Maybe Aflac should tone down the duck’s quack since it seems soft as feathers when it comes to layoffs.
Few companies in this day and age can say they haven’t had job cuts during this economic mess. Even fewer can say they’ve never laid off employees.
But since its founding 55 years ago in Columbus, Aflac has managed to avoid chopping heads in the U.S. and Japan, where it sells supplemental health insurance.
“I think job security enhances the productivity of your employees,” CEO Dan Amos told me during a recent interview. “You can’t have your heart and soul in it if you’re worried about your job.”
That attitude is a prime reason Aflac has consistently made lists of top places to work. It also scores high on diversity.
After talking to many CEOs for this column, I can say that Amos is in a small minority on the layoff issue. Companies have been cutting costs — and employees have been the main victims.
What’s more, many CEOs believe it’s important to reward employees with pay increases — even if that means laying off more workers than would be necessary if pay was frozen.
But Amos, who’s been CEO for 21 years, is not in that camp. He chooses to freeze merit increases to avoid layoffs. Aflac has a merit freeze in place right now.
To be fair to companies in many other industries, Aflac does not have to contend with the boom-and-bust cycles faced by construction, auto, airline and other businesses. Aflac’s rate of policy renewals is fairly predictable at 88 percent, Amos said. That allows for effective planning to avoid seesaw hiring and firing.
There’s one other strategic issue on which Amos, 58, may be in the minority — international expansion.
In the early-to-mid 1990s, Amos sold or closed operations in a half-dozen countries where Aflac was floundering to focus on the U.S. and Japan.
Today, about three-fourths of the company’s $18 billion in revenue comes from Japan, where Aflac has a 25 percent penetration rate among households. In the U.S., where the company calculates penetration differently, it’s 6 percent among businesses.
So Amos, at least for the foreseeable future, is planning to keep pushing in those markets, where he sees plenty of room for growth.
By the way, the duck — and how Amos chose to use it — has been key to both revenue and earnings growth over the years.
When the ad campaign started a decade ago, Aflac’s name was known by only about 10 percent of U.S. consumers. Amos had to make a key decision: Use the duck for one sole purpose — brand recognition — or use it to accomplish two goals — brand recognition and developing an understanding of the company’s complex supplemental insurance.
Amos chose to go with a singular focus of getting its name out there. Today it’s known by 94 percent of Americans. When that number hit 90 percent about five years ago, the ads started to layer in more definition of the insurance product.
My takeaway from Amos is focus, focus, focus. Focus on employees. Focus on promising markets. And, of course, focus on your brand.
The motto on Amos’ desk: “The duck stops here.”
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