How do you make it work? A Q&A with Michael Lutz

From a career as a millwright to a benefits advisor, Michael Lutz brings a unique perspective to the industry.

Michael Lutz, CEO. Compass Benefits Group

Michael Lutz is the CEO of Compass Benefits Group, where his mission is to wake up, educate and improve the health care industry, one client at a time.

How did you get started in the benefits industry?

I started my career at Ford Motor Company, where I went through an amazing apprenticeship over four years as a journeyman millwright skilled tradesman. I spent 12 years there, helping with a revitalization project for the Rouge Complex in Dearborn, Michigan, which is four square miles of industrial buildings. When it was done in 2003, all of us young people were laid off–they didn’t have enough work to sustain us. I was put in a substation on midnights for the next three years and then in 2006, they offered me a buyout. I took it, worked for another company for a few years and then started my own machine and rigging company. I specialized in taking apart, moving and fixing the presses that stamp parts for cars–hoods and doors and that kind of thing.

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I have six children, and I was traveling all the time, which was starting to wear on me. Around that time, Mark Tyler, who owned Compass Benefits Group, said, “Hey, you ought to buy my company.”

He was the next-door neighbor to my mother, who has a home on Lake Huron. I was 10 or so when he bought the place–my parents had owned ours since the 70s. Over the years, I got to see his lifestyle; he was there with his family every weekend. That time with