I interviewed Chris Howland, founder and owner of Carillo & Howland Insurance about the eye-opening experience he’s had leaving the corporate world and making a go of it alone as a small business owner. It was an unexpected bit of enlightenment about ducking conventions and expectations alike, forming something new in the process.
Chris Howland found himself unhappy with corporate life and, at the age of 33, left his comfortable job, moving his family to a new town to start all over again, selling insurance on his own. The business started with only Chris, his wife, and his sister in law, but has since bloomed into something bigger. His story is informative and interesting, granting him a lot of wisdom to share.
I’ve taken the time to jot down some of Howland’s best bits of advice, talking about what makes them surprisingly effective. There’s always more to learn, especially when you remember to ask the right questions.
To start off, let’s look at perhaps the most universal statement made in the interview: “There is a difference between learning from your peers and following the herd.” This idea makes clear the distinction between doing what everyone’s doing for its own sake and actually taking lessons from what you see around you. Instead of doing what’s popular in your particular business avenue, try learning what led your peers to their various successes and failures. Get at the why and the how behind it all.
This leads to my next favorite moment from the chat, where Howland explained, “Ask why first. Why are we doing this? Why does this make sense? Then do the how we would do it, and what specifically we would do.” It’s a simple path laid out for any important business – or life – decision you could make. Once the why is figured out, the how and the what will follow. He reminds us, “People make an emotional connection with the why.”
It’s important to figure out your personal “why” because it will become the foundation for all that you do going forward. Why make a risk on your own when established corporations are offering jobs? The answer will vary for everyone, and it will be the key to deciding how your own business functions and what it does.
This pioneering spirit has its basis in a mantra that Howland kept in mind as he started his current chapter in life: “I’m going to abhor convention and expectation because I think those are two self-limiting models.” To some people, turning away from convention might seem like a road to failure; after all, conventions tend to form around what works. But what if the prevailing model doesn’t work for everyone? What if it produces one outcome, but doesn’t account for many other aspects of success? For anyone asking these kinds of questions, the answer is that convention isn’t a blueprint for happiness in life. It’s just a default mode of operation that can be left in the dust by those willing to think and try new ideas.
Speaking of success, Howland had a lot to say about that ephemeral idea. I asked him about it directly. “I’m very wary about saying, oh, I’m a success. Or this company is a success. I think that when you get to that point, your foot’s off the gas.” It’s another way of saying that we must always strive, always try, or we find ourselves coasting in the slow lane. It’s one thing to enjoy the perks that come with attaining goals, but it’s another thing entirely to sit back and relax once you’ve reached an arbitrary level of success. Coasting eventually leads to stopping, which is never good in the business world, or life at large for that matter.
Chris Howland: “I think when I started the business, basically I had one mantra in mind, literally, which was ‘I'm going abhor convention and expectation because I think those are two self limiting models. When I look around, most of the people that I encounter are inhibited by either of those two conventions. What I'm expected to do, what is typically done or expectation.
So when I started this business, I really modeled it around not looking at what everybody else does in the insurance agency business. But looking at it through the lens of client experience, what I would want, if I were going to be insured by this firm, and that has always been a focus of mine. So everything we do, we look at through the lens of client experience.
Now, that becomes a culture in the business, and that culture drives hiring decisions, that culture drives decisions about….you know, in business there's always, always downward pressure on margin. So we look at technology to increase efficiencies and things like that, and you want to capitalize on those but not at the expense of the culture that you've tried to create. That's where you get the balancing point between make the profit motive and the culture purpose, really.
So what I've tried to do, I think all business is founded on relationships. If you're selling Bic pens, or your selling financial services, I think at some point if you don't like somebody or don't want to do business with somebody, I don't care how good of a deal they’re offering you…you won't do it. You won't buy from them. So, really I think the rails on which the train of commerce run is still and always will be relationships, and maybe that's public branding for large corporations, or maybe it's something as simple as the local representative that you deal with of that large corporation.
