S2. Ep. 1 - A Founder's Story - Jim Roe of Arlington/Roe

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This is a podcast episode titled, S2. Ep. 1 - A Founder's Story - Jim Roe of Arlington/Roe. The summary for this episode is: <p>Oak Street Funding is happy to welcome back Jim Roe - president and CEO of Arlington/Roe, a managing general agency and wholesale insurance broker headquartered in Indianapolis. In Season 1, Jim shared advice on operating your business during disruptions. Listen as Jim opens up Season 2 with his story of building a successful business. Want to learn more? </p><p>Call 844-353-8022 to speak to an Oak Street Funding team member today.</p>
How did the firm start?
02:02 MIN
How was the transition after your father passed?
01:40 MIN
What is it like working with your sons?
02:12 MIN
What is your hiring strategy?
02:26 MIN
What is your leadership style?
00:46 MIN
What are your goals for the future?
01:21 MIN
What would you do differently?
00:38 MIN
What is the best part of owning a business?
02:47 MIN
What is your favorite book?
02:06 MIN

Bridget Haight: Hi, and welcome to OnPoint, a podcast by Oak Street Funding where we bring research and data backed insights to dig into the minds of industry leaders, to learn how to stand out, to navigate, and to break through this ever- changing industry. I'm your host Bridget Haight, and you can support this podcast by following us on Spotify, Apple Podcasts, on our website or wherever you get your podcasts. We will be there hanging out, talking to industry leaders and ready to empower you to grow your business. Now let's get on point. Today, I am happy to have Jim Roe, president and CEO of Arlington Roe, a managing general agency and wholesale insurance broker headquartered here in Indianapolis. As a business owner since 1987, Jim has successfully navigated many disruptions that challenged his company. Jim, welcome to the show.

Jim Roe: Well, thank you. You look so happy.

Bridget Haight: I am happy. I'm happy to be here.

Jim Roe: Well, I need to get happier here too, but thank you so much for having me.

Bridget Haight: It's a pleasure. I want to hear all about your business, so let's talk about Arlington Roe. The company actually began nearly a decade before you began helping your father. Can you tell us about the very start of your business?

Jim Roe: Well, actually my dad started the business off the kitchen table in 1964. His older brother, Norman Roe, my dad was number two of seven, was the number two guy at Foremost Insurance Company in Grand Rapids, Michigan. They specialized in mobile home insurance. My dad worked for a couple standard insurance companies here in Indianapolis and he asked the company presidents, or told them a couple times, that mobile home insurance was really lucrative. And I think at the time they actually called it trailer insurance, but he was trying to convince the presidents of the companies to get in the business. And they said, "What are you, nuts? Those things blow away and burn." So he thought he knew there was an opportunity as a wholesale broker. So he left his job. He had to turn his car in. He came home one day in August of 1964 and said, "Ruth, I quit my job." So five kids in a three bedroom ranch house over by Devington Shopping Center. I don't know if you know where that is.

Bridget Haight: I don't know.

Jim Roe: But in any event, we were about six blocks away from Arlington Avenue. So he called it Arlington Insurance Agency and he started a business from scratch. I think his first month he made $26.32.

Bridget Haight: Oh my gosh.

Jim Roe: That's not a lot of money to feed a family of seven, but that's how he got his start with his 1949 De Soto. That's the only car we had.

Bridget Haight: Wow.

Jim Roe: And he needed a little bit of help when he was out traveling, so I became his first assistant at age 13. It's not really what I wanted to do, but they paid me 25 cents an hour to type insurance policies on an old Underwood typewriter. I didn't think he was paying me enough, but I didn't factor in I was getting free room and board. But that's how I got my start in this business, and that's how he started our firm.

Bridget Haight: That's a great story. Well, moving on from there, and now, unfortunately your father passed away. And you became the sole owner, so can you talk us through that transition?

Jim Roe: Well, I'll actually give you a little bit more background. So I worked all the way through high school and college for my dad. We finally moved out of the house in 1968. I wanted to go on to law school. He was still trying to grow the company. He was trying to put his other kids through college as well. And so I thought he didn't have the money to send me through law school. I didn't have the money. So I thought I'll just work for my dad for a few years and save up enough money to go to law school. By the way, that was 1972. I'm still trying to save up enough money to go to law school. But I thought, "Why in the world would I want to study that hard? Why don't I just hire one?" So we have a lawyer on staff now.

