Restoration Rewind

Delta Development Group Monthly Newsletter

January 2016

Letter from the President:

As 2015 has come to a close, we would like to take a moment to thank you for being a part of our success this year. It’s been another successful year and without you,

there is no us.

We hope that we've been helpful in your successes and look forward to continuing to build partnerships that are mutually

beneficial.

Michael Mastous and the Delta Development Group Team

New in 2016 Delta Development Group promotes Ragan Neblett to

Manager of Training and Development.

Congratulations and well deserved Ragan!

Delta Development Group would like to officially welcome

Jason Kaber, our new Vice President of Franchise Development.

Jason comes to us from California and brings a great amount of knowledge and experience. He will be getting to know all of you

very closely in the near future.

Are You Ready For Some…

ANNUAL CONVENTION Planning is in full swing for the annual convention in March and with every step closer we are getting more and more excited about this year’s event. We have already announced our keynote speakers, Mickey Lee and Dick Wagner combined with the commitment from Aaron Foreman and NDT/AMC Elite, is going to make this an event that you don’t want to miss.

We have also added another whole day to the event. Thursday, March 17th has been added to the program as a “Technology Day”. We want to take time to share with all of you the technology changes and advances that we have made over the last year and how they can help your operations. There will also be DMS training and a general technology questions and answers.

This addition takes the conference to three and a half days, running from Thursday, March 17th through lunch on Sunday, March 20th. All owners will receive detailed agendas this week so that all travel plans can be finalized. Please remember we have a discounted group rate available with the host hotel, The Golden Hotel. Those reservations must be made directly with the hotel. You can find all of the information you need at www.thegoldenhotel.com or please contact Ragan and she can get you everything that you need.

Of course we will also be joined by our wonderful vendor partners, we will have some cool new uniform and swag items to show you, new people to meet and more. We try to top ourselves every year and this year will be right in line as the best convention we have had! All owners are required to attend but we can promise that every single employee that you can spare and have at the event will learn a lot and benefit immensely.

Reach out to Ragan if you have any questions or need any assistance with your planning. We are looking forward to seeing everyone in March.

The dark side of claims “best practices”

Don't look now, but best practices are the rage. Every insurance company, third-party

claims administrator and independent adjusting company seems to embrace best practices to differentiate themselves from competitors. Marketing factors spur the trend too, as companies tout their own best practices to separate themselves from other firms. “Those other guys have their claim practices? Well, we have…best practices!”

One downside: clients will hold you to those best practices. Failure to meet best practices may trigger liability claims for negligent claim-handling, breach of implied contract, and even bad faith. When you set the bar high and fail to clear it, consequences flow and some may be bad-faith suits.

After a claim meltdown, rest assured that picking through the wreckage will be an enterprising attorney seeking blameworthy targets. Who better to serve that role, than the (perceived) cash-laden insurer? After all, its management boasted of those best practices and look what happened!

Setting the bar high…and colliding with it For example, a company may recognize that an initial claimant contact normally occurs in the first 72 hours after a first notice of loss (FNOL). Nevertheless, that company may raise the bar and tout as a best practice first contact within 24 hours. Industry standards may call for contact of policyholders within 72 hours of a FNOL, but the company establishes more rigorous requirements.

Insurer custom and practice may be for adjusters to complete an investigation in 21 days for certain claims, but a company compresses the timeline at 14. The more rigorous standards one sets, the more exacting courts and insureds may be regarding actions

on a claim. The takeaway: do NOT establish standards which the company is not absolutely certain can be met. Courts in some states view violations of a company's own internal guidelines as potential evidence of bad faith. So accept the notion that no good deed goes unpunished.

By trying to exceed industry standards and adopt best practices, the company may be held to a higher standard than would otherwise be the case, painting a bull's-eye on its back. Remember those promotional and training materials touting its best practices? Expect to see them enlarged and shown to juries as trial exhibits. Then, bad faith counsel will methodically walk through how the adjusters handled the claim in question, contrasting lofty aspirations with the grim reality of what they actually did on the claim file.