But, basically, we value relationships, we look at things through the client lens and make our decisions based upon that aspect. And our people that have been hired are people that embrace that culture, it resonates within them. So, you're right, I mean I could have hired 20 sales people, and said just go out and get the business. Always quote the cheapest and get the business. Always look at your own interests first and foremost above everybody else and we would probably be ten times the size we are right now. But that's not something that I wanted to do. And again, I think there's a difference between learning from your peers and following the herd. That's a big difference to me. So I always wanted to learn from people who were successful in my industry, but I never wanted to say, well, we seem to be going that way so I'm going that way too. Be a little bit of a contrarian thinker.
Stephen Woicik: Okay, so when you were starting out, you didn't want to follow the herd but you wanted to differentiate yourself. Who were some of those people who mentored you when you were starting? Did you have a lot of people you turned to? Or were you out on your own?
Chris: I was out on my own.
I wrote a three year business plan and by the grace of God, we hit it dead on. One of the things that was different that gave me the advantage was not technological, it was telemarketing…and nobody was doing it. In 1989, nobody was doing telemarketing. So I had my wife and my sister in law calling people. And we started with personal lines, because personal lines, Home and Auto, I wanted to build a core of many small insureds because it's more stable financially than if I went after a couple of large insured that proportionally could be like 10% of my revenue and if I lost them….
Stephen: It would be a big hit.
Chris: Yeah…at the time, I guess as an example, nobody in the insurance industry was doing telemarketing. I'd call up and say “Hey, Listen. I'd like to come out to your house, you don't need to come here. I have all the rates on a laptop computer. A little printer. Come out to your house, we'll write it up together we'll talk about coverage, I'll leave you with a proposal. And people were blown away that A. They got a phone call about it and B. I'd go out to their house. Because the model was you have a brick and mortar insurance office, and people come here to make payments and get insurance or whatever.
So, that's really how I got a start and created critical mass, and when it was going so well is when I hired the next person to replicate what I was doing and then we expanded into commercial lines, after I felt we had a solid financial base. And the solid financial base, again, when I talk about the culture, Stephen, the solid financial base to me was I don't want to have to lay somebody off because I made a bad decision. That effects their livelihood…I don't want to do that. So let's make a strategic fiscal plan of how we're going to grow and stick to our core values, which limited to growth from one point of view.
Stephen: Let me go back to actually starting the company. You said it was your wife and your sister in law? Was there anyone else, or was it just you three?
Stephen: How was it starting a business with family?
I've heard horror stories and I've heard great stories. Obviously this one turned out pretty good, but how is that dynamic?
Chris: It was, I think in some ways, looking back over the years…it was great. It had its challenges. Thanksgiving wasn't always real fun. But, I think overall, my sister in law, I'll start with her. My wife and I went into it more like we were partners in the business, meaning….this has nothing to do with what we're talking about, but I was getting paid a lot of money at a job before quitting and starting this business because I was so unhappy at that job. I don't know too many partners in life that would have said: “Go ahead, quit.”
We moved to this area, I don't know anybody in this area. I had to move 25 miles away from Central Massachusetts because of the covenant not to compete with the prior firm I worked with. And we literally got out a Triple A Atlas for the State of Connecticut and I looked and said the Eastern thirds population is too dispersed to really get traction. Fairfield County I assumed was pretty much all established relationships, and North Central Connecticut in the late 80s was growing according to the economic data that I checked. And that was part of the business plan by the way.
So we sold our house in Marlboro, Connecticut and moved to Enfield, didn't know anybody here, and it's the reason we had to start telemarketing. But to get to your point, my sister in law did not have a profession at the time and she learned very quickly the business, and she got licensed, and she worked for me for…oh, I don't know. Ten years ago, she left, and that was hard because she'd been a real mainstay. And she went to work for somebody else. Like I said, that was difficult emotionally, but at the end of the day it's her life and her career. Two weeks ago she just retired from that position and I think she worked for all these years in an industry that she wouldn't have worked in if we hadn't gotten together early. And that's the great reward.
Stephen: So how old were you when you decided I'm going to leave my comfortable job and go out on my own?
Stephen: So you were in insurance before you started this.
Chris: I was. I was in an agency that was very similar to this in terms of the culture that they had, but when I was in my late 20s, I had three partners who were in their late 50s and that's a very difficult business model. Because when you want to reinvest in technology, computerization was just starting, literally, in the early 1980s was the first time computers were being used in the insurance brokerage agency business. And it was expensive, like any new technology. And I wanted to reinvest in that….and I don't blame them, they were in their late 50s and they were like “well, we kind of want to reinvest in our retirement and pull money out of the business. So talk about stupid, you know I said “well then I'm going to leave.” And I did.
And I left, and I went to a company in Hartford, and I worked for them for two years and that's the one where it just was terrible and I said well, I'll just start something up and frankly I'm young enough that if I fail, because I had two kids at the time, if I fail I'll find something else to do.
Stephen: That's impressive. That's really tough with the family and kids and everything to just uproot and go.
Chris: That's why I give credit to my wife. You know you think somebody is going to be the voice of reason and say no no no.
Stephen: This is the first formal interview I've done on recording, but I've talked to a lot of small business owners, and a lot of them like having that sounding board. That voice of reason that kind of goes along with you.
Whether they're actually a part of the company like a partner, or they're just kind of a family member or a wife or a kid. Just kind of that voice of reason “did you really think this through” and forces you to double check your decisions and kind of keep going.
Chris: Yeah, you're right. What I had was, and my wife would tell you the same thing, I'm the vision guy, I'm really good with the 30,000 foot view. I'm not so good at figuring out how to make it happen. She is very good at figuring out how to make it happen. It was a good combination. And I didn't even know she had those qualities when I asked her to marry me.
But seriously, I was the “This is where we're going to go” and she was cleaning up my wake and making it happen. She has a very organized mind.
Stephen: A good partnership.
Chris: A very good partnership. So that's how we work together by the way, because we each have our own strengths.
Stephen: So there wasn't a lot of overlap going on.
Chris: None. She bought into the vision…she knew what my role was. She knew what her role was and we executed it.
Stephen: Did she have a background in insurance as well, or did she pick it up on the fly?
Chris: On the fly.
Stephen: That's impressive.
Chris: Well, I thank you. Anyway, that's kind of how we got started, and I think basically holding true to your core values, looking at…you know, I really disdain the term ‘network', you gotta build your ‘network'.
Stephen: I don't like that term either.
Chris: I think it's terrible. I do like the word community. Because community, there's a mutual reward implied in it, and I think network…it's very one directional benefit.
Stephen: Well network to me is you help someone if they know someone you know. There's kind of this give and take involved of….
Chris: Quid pro quo.
Stephen: Exactly. A community is kind of, if anyone in my community I'm able to help them, I'll help them. Whether I have a direct relationship to them or not, because we're part of this community.
Chris: Exactly. And they'll want to help you in turn, because they know you'll want to help them. That's community. And that's a much more effective means of building a business than networking is, and I think it was the flavor of the decade or whatever, but I think we're getting to the point people realize that. And that's why I say it's about relationships.
Stephen: Right. So you had a three year business plan that you guys stuck to. When you wrote that business plan, did you have any background in accounting or finance…what did you have to learn before you started and went out on your own?
Chris: I was an economics major from Babson college. But we took courses in other disciplines like finance and accounting and things like that, so I knew just enough to muddle through. I did my data, I did my research at the time.
I checked out my competition in the area, what they were doing. Growth patterns of the population. Demographic information and you know, the operations side, I had an idea of what needed to be done. It was the market research and marketing itself that was what really took a lot of thought. And like I said, I came across telemarketing and that was the vehicle that enabled us to get going.
Stephen: If you had to start today, what would you have done differently? Obviously the technology is a little different, but would you have stuck to your same business plan?
Chris: That's a great question. I would have changed it because what I found was…I would have changed something, I'll tell you what it is. My whole strategy through telemarketing was to the exclusion of community. I talk about community because that's how I get referrals and my business has grown.
But starting out we're talking about, right?
So, I didn't become a member of the Chamber of Commerce. I didn't become a member of the Rotary, or the Lions. I didn't become a local presence in the business community so the irony is, and I've often thought this, that's a great question. The irony is, is that nobody knew me because my marketing was so specific and outgoing that I didn't rely on anything and I should have. I mean, I didn't anticipate that and I should have. Now people know me because I've been around so long, but early on it was too one dimensional. I should have also done the community building, and I didn't.
Stephen: That's interesting. So when was the tipping point of starting your business and realizing this was going to be a success? This is what I'm going to do as my job going forward. Because when you're starting, it's hectic, you're making it through day to day and your budget is really focused on getting through the month. When did you realize that this is a company, that this is basically what you're doing for the next 30 years?
Chris: That's a great question, and I interpret that one of two ways. So when will this company be a success? It's not yet. I mean, as far as I'm concerned, because I'm very wary about saying oh, I'm a success. Or this company is a success. I think that when you get to that point your foot's off the gas and that's not good.
When did I know we were going to make it? About three years, when I got to the end of the business plan. My first commission check was like $25.12. You absolutely have a reserve in the savings account and you're absolutely drawing down, and then the third year we were making more than we needed to live and paying all the bills…I had my sister in law to pay. So, you know, my wife didn't get paid. So that's when I knew, hey, we're covering cash inflow and cash outflow. That's a good thing. And we're paying the oil bill at home. That's a good thing.
But it's important to know that I've never looked at the business and thought it's a success. I'm done.
Stephen: So when you got to that point of, we can live on this and keep going, was there an accelerated growth that tipped to that point, or was it a slow steady over the three years, slowly build up clients.
Chris: No, that's a great question to. There were benchmarks and it was basically when I hired more sales people, but sales people who had the same culture that the business had. And that's tough when you're hiring sales people who need to make the sale to get the income for themselves to hold on to a culture of looking through the client lens. Because lots of times that means…I don't think that we're the insurance agent for you.
I hired Jim Oakley who was a Summers guy, and hired him from All State. He did a great job. I hired a couple other sales people that didn't do such a great job. That's on me. Hiring is a very difficult activity. And then hired a couple more throughout the year and each one gave a lift in the size of the business. Yeah, that helped. Plus you do look to leverage technology as much as you can.
Stephen: I'd like to talk a little bit about the hiring process, because that's a big pain point for a lot of business owners, because especially if you're a small business and you're hiring your first people, you don't have a lot of time to devote to a search process or an interview process. You're still running the business. Obviously you're looking to keep your culture, but what kinds of questions were you asking them? Or how did you figure out if they were going to be a good fit?
Chris: Well, can I tell you what I'm doing now? So, I'm working with a company that generates personality profiles called Profile XT to set up a competency based model of hiring by position.
Frankly I think this would be a great opportunity for someone in that industry, because what happens is I've always used personality tests, and this Profile XT can be used for any position, but particularly for sales people it's very accurate. And there's like 15 different categories…independent, mathematical reasoning, verbal reasoning, energy, manageability, independency.
So you have standard deviation that we assigned over years to number 1-10. So for manageability, you want a 5, for energy you want an 8. And you're willing to go between 8 and 10, down to 8 and 6 for a candidate. I've been using that for years, but I said to the company that does it, that assumes each of these categories…independence, manageability….is equally important. And there's not.
Stephen: There's not a weighted value.
Chris: I want a weighted value. I want a weighted value by position. So they're working on that. Developing that. So that I feel more comfortable with my own decision. I mean, I do think that when you hire, that there are three legs to the milking stool. The personal interview, you have to do that. Because, I think 70% of all communication is non verbal. Seriously. That's what social scientists have come up with.
So posture, expression, tone of your voice. Whatever. So you need to get in front of people. Background, resume is important if nothing else…and I'm not saying it's important from the point of view that the guy worked at NASA so boy, he's going to be really smart. I look at how often have you changed jobs, and that gets into the question what are you looking for out of life?
I mean, what did these jobs not give you that you're looking for? And then, personality testing. Because what you see in the interview is the tip of the iceberg. The personality testing gets you under the water.
Stephen: So the personality testing…do they do that online?
Stephen: They do it online before they come in?
Chris: Yeah. They go on a website. They go on it, register, takes about 20-25 minutes, and it is freaky how accurate it is.
Stephen: Just out of curiosity, how many employees do you have now here?
Chris: Well, the total agency because we're part of Smith Brothers is 150.
Stephen: Okay. How many have you actually hired?
Stephen: So you've refined that process quite a bit.
Chris: Yes. It's very telling. I tried to trick the test at one time. We have one of the service people up front that would take care of changing your address or billing questions.
So I gave that job description to the testing company and I took the test and I cracked up. They said “Do not hire this person for this position. They think they own the business. They're going to be telling people what to do.” So it was that accurate when I tried to trick the test.
Stephen: So that leads to another question. Do you think you're a good employee? If you weren't running the business, do you think you could work in a business again?
Chris: That's a great question.
Stephen: I've thought about it myself. I'll give you a minute to think. I've thought about myself a few times and I struggle with the idea of going back to having a manager, or something above me where I'm not in control of what I'm doing during the day, or I don't have input into what the final goal is. I enjoy that aspect of it.
You were talking about your view from 30,000 feet, I like having that view. I'd have a hard time working if I didn't have that view, or have some input to that view. Curious if you're in that same boat.
Chris: Well, so I think the answer for both of us depends on the level of autonomy of the position that you had. If it was a very autonomous position where they said “we want you to run this department.
Hey, you're responsible for the results. Good luck, go with God.” Yeah. I think I'd be a decent employee in that scenario. But if somebody's micromanaging me, I'd quit. I'd save them from firing me.
Stephen: So I guess moving away from you actually running your business, you work with a lot of small business owners through insurance. Has there been any commonalities you've seen in them or any trends you've seen from all the small business owners you have contact with on a daily basis?
Chris: You know, I think there are two kinds of business owners…I'm sure there are many more, but in generalities what I've noticed is, there are people who are really good business people. So you think whatever their industry is they would be successful, but the majority of small business owners I run into are people who are very good at their craft or their trade and not particularly good business people. So they survive because of the quality of their work, but they really shouldn't have their own business. I see a lot of people like that.
Stephen: That's one of the pitfalls of a small business. Because you are small, you're the manufacturer, you're the manager, you're the accountant. You're the tax person, you're the marketer. You kind of have to have your hand in everything, and you have to have a base knowledge of everything that is going on.
Chris: You're right.
Stephen: It's a big learning curve.
Chris: It is a big learning curve. So one of the things I do and this is a little sidebar, but when people come in and sit in that chair and say “I want insurance. I'm starting a business,” the first thing I say is “Let me see your business plan.” 90% of them say “I don't have a business plan.” And then I say “You should. Why don't you spend some time instead of sitting with me talking about insurance…why don't you go write a business plan. And then we'll talk.”
Stephen: So say I'm a small business owner, and I come in here and I have my business plan. What's some of the stuff I should know about insurance? What kind of questions do you get, or what do you think people should be educated on when they're getting insurance for their business?
Chris: I think what you should be educated on, are what are the risks to your balance sheet? What are the risks to your assets and your income stream? Because that's the most important thing. The income stream is the most important thing.
So we go through a process of not talking about coverage, we go through a process of how would it impact your business if this happened. Or that happened. Or that happened. Or that happened. And then let's say you hired employees and one of them got injured. And kind of trying to get the business owner to visualize risk and different areas of risk. Like automobile, employer liability, general liability, property insurance and so forth. And then say, ok, there's a coverage for this, and I”ll give you an idea of how much that costs and then there is no coverage for this.
So maybe you need to handle that with contracts, shedding the liability away from you or avoiding the activity all together.
That's pretty much the cycle I go through with them. And then we talk about things like perpetuation planning, what happens if you have a partner and you die, does your wife become partner to your partner? You know, that sort of thing too.
Stephen: Okay, that's interesting. That's not something I've ever given thought to.
Because when my company started it was a partnership, and then I ended up taking over the whole thing. It's still an LLC, but it's sole proprietor owned. I never considered what happens to the company when I'm not here. Stuff to think about when you don't have your company, when you're starting it..it never crosses your mind. That's something that I'm going to have to think about next.