Bridget Haight: Nice.

Jim Roe: But then I started working with my dad in 1972 full time. I think we had three or four employees then. So from 1964 when he started to 1980, when I came in, we grew from zero to $1.3 million in premium.

Bridget Haight: Wow.

Jim Roe: That's kind of how we grade ourselves or keep track. In 1987, unfortunately, day after Christmas in 1987, my dad was on the golf course. He really liked to play golf. And it was one of those nice warm winter days. And he was out in the golf course. As the story goes, he, on a par three, hit the ball about three from the cup, took about 10 steps and dropped. Had a massive heart attack and told a lot of people this, we didn't get a chance to say goodbye, but we didn't have to watch them lay in bed for weeks and months and really suffer. So that was a difficult time.

Bridget Haight: Yeah.

Jim Roe: And I know we'll talk a little bit more about that, but at that point in time, we were seven and a half million in premiums. So we were able to grow it from a little over a million dollars to seven and half million in 2022. And we're right at $260 million in premiums.

Bridget Haight: Wow.

Jim Roe: So we've been able to grow from $1.3 million to $260 million. So it's been nice growth.

Bridget Haight: That's great. So I have a question about the... Can you tell me a little bit about that transition, that time right after your father passed and it fell to you?

Jim Roe: Yeah, it was difficult. I was pretty much leading and running the company at that point in time. He was really doing some of our back office work. So in terms of disruption internally with losing the work that he did, it really wasn't that disruptive. It was more of a financial situation. So as I mentioned, we're 50/50 partners.

Bridget Haight: Right.

Jim Roe: We had the shareholders agreement. What that meant was the company was responsible for buying the stock of either one of us, either the shareholders in the event that we died. Well, we bought life insurance on me. We didn't buy life insurance on him because he had a little bout with prostate cancer. And so, that increased his premium table and it would've cost around $25,000 a year for the life insurance we needed. And at that point in time, we weren't that big. Plus I said, "Dad, I don't want you to die. I want you to retire." Where's the money from that come from? It comes out of the growth of the business. But you typically, you can't buy insurance after the house already burns.

Bridget Haight: Right.

Jim Roe: So that was a decision that we decided to make, but it turned out okay. That was a tough time for me personally, because I'm trying to grow the business. I'm trying to put kids through private education, trying to pay all of our people and grow new people. It was a difficult time, but it worked out.

Bridget Haight: Now, you spoke about your two eldest sons joining the business. And I was curious, what has that been like having your sons alongside you?

Jim Roe: Well actually, neither one of them wanted to be in the business.

Bridget Haight: It sounds familiar, like you.

Jim Roe: Yeah, like me. Who wants to be in the insurance business? Although we heavily recruit now from insurance schools, but back then there weren't insurance schools. You landed in the insurance business because you couldn't find another job. So Andy wanted to be in communications. Patrick graduated with a kinesiology degree. I still don't know what that is, but he hasn't done any work in that area. But I encourage both of them, "Go find another job, but then come in here and I'll teach you the insurance business." So they've been on a growth pattern in the business, just like I was. But I realized pretty quickly when I joined my dad after school, after I graduated from Indiana in 1972. When I walked in the door, one of the ladies quit. And I asked her, "Why are you quitting? She said, "I don't know who you are. And I don't know what you're going to do." And after I talked a little bit about my vision and how I want to grow the company and all that, she said, "I've changed my mind. I want to stay." And I said, "I'd love for you to stay, but you can't. You've already committed to another job and that's not fair to them if you were not to go there." So I said, "Tell you what, you go there. And if things don't work out, then give me a call." She never called me back either because it worked out in the new job or she might have been too embarrassed to call me back.

Bridget Haight: Well, it was generous either way.

Jim Roe: But that's what my boys, when they came in, I said, "You guys have got to get the respect from everybody in this organization." In fact, I told them, "There are two rules that apply to your job. Number one, you don't report to me. And number two, don't use your last name in the business. Don't be telling people your dad owns the company. You have to gain respect from everybody because of your hard work and the trust that you gain."

Bridget Haight: The company has expanded considerably, as you said, since you became the sole owner. I'm curious as to what is your hiring policy? What is your hiring philosophy?

Jim Roe: Well, I'll hire anybody that wants a job. I was coming back from lunch one day and the elevator doors open. And there's a young lady there on the elevator. And I said, "Can I help you? You look lost." And she said, "Well, I'm trying to get a job. And I'm going up to the 12th floor and then I'll work my way down." And I gave her my business card. And I said, "When you get to eight, give me a call because I'd like to talk to you." Well, she never showed up on eight either because she thought I was a weirdo or maybe she got a job between nine and 12, but that's one of the things that I've always looked at and we're always talking to people, is how can we find talent? We can teach insurance. We can't teach speed. And we can't teach hard work and intelligence. So we're always open to bring people in and then find the right seat for them on our bus, in our company.

Bridget Haight: So to piggyback on that, what is your growth strategy? What has worked to get you where you are today?

Jim Roe: Well, it's about bringing talent in when they're available. Typically when people are looking for something, then we don't have to compete on price. We don't have to pay a whole lot more money for people because they're not as happy in their current environment. And you guys have probably heard about the great resignation that's going on.

Bridget Haight: Oh, yeah.

Jim Roe: Well, trying to compete and you just increase the dollars all the time. As we all know, people long term, money is not the most important thing. The primary reason, by the way, we're in business isn't to make a profit. It's to serve others. It's to help others with their financial needs. And we're in the insurance business, so in the event somebody has a tragedy, whether it be somebody that dies, although we're not in the life insurance area, we're strictly property casualty. But if your building burns down, if you have a windstorm, if you have a financial crisis, a lawsuit, that's the reason that we're there. You buy insurance in the event that something bad happens to you. So that's the reason that we're in business primarily, is to help others in the event of a financial need. If we work hard and we're good at what we do, and we specialize in different areas, we'll be successful. We'll make a profit. That's our strategy.

Bridget Haight: Makes sense. So what do you think your leadership style is?

Jim Roe: Well, I wrote down a few words that I think might apply to me. Collaborative, consultative, people oriented, if you haven't figured that out. And that's where my son Christopher gets at, I think. Open door policy, transparent. In my office currently I have a double door. So I like to tell people that I not only have an open door policy, I have a two door open door policy. That's one of the reasons, by the way, if you walked in my office, you'd see paper all over the place. We are a paperless company except for my office. But I talk to people all day long because that's our business, it's dealing with people.

Bridget Haight: Right. So what are your aspirations for the future of Arlington Roe?

Jim Roe: We want to continue to grow.

Bridget Haight: Yeah.

Jim Roe: And there are so many of our peers in the business that are being acquired. And a lot of it has to do with a lack of a perpetuation strategy or lack of people. The key for growth is just continue, because as I continue to grow the company, whatever role I can have, I help the people that work with me, the opportunity to help them and their families be successful. And my oldest granddaughter, Julia, Andy's oldest, is going to be 16 years old in a couple months. I'd love to see her come in the business and perpetuate us into the fourth generation and other grandchildren as well. But how can we take what we've been able to be successful at and share that with everybody in our organization? Because I feel responsible, not just for the people that work there, but for their families as well. If we continue to grow the company like that, we'll continue to be successful and people will want to work for us, I think. And I'll continue to have two to three calls a week from people that want to buy us. That means that we must be worth something. Well, if we're worth something to them, that means we're worth something more to us. Let's keep it growing.

Bridget Haight: Right. So looking back, what would you do differently if you could go back to 1987 is the new owner of the company. Is there anything that you would've done differently?

Jim Roe: Well as I said, I would've bought life insurance on my dad. That was a tough time. But no, I don't think I would've done anything differently because we just continue to grow. And scale is important. When you have the right people, you have enough people, you're making money, you can afford to put more money into technology. And that's the thing I've always tried to do is reinvest the money that we make into people, into technology, into basically the ability to serve and help other people.

Bridget Haight: Great. So, what do you think has been the best part of owning your business?

Jim Roe: The best part of owning a business is doing exactly this kind of thing.

Bridget Haight: Oh, really?

Jim Roe: Because I can be influential, I hope, on other people and other people's lives. And you're looking at me right now. Your eyes are wide open. You're smiling. You're either liking what I'm saying or you think I'm goofier than anybody.

Bridget Haight: No, I can tell you're happy to be here.

Jim Roe: Yeah, I'm real happy to be here, but what kind of influence can I have another people? And I love dealing with people because that's our business. Our business is the business of trying to help people in the event they have a problem. And we need to find out what that problem is. What's the need? The biggest question we can ask our customers is, "What bad do you think can happen to you? Think about what your risks are and how you would respond to that. So you either need to eliminate those exposures, eliminate those risks, or you can offload them to somebody else, insurance." That's what insurance is all about.

Bridget Haight: Peace of mind.

Jim Roe: So peace of mind, exactly. So dealing with people is what I think is most enjoyable. And one of the questions might be, "What is the most difficult thing you have?" That's dealing with people.

Bridget Haight: Yes.

Jim Roe: Dealing with difficult people. And actually one of the biggest issues I face, this may seem a little interesting, but how do I pay me? How do I pay me and my family members? Because most of us, when we were growing up, especially when my dad started the business we didn't have a whole lot of money. I saw my mom after she was making dinner for everybody, she served everybody else. She was the last person to eat. Hopefully there was something left over for her. Not that you can look at me. I'm not starving or anything, but that's what's critical is how do I pay everybody else first? And I hope there's something left over for me. We occasionally have fire drills in our building. We're on the eighth floor of a 12 story building. And I've been told that I have to get out as quickly as possible when we do these fire drills. And I said, "I'm not leaving until everybody else is out. "So if I don't come back, it's like the general at the top of the hill when you yell, 'Charge.'"

Bridget Haight: Yeah.

Jim Roe: If the general just sits up there and watches everybody else go to battle, that's not the right leader. Leadership is I tell my number two, "Hey, I'm going down to fight. I'm going to be in the battle. If I don't show up, then you take charge."

Bridget Haight: Well, this has been enlightening. Thank you so much. I have one last question. What is your favorite book and why would you recommend it to a friend?

Jim Roe: Well, actually I'm not real big on reading books. I haven't read a novel since college. I read business books, but the way I read them is I read the table of contents. I read the first chapter and I read the last chapter. And if there's anything that's in there that I might buy the book and page through the rest of it. I've been known to read three or four books in an airport in the bookstore in between flights, because I skim through it because I'm looking for ideas. But probably my favorite business book goes back to the late eighties, early nineties talking about disruption. There's a book out there called The Contrarian Manager. And this was about a business that was failing. And they had a union in there and the president and owner of the business called everybody together. I think there were 300 or 400 people and said, "We can either shut this down and we all lose our jobs, or we can find a way to work together to make this a successful business." And everybody agreed to take pay cuts so they could stay in there in that company. And they grew the business into a very successful business. That's doing things differently, not doing it according to inaudible or according to the book, but let's find a way to all work together. And that's why I have to be open to listen. "What do you think we ought to do? You know your job better than I know it. What do you think we should do?" And then my job as the chief aggregator of all that business, and I've tried to be a real consensus builder. Because when you build consensus, when everybody agrees, then everybody claps hands and breaks and goes out and does their job. And you come back every once in a while you call a timeout. And you come back every once in a while and say, "Where are we? Are we where we thought we'd be according to the plan? Or do we need to modify it a little bit?

Bridget Haight: Well thank you, Jim. It's been so lovely having you and I can't wait to talk to you more.

Jim Roe: Well, thank you. Thank you for having me. Thanks for smiling so much.

Bridget Haight: Thank you all for listening to OnPoint, a podcast by Oak Street Funding, where we bring research and data backed insights to dig into the minds of industry leaders, to learn how to stand out, navigate, and break through this ever- changing industry. I'm Bridget Haight. And tune in next time wherever you listen to podcasts to hear Paul Rue of Whipley discuss modern leadership lessons. We'll see you then as we get on point. Don't forget to subscribe and leave us a review.


Oak Street Funding is happy to welcome back Jim Roe - president and CEO of Arlington/Roe, a managing general agency and wholesale insurance broker headquartered in Indianapolis. In Season 1, Jim shared advice on operating your business during disruptions. Listen as Jim opens up Season 2 with his story of building a successful business. Want to learn more?

Call 844-353-8022 to speak to an Oak Street Funding team member today.

Today's Host

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Bridget Haight

|Host and Moderator

Today's Guests

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Jim Roe

|President & CEO, Arlington/Roe