Still sure it's worth trading on the company's “best practices”? Nancy Germond, an Arizona-based trainer and claim consultant observes, “In claims, we’re busy putting out fires, and a best practices manual can be a back-burner item that flares up and burns the claim department.”

John Keskula, subrogation manager at Chesapeake Employers Insurance Company adds, “By publishing best practices, you invite scrutiny as well as Monday morning quarterbacking.”

Envision plaintiff counsel's summation: “Ladies and gentlemen, we’ve seen the documents produced by Hard-Hearted Insurance Company, what they call their ‘Best Practices.’ They use these to get more business and charge more money. These are their promises to consumers like you. In contrast, we’ve also seen how Hard Hearted actually handled this claim. A far cry from their vaunted ‘best practices’! True?”

Law of Unintended Consequences

This does not mean that pursuing best practices is a bad idea. Shouldn't a person's — and a company's — reach exceed its grasp? Don't be afraid to set the bar high. “Having a [best practices] manual setting the bar high,” according to UK-based consultant Clive Munnings, “demonstrates that an insurer seeks to provide the best possible service.” In claims, as in life, nothing is wrong with reaching for the stars.

However, that effort could come back to bite one. What some view as a way to elevate claim practices could become a bad faith liability. Shouldn't adjusters and claim operations strive not just for competence, but mastery? Definitely. However, claim departments should consider potential negative, unintended consequences of codifying best practices.

Two case studies As an expert witness reviewing cases involving alleged bad faith by adjusters or insurers, often an insurer's “best practices” are discovery targets and a point of contrast between how claims are supposed to be handled and how they were actually handled by the adjuster. If adjusters follow company best practices, no problem arises. However, troubles multiply when lofty pronouncements from management must be implemented by the folks actually doing the work.

Recently, a trucking firm sued its third-party claims administrator, alleging mismanagement of a Workers’ Compensation program over many years. Discovery

revealed that the TPA had published best practices. A Workers’ Compensation file audit, however, showed deviations from not only best practices, but from claim-handling norms.

In another case, a plaintiff sued an insurer over attendant care benefits allegedly underpaid for years through automobile PIP coverage. Through discovery, the plaintiff saw that the insurer had some written best practices. One section covered “cost management.” The plaintiff used those to build an institutional bad faith claim, alleging that cost management guidelines aimed to boost company profits at the policyholder's

expense.

Jamaican sprinter Usain Bolt holds the world record in the 100-meter dash at 9.58 seconds. He is officially the world's fastest man. Sprinters finishing one or two places behind him — like Justin Gatlin and Asafa Powell — get silver and bronze medals, respectively. That doesn't make them unreasonably slow. They are still blindingly fast.

Straying from “best practices” in claims doesn't mean that an adjuster engages in unacceptable behavior. The orbit of reasonable practices lies outside best practice. There is a range or continuum of claim-handling activities that may fall short of a company's “best practices” but are nevertheless reasonable.

A saying attributed to Voltaire, “The best is the enemy of the good,” applies here. Falling short of best practices may not equate to bad faith. One can miss best practices, but still be within the realm of reasonable claim standards. As a top-shelf claim organization, a company should always be striving. That's why establishing written best practices is a worthy discipline, despite the risks.

7 Tips for Implementing Best Practices

1. Choose words carefully. Include a disclaimer. Have counsel draft it. Point out that these are aspirational goals, not warranties or guarantees.

2. Don't do it for show. Don't make best practices another “credenza decoration.” Don't embark on best practices as the management initiative du jour. Aim to change behavior, not to have an impressive-looking document.

3. Train and train again! Provide periodic training and education on best practices. Schedule in-house sessions to refresh everyone's understanding them. Develop case studies to show examples of best and not-so-good claims practices.

4. Audit for adherence. “That which gets measured gets done.” Quality assurance means checking under the (file's) hood to make sure that adjusters follow best practices.

