Growing their own in Madison, Wisconsin

Rough Notes, Nov 2003 by Pillsbury, Dennis

Mortenson, Matzelle & Meldrum fosters and nurtures talent

Independent agencies that started in business in 1968 are considered to be relatively young; but when you add in the fact that Mortenson, Matzelle & Meldrum, Inc. (M3), Madison, Wisconsin, didn't start writing property/casualty business until 1985, you've got a virtual fledgling. And, while the management is chock full of young professionals, the agency has behaved with surprising maturity for one so young-having an active perpetuation plan that has already been implemented twice, having a strong focus on the client, including five full-time risk management professionals and having an employee benefits expertise that would be the envy of many, far older agencies.

As noted above, the agency started in business in 1968, when Loren Mortenson decided to leave the captive life agency ranks and strike out on his own. He was joined by Richard P. Matzelle in 1970 and the two operated the agency as a life and benefits agency. Toward the end of that decade, they looked at brokerage business as a way to grow. Then in 1985, there was a dramatic shift in direction as Charlie Meldrum and Rick Kekula, both of whom worked with a P&C insurance agency that leased space from Mortenson, joined M3 to establish a property/casualty practice in the agency. One focus they brought to M3 was a focus on homegrown producers instead of operating on a brokerage basis. The move to growing their own proved efficacious as is evidenced by the growth in personnel from 15 in 1985 to 100 by the year 2000. Today, the agency has 115 employees in offices in Madison, Milwaukee, Eau Claire, Wausau and Green Bay. Total revenues are on track to close the year between $19 million and $20 million. The property/casualty practice accounts for about 55% of revenues, and the employee benefits 45%. M3 began the geographic spread in 1998 when it acquired a property/casualty practice headed up by Dale Van Dam in Milwaukee and began an office there. Following that, it added people in the other three offices "to allow us to serve the needs of our clients and provide us a greater presence throughout the state," Mike Victorson, president and chief operating officer, points out.

Perpetuation

"Our perpetuation plan started the day we joined forces with Mortenson, Matzelle & Associates," Charlie Meldrum, CEO observes. "Key management people were groomed for leadership positions and stock was made available as quickly as possible. My experience as an insurance company marketing rep and producer for a large independent agency taught me that almost all agencies wait too long to perpetuate. When the owner decides it's time, he or she is surrounded by people who can't afford to buy the owner out." In 1994, the ownership group was enlarged to nine shareholders and Charlie Meldrum was named president and CEO. This year, the next generation of leadership was asked to step up when Mike Victorson was named president. "Our agency has a history of generously encouraging and offering opportunities to the next generation of leadership. Charlie, Rick Kekula and others were the beneficiary of this approach to running our agency, and that generous spirit was exemplified again this year. We now have 20 shareholders and a regular process for adding new ownership. Supporting and growing the next generation of agency leadership and subsequently perpetuating our agency is a part of our culture."

Rick Kekula, executive vice president, adds, "Of course, any perpetuation plan is greatly dependent on finding and having the right people. We've invested heavily in finding the right people for the roles that we need and in fostering and nurturing those people."

"As one of the newer shareholders, I am excited about the energy behind M3 and the passion we have in focusing on the customer," notes Dale Van Dam, executive vice president, branch operations. "We treat our team members with respect and trust, and our return on human capital will continue to make us a winning team."

M3 also has an intern program that has paid off. "We've partnered with some of our insurance companies on an internship program," Mike Moore, executive vice president of M3's property and casualty division says. "We get interns from the University of Wisconsin risk management department for which Loren Mortenson was a benefactor. The companies bring them in to their school and then they work at M3. We make certain the interns have a real function within the agency. Our people truly love the opportunity to work with the interns and share their enthusiasm. The interns leave here knowing what we do as independent agents. The program has really worked well. We've had three interns go through the program-one is now working at Chubb, one is working here and the other is back in school."

He continues by noting that the agency uses a fairly rigorous screening process for all new hires. "We have several people involved in the interviewing process so we get a better picture of the candidate and can determine how he or she will interact with the people with whom they would be working and whether they will fit into our culture." The two key areas in this process are: