Legacy businesses, essentially, entail creating a successful blueprint that is worth being passed to the next generation and preserved. There are a lot of businesses that are started by fathers who pass them down to sons. However, only few are as large, successful and interesting as the story of John and Heath Ritenour, and Insurance Office of America (IOA).
The company was started over 30 years ago by John Ritenour and the path to legacy business status took a number of unexpected turns. Throughout the years, IOA grew steadily. It is now considered the 25th largest insurance company in America, with over 60 locations and 1,300 team members.
Heath Ritenour is the son of John. While it might seem natural that Heath would take over his father’s company, that was far from Heath’s assumption. He didn’t have a passion for insurance at first and he definitely didn’t want to run a large company. Eventually, he did choose to become an intern to gain valuable experience and started to see the difference between the agents who were there to help their clients and the ones who were in it for the commissions. Young Heath Ritenour wanted to make a difference in the industry—as his father had been doing for over 20 years at that point.
The Start Of Something Special
“When I joined, I saw the opportunity in insurance, but I never wanted to come in and take a salary and be the second generation that sat next to the CEO,” said Heath Ritenour. “I started full commission. Back then, there was no internet drip marketing and everything was phone book and walk-ins. So, I started making 100 calls a day and getting hung up on 90+ times.”
It was hard work, but Heath Ritenour followed in his father’s footsteps with his hard work ethic. “I built my book up organically,” Heath recalled. “My book of business grew organically from 1996 until 2008.” When 2008 rolled around, the IOA President of 15 years gave John Ritenour notice that he was now an empty nester and ready to retire. John felt like the time was right for him to make the transition as well. He was very adamant that leadership should shift to the next generation “the right way”.
“My dad said, ‘You built your book here organically, you’re respected, you’re a natural leader.’ He asked if I wanted to transition to the CEO role and he thought I’d be an excellent CEO.” At the time, however, this was not the role Heath saw for himself. He didn’t feel ready to be responsible for the 500 families at IOA. He definitely didn’t want to mess up the business he had watched his parents create from the ground up.
“I flippantly said no. I felt totally inadequate. I was 31 at the time. We were a $70 million business back then with about 500 people,” said Heath. “It just felt overwhelming. So, I said no. He asked me again, a month or two later. And I said no multiple times.”
Taking The Reins
John really thought leadership was the right move for Heath Ritenour. He didn’t want to pressure his son to take the role, but he felt like Heath wasn’t giving himself enough credit. He knew the value of the business he had created, offering personal and business insurance, and how much relied on the right leadership to take the helm.
In contemplating his decision to take the reins of IOA, Heath recalled, “I’m literally saying things out loud like, ‘Come on, I’m 31. I’m inadequate. The economy is a wreck.’ Basically, listing all the reasons why I didn’t think I was good enough to do that job.”
“I guess if I’m being authentic, I probably really wanted to feel like I was getting the answer, ‘No, you are the guy. You are the one.’ But, what was spoken to my heart so clearly was, ‘If not you, who?’” That was the motivation Heath needed to take the role.
Heath Ritenour considered the other options and realized they all very likely had the wrong motives at heart. He was afraid anyone else would sell the company at the end of the day, like so many of the IOA competitors. He didn’t want the IOA culture to become centered around shareholders and quarterly earnings over the good of the partners and customers.
“I didn’t think they appreciated that over 500 families were eating based on the decisions leadership made,” stated Heath. “I watched my parents build this from nothing. My dad grew up in the projects of Pittsburgh and my mom grew up in the trailer park of Pittsburgh, very humble beginnings. I watched the sacrifices it took them to build this place, I felt like God put that on my heart of, ‘If not you, who?’”
A Celebrated Company Culture
That’s when Heath’s mindset shifted into, “I don’t want to do this, I’m scared to death of this. However, it scares me even more that if the wrong people get in charge of our culture, we’re going to look like everyone else in our industry. The truth is, in our industry, of the top 100 insurance brokers in America, 97 of them are either Wall Street firms or backed by private equity. There are only three of us left that are truly private.”
IOA has clung to that private ownership since day one as a pillar of the company. John had big dreams of creating a business that offered good deals and didn’t change terms on the partners. This is part of what set apart IOA for a legacy business.
“We’re able to run our business without overreacting to short-term disruptions in the economy,” says CEO Heath Ritenour. “We can decide as a group that we’re going to make less money and not hurt our people in the midst of a downturn. We can make decisions about investing in technology and things that might not pay off in the short term. Many of our competitors, being so short-term focused with private equity and Wall Street, can’t have a long view. That is a big advantage and that’s been the biggest blessing since transitioning into this role.”
IOA has found that happy people make happy clients, which leads to high retention. Heath and John have been fiercely protective of the culture. “I feel like my number one role in this company—outside of looking for blind spots, investing in new tech and bringing value to our customers—is to not lose our family culture. Frankly, that’s what I’m most proud of.”
Not Like The Others
This generational company was built with a father-son partnership, but it isn’t resigned to that. A legacy business goes beyond a single family line. Heath notes, “We always say we’re a generational business. That doesn’t mean whoever replaces me in 20-25 years will necessarily be one of my children. But what it does mean is the person who replaces me is going to have that same mindset that is going to believe in a generational business. They will believe in something operated very differently than the competitor, because it’s our greatest advantage.”
The transition was successful because of the unique relationship Heath has with his father. John Ritenour made it a point to be there for all of Heath’s events growing up. Even though he worked 70-hour weeks for IOA, he coached all of Heath’s sports and made it to every game. This connection was crucial when it came time for Heath to take over as CEO.
“My dad and I have such a unique relationship,” says Heath. “I don’t know many father/son teams that work so closely together and are able to completely disagree with each other on an issue, but never take it to the point of it being personal.”
“It never crossed into a disagreement. It never became personal,” remembered Heath. “I can’t remember a single time in over 20 years of working together ever having an argument with him that was personal. It would always be about an issue or about an opportunity that we were going to chase or not, but it never got to a place where we were angry at each other over the business. My dad and I have and the kind of open relationship where we can disagree, but that never affects our love for each other and respect.”