of the progress we made under G.W.”
Johnson's first step when he officially takes over June 3 will be to handle the transition process. After that, he plans to embark on a growth strategy for 2012.
And while he seeks to make his own mark on FCCI, Johnson already committed to keep one Jacobs staple: He will personally meet with every new employee for a one-on-one conversation, just like Jacobs did. The firm has 680 employees.
Johnson will also continue the tradition of regular meetings with department heads, supervisors and groups of employees. Under Jacobs, those sessions were sometimes jokingly referred to as “Tea with Mussolini.” Johnson quips that he prefers “Coffee with Craig.”
Johnson's managerial strengths lie in his ability to relate to all levels of employees, FCCI executives say. “I believe in being frank and forthright with employees,” Johnson says. “Accountability is the key.”
Johnson's leadership style has been on display over the last eight years.
In 2008, for instance, Johnson was assigned to rework FCCI's information services department. The unit, made up of the company's internal IT staff, had gradually turned into a silo where productivity suffered, executives say.
Johnson first worked with the department head and identified some employees who were exacerbating the problems for a variety of reasons. “Then we made some tough calls,” says Johnson, in letting a few employees go.
Johnson next met with the FCCI executives in charge of human resources, marketing and claims. He was blunt: What are priorities and what can wait? Armed with answers, he went back to the IT department with a list of tasks, so the staff had a clear mission to execute.
Stafford and Jacobs made note of how deftly Johnson handled the situation. “Once people felt they had a say in the process,” says Johnson, “the other peripheral issues stopped.”
FCCI Executive Vice President Debbie Douglas, who has worked closely with Johnson since 2003, has another wow moment when it comes to the new CEO.
Douglas recalls early in Johnson's tenure at FCCI he had a supervisor, one no longer with the company, who had a grating leadership style. Morale suffered among the line employees in the department, says Douglas. Johnson diffused the situation by redirecting and counseling employees.
“Craig was a very good buffer for the folks below him,” says Douglas. “We survived that period because of Craig.”
Douglas, like Stafford and Jacobs, is confident Johnson will bring that brand of tactful tough love to the CEO chair. Says Douglas: “I think he'll be a good guardian of our special culture.”
Jacobs mentored Johnson for the last two years, although the promotion wasn't a certainty. Jacobs groomed a few others, and there were six internal candidates in total. No outside candidates were considered for the position.
Johnson says he knew he wanted to do something in finance from a young age, but he never dreamed this big. The financial figures proficiency stems mostly from his father, who ran an accounting firm in Baltimore. Johnson's mother was the executive assistant for a bank president.
Johnson earned his undergraduate degree and an M.B.A. from Loyola University in Baltimore. He stayed close to home after college, working for Deloitte & Touche and USF&G, a Baltimore-based insurance firm bought out in 1998.
Johnson embarked on an entrepreneurial adventure after the sale, when he and five USF&G colleagues started their own insurance firm, American Skyline. “Starting something fresh with a clean slate and building it from scratch was a wonderful experience,” Johnson says now, a decade later.
But in the early days, back in 2000, Johnson says the mentality was you “eat what you kill.” He recalls lots of long hours with lots of smaller paychecks. He and his co-founders met with at least a dozen possible financial backers until they found two who would invest.
That experience left an indelible impression on Patrick Watland, an American Skyline employee. Watland, now an insurance executive in Arizona, says Johnson's persistence was the jolt the company needed.
“The one thing Craig has that you can't teach is passion,” says Watland. “He's very passionate about being successful in business.”
Johnson had no intention to leave American Skyline, at least not until he received a call from a headhunter in 2003 about the FCCI controller position. He decided to check out the company while on a family vacation to Pompano Beach. He met Jacobs and Makowski, among others at FCCI, and was hooked.
Makowski recalls the risk he took in hiring Johnson over a close friend for the controller position began to pay off quickly. Indeed, in Johnson's second day he was vocal about some ideas for FCCI at an offsite strategic planning session attended by top executives.
“He wasn't just there to take a seat, which tells you a lot about his character,” says Makowski. “I think very highly of Craig. I'm expecting great things from him.”
Craig Johnson, appointed CEO of FCCI Insurance Group March 17, says one leadership book in particular has been a big source of inspiration. The book is “The 21 Irrefutable Laws of Leadership: Follow Them and People Will Follow You,” by John Maxwell.
Three principles from the book resonate for Johnson:
• Law of the Lid: Hire people smarter and better than yourself;
• Law of Connection: Leaders touch a heart before they ask for a hand;
• Law of Empowerment: Only secure leaders give power to others.