5. Link it to performance reviews. Align performance review criteria with best practices. Then, link performance reviews to merit pay. This reinforces the tie between striving to be the best and the money in paychecks.

6. Reassess best practices” periodically for relevance and currency. Like furniture, best practices benefit from periodic dusting. As a company evolves, its notion of what does (and doesn't) constitute best practices may change as well. Periodically review the document for relevance.

7. Make it realistic, authored by people who “do the work.” Marc Dubois, a Florida-based claims consultant, notes that some best practices guides “are written by theoretical practitioners rather than by folks who have hands-on experience.

Welcome the Newbie

We would like to introduce and welcome Jason Kaber, new V.P. of Business Development. Jason comes from an extensive sales and marketing background, most recently with an online driving school. Jason is also incredibly familiar with the construction industry having opened and run his own home improvement business for many years. Jason, his wife and two kids journeyed from the Bay Area of California to join us at Delta Disaster Services.

He will be working both with the Denver office, mentoring the business development rep and driving in business and with Delta Development Group, mentoring and developing your marketing reps and bringing new franchises into the system. Jason will be getting out to all of the offices before too long, but with 2016 in full swing, do not hesitate to contact him with questions, problems, and to help drive your 2016 marketing plan to success.

Why Successful People Never Bring Smartphones into Meetings by Kevin Kruse

You are annoying your boss and colleagues any time you take your phone out during meetings, says new research from USC’s Marshall School of Business, and if you work with women and people over forty they’re even more perturbed by it than everyone else.

The researchers conducted a nationwide survey of 554 full-time working professionals earning above $30K and working in companies with at least 50 employees. They asked a variety of questions about smartphone use during meetings and found:

• 86% think it’s inappropriate to answer phone calls during meetings • 84% think it’s inappropriate to write texts or emails during meetings • 66% think it’s inappropriate to write texts or emails even during lunches offsite • The more money people make the less they approve of smartphone use.

The study also found that Millennials are three times more likely than those over 40 to think that smartphone use during meetings is okay, which is ironic considering Millennials are highly dependent upon the opinions of their older colleagues for career advancement.

TalentSmart has tested the emotional intelligence of more than a million people worldwide and found that Millennials have the lowest self-awareness in the workplace, making them unlikely to see that their smartphone use in meetings is harming their careers.

Why do so many people-especially successful people-find smartphone use in meetings to be inappropriate? When you take out your phone it shows a:

• Lack of respect. You consider the information on your phone to be more important than the conversation at hand, and you view people outside of the meeting to be more important than those sitting right in front of you.

• Lack of attention. You are unable to stay focused on one thing at a time. • Lack of listening. You aren’t practicing active listening, so no one around you feels

heard. • Lack of power. You are like a modern-day Pavlovian dog who responds to the whims

of others through the buzz of your phone. • Lack of self-awareness: You don’t understand how ridiculous your behavior looks to

other people. • Lack of social awareness: You don’t understand how your behavior affects those

around you.

I can’t say I’m surprised by the USC study’s findings. My company coaches leaders using 360° assessments that compare their self-perception to how everyone else sees them. Smartphone use in meetings is one of the most common coworker complaints.

It’s important to be clear with what you expect of others. If sharing this article with your team doesn’t end smartphone use in meetings, take a page out of the Old West and put a basket by the conference room door with an image of a smart phone and the message, “Leave your guns at the door.”

A Brand for Now and the Future

For most of you, one of the main reasons you bought a Delta Disaster Services franchise was because of the brand. Whether it was our protected trademarks, logos, colors; all of that comes together to make a brand that we can all be proud to represent. As your franchisor, one of our biggest responsibilities is to protect our brand. One of the biggest ways that we do that is by keeping a very close eye on how our brand is displayed in the public.

We feel that all of you are great ambassadors of the brand, however we have seen a slip in adhering to the brand standards recently. Moving forward in 2016, all pieces of marketing material, in any form MUST be reviewed by Alan Campbell. Alan is the graphic designer that created all of our logos and most of the materials that we all use today. Alan has a great knowledge

of trademarks and meeting branding standards. While his comments, changes, and

requirements may seem tedious sometimes, his best interest is also the Delta Disaster Services brand.

We also recommend that you use Alan for your material creation, his graphic design is truly top notch and if he creates a piece for you, there won’t need to be an additional approval step. Any work done by Alan will be billed to your franchise location directly at the agreed upon rate of $65.00 per hour. This is a VERY great rate for the quality of work that we receive from Alan. He has also agreed to be available to all of us for rush projects. Anything like that will be dictated by his schedule and there will be an additional rush fee.

We need to continue in building our tradition of being a strong brand and representing ourselves as a top notch organization in any market and in any setting. By all of us using Alan for his expertise, we can all feel comfortable that we are putting our best Delta Disaster Services foot forward.

Delta Disaster Services at the IBS Tradeshow

Delta Disaster Services, will again have a booth at the IBS Tradeshow in Las Vegas. The tradeshow, running the week of January 18th in Las Vegas, is the biggest builder related tradeshow in North America.

Delta Disaster Services, will be represented this year by President, Michael Mastous, V.P. of Business Development, Jason Kaber and General Manager of Delta Disaster Services of Northern Colorado, Caroline Hornback. The group will be showing off the Delta

Disaster Services opportunity to all that are walking the tradeshow floor. If you are going to be at the show or know someone who is attending make sure to stop by our booth #C9508, to spin our Delta prize wheel for a chance to win a $250 gift card.

Things to measure!

Just as you would never consider cutting an expensive piece of wood without proper measurements, you also need to constantly “measure” all aspects of your business. Especially at the New Year, it becomes very easy to get caught up in all of the day-to-day activities and forget that we also need to track what is happening on a daily basis. Some of the most relevant measurements in any business:

o Production! What were your sales for the month?

Did you meet your goal? How far off (over/under) is it?

Both dollar volume and number of referrals?

Where did the referrals come from? Total number of new jobs? Which referrals did you not close

and why? Was there something that you could have been done differently to

capture the sale? o What was your average job? (Dollar volume). Always try to meet or exceed the

national averages. National average for mitigation is $2,500 and Construction $5,000.

Profit Margins! This one is obvious, but as you get busy it also easy to forget. Gross profit margin on mitigation should be meeting or exceeding 70% and on construction 40%. If you are not meeting these margins, we need to identify why.

Estimating errors? Are you leaving money on the table? Labor costs? Are your technicians spending too much time at the jobs? Was your subcontractor inefficient or the wrong person for the job? Do they

need to be replaced? QuickBooks data entry errors? Was something charged to the wrong job? Did you do a “favor” for a friend or an adjuster that reduced the margin? At

least you will know why you didn’t meet your objectives. o Marketing:

Number of Referrals? Where did the referrals come from? Marketing Activities. X number of outside calls resulted in X number of

referrals which resulted in X number of new jobs. Is your referral base growing? If not, why not? If yes, great! Keep it up!

o DSO. Days Sales Outstanding. This is important for measurement of your “Cash Health”. Turning the money and collecting the money is critical to maintaining a healthy cash flow.

o Customer Satisfaction Surveys. Customer satisfaction is an indication that your company understands the needs of your customers. Understanding your customers and being able to satisfy their needs is crucial to the strength of your business. Having strong customer service polices will add to the success of your company. Be sure to share these with your referral sources and adjusters!

o Employee satisfaction. This is another key indicator of business success. Developing a work environment that rewards employees for their hard work is imperative in attracting and retaining quality employees. If workers know they are appreciated, they are much more likely to go the extra mile when needed. Employees are an indispensable part of your business. They are the face that greets your customers.

If you need assistance or ideas on how to track these items please contact us. We can give you tools and help generate ideas to get all the information that you need to your fingertips.

And we will leave you with this…