So outside of insurance, is there any advice that you give to any of these small businesses? Or do you give advice to any of them when they're starting out? Or even when they're in the middle of running their business.
Chris: Get a good circle of advisors around you. Just as an aside, I met yesterday with an insured who is in the category of a good business person and could make money no matter what business he was in. Multi million dollar business. I was sitting with him, asking him questions and it reminded me as I said before, he doesn't have a good circle of advisors. He's making great business decisions, don't get me wrong. And the business is growing and growing.
But things like tax preparation, estate planning, perpetuation, business succession, I mean he's completely vacant on those areas…and that's really important stuff. So, yeah, circle yourself with really good advisors. Be humble. Draw as much as you can from people. Most people want to help you. Most people want to talk to you and share their knowledge. And take it.
Chris: And always ask for business. Always ask for business.
Stephen: A constant salesman.
Stephen: Kind of getting a little off topic, are there any books you'd recommend to business owners? Or just in general.
Chris: About 50 of them. I'm a big reader. I read business books all the time.
Stephen: What's the last book you read?
Chris: “Start with Why” by Simon Sinek. It's a fantastic book.
Stephen: What's one that you would gift the most to someone starting a business?
Chris: Probably that one now. Fascinating book. Because what it talks about is, you need to know the why you're doing what you're doing. Not the what or the how…and most business owners, it's the what or the how. But if you know the why, then you will drive the business the right way. And that carries through to life.
Why are my customers my customers. In this society, and I won't go off too much, but you can tell I get passionate about it, he drew three circles that were interconnected. He said in our society, we always ask “What” first and then we ask how, and then we ask why. He said really, we should invert that. Ask why first. Why are we doing this. Why does this make sense. Then do the how we would do it, and what specifically we would do. And my point is when you go through that process, people buy into the why. People make an emotional connection with the why. Yeah, I do that too. I get it. As opposed to saying “here's what I'm going to do.”
So think of all the advertising, Stephen, that you've ever seen through your life. This is our product, this is what it does, this is how it does it maybe, it costs this much. They never touch on the why. How's it going to benefit your life? Where's the emotional connection? They never even get there. But if they said….Apple was a great example.
Here's what Apple said, and Simon Sinek said it in his book. Apple looked at it compared to Microsoft and said “Imagine if you could have 10,000 CDs in your back pocket at any time. Is that something that you would like? And they're really talking about the why. Jobs was talking about the why. And then it got down into the how and the what. Microsoft was “we want a desktop on every desk in America.” But why?
Stephen: I like that.
Chris: Fascinating book. I have extra copies at the other office. Start With Why. By the way he does a Ted Talk which summarizes it. Actually I think it's like the third highest watched Ted Talk.
Stephen: I'll have to check that out. So I don't want to take up too much of your time, I know we're running a little long. I wanted to ask a few shorter questions. You talked earlier about you don't consider yourself a success yet because it makes you slow down and sit back. What do you consider a success? Or is there anyone you look at now and say they're a success?
Chris: Wow. I look at people and say they're successful, but there's a difference to me about being a success and being successful. You can make a lot of money and be a very unhappy and unfulfilled person. So I can't think of anyone in the world that I would say is a success…but I want to be the first one.
Stephen: Good goal.
Chris: So there's personal development and business development is what I'm talking about. Getting there. Working on it.
Stephen: What's your biggest waste of time during the day? During the work day?
Stephen: How many emails do you get a day? Do you know?
Chris: 125. You know Stephen with these quadrants, you have to focus on the important not urgent? To me email is not important, and sometimes urgent. But yeah, emails.
Stephen: What are three websites you check every day?
Chris: Google. Amazon. That's it.
Stephen: Is there a routine to when you start the day? Like when you come into the office you have to do these couple of things, when you wake up in the morning to kind of get the day going or is it just kind of every day is a little different.
Chris: I would love to say every day is a little different. I try to make every day a little different. Usually the first thing I do when I get into work is check my emails. So that's a consistent thing. Like I say, I shouldn't. But that's because it's a new day, and you want to know what came in overnight
Things referenced in the interview: