CPI Forges New Growth with Help from Andy Birol

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CHALLENGE:
Customer service is the bread and butter of any successful company, as Jim Hopkins, CEO and founder of CPI, a Solon, Ohio provider of benefits, payroll, administrative and human resources services, knows. Rapid growth and a laser-like focus on satisfying customers have made CPI healthy but still hungry. In its first six years, the company had grown about 20% per year, and as opportunities in the marketplace kept expanding, CPI was ready to leverage its technology and its dedicated, client-focused staff to seize them. “I’d read enough books and talked to enough smart people to know that we needed to turn from entrepreneurial to professionally managed,” said Hopkins, “but I needed help to set things in order.”

SITUATION:
Founded in 1998 when Hopkins joined his benefits brokerage firm to two other small firms, CPI carved out a name for itself by helping companies navigate the increasingly complex (and cash-consuming) terrain of health insurance. In legal terms, CPI is actually four separate businesses. The core company, Corporate Plans, Incorporated, was the brainchild of Hopkins, who blended CPI’s expertise to concentrate on employee benefits. Split-funding was CPI’s main innovation; it helped clients cut the costs of health insurance while maintaining quality health care. Over the years, Hopkins added Corporate Payroll, Inc., to leverage new technologies and tie open enrollment (for benefits’ administrators, what tax season is to CPA’s) to payroll. Planning services, including 401(k) administration, were added in 2003 with the incorporation of Corporate Planning, Inc., and just this year, CPI-HR was created under the direction of Jim. In a nutshell, “CPI Version 4.0” can replace all but the top-level strategizing of a company’s human resources department. “At many companies,” said Hopkins, “good HR people get bogged down in all the non-strategic tasks. We can outsource benefits and administration to let these companies focus on strategizing for future growth. The breadth of what we’ve added is astonishing. We’ve gone from a benefits shop to COBRA, payroll, 401(k), high-deductible health plans, planning—in other words, total HR outsourcing.”

So, how does a rapidly growing firm dedicated to helping other rapidly-growing firms transform itself from an entrepreneurial venture to a professionally managed company? Jim recognized he needed outside assistance and called Andy Birol.

THE BGC SOLUTION:
“With super-growth come growing pains and challenges,” Andy said, “and CPI is a prime example.” Andy began by interviewing one-third of CPI’s employees and many of its clients. The results surprised. “He came in one day almost ecstatic,” recalled Hopkins, laughing, “even though it wasn’t all good news. He said he’d never had a company with the internal issues that we were facing, but such happy customers.” Clients gave glowing accounts of the company’s staff as well as the results they produced. This was particularly gratifying for Hopkins. “It was a reflection of our strength in people,” he said. “Our service and sales teams are made up of caring, super people who dedicate themselves to making clients happy, and that’s how we’ve grown to this position.”

However, happy customers aren’t necessarily satisfied customers. CPI’s clients were so taken with the firm that many of them expressed a desire for more seminars and information services. “We found that clients want us to be more proactive,” said Hopkins, “and that opens up new avenues for us generate revenues and deepen relationships.”

In terms of the organization, Andy found areas to improve. “They grew so fast, and there were so many changes,” he said. “It can be dizzying. But to keep growing to the next level, which CPI is certainly ready to do, they needed to have systems in place to sell, deliver, and service more efficiently.”

Andy agreed that establishing a management team was a critical step, and he advised Hopkins to place a new priority on finding customers. A careful analysis of clients, which included looking at size, revenue, and profit potential for CPI, showed that the company wasn’t fully leveraging its Best and Highest Use as a “back office” administrator to attract new business. Like many entrepreneurial firms, CPI had grown up with an “if we build it, they will come mentality,” a conviction that providing great products and services would automatically grow the company. Andy encouraged Jim Hopkins and his team to sell larger cases, ask for and follow up on referrals, and quicken the pace of moving from initial sale to multiple lines of service.

One of Andy’s key suggestions was that Jim Hopkins focus on his personal BHU of selling products and services he believes in. “Jim is a high-performing individual who is set up to transition from superstar salesperson to entrepreneur, and now from entrepreneur to corporate manager,” noted Andy. “He is a rainmaker and an ambassador for his business. And he needs time to developing new products along the line of Split-funding, which was what put CPI on the map.” “I was wearing about 15 hats simultaneously,” noted Jim with a chuckle, “and Andy had me take off 14 of them.”

CLIENT RESULTS:
After nine months of working together, Andy is full of praise for Jim Hopkins and his company. “What Jim has done,” he mused, “is transform himself from a superstar salesperson to a successful entrepreneur, and now to a corporate manager” in under ten years. “This is like leaping on lily-pads,” he added. “Very, very few people can do this, and Jim has taken CPI from one major leap to another.”

Jim Hopkins admits that although he and Andy have become friends, they got off to a rocky start. “I interviewed several consultants, and I chose Andy because I knew he wasn’t a ‘yes’ guy,” said Hopkins. “I wanted someone to push my limits.” Which Andy did. “There were times when I would just say, ‘No, enough!’” laughed Hopkins. “It took me awhile to trust in the process, and he got to know us better over time … [Andy] is intelligent, honest, and fun, and I appreciate it. This has been an extremely positive experience.”

Jim is pleased with the changes he sees. “We’ve gone from a silo-based benefits and payroll administrator to a sales and service organization across all lines,” he said. “We’re seeking business aggressively. We have a clear sense of finders and keepers now,” he added, “so that our sales people can concentrate on finding customers, with the keepers dedicated to serving them.”

In addition, Hopkins continues to work with Andy on restructuring the company. With plans to hire seven people over the next few months, Hopkins is honing the organizational chart and assigning areas of responsibilities and tasks to members of the management team. “They’ve made some great hires,” said Andy, “and they have a clear vision of what and who they need.” Marketing and R&D are also being adjusted, and with a new board of directors and a seven-year annual growth rate of 20%, CPI is growing on the strength of—but not solely dependent upon—customer service. “As strong as CPI was at serving clients and employee benefits,” said Andy, “they needed to be more efficient at delivering products and services. The great thing is that now they are not only proactive and efficient, but they communicate even better not just with their clients, but with the employees and families of those clients. The degree of customer service,” he said, “is simply incredible.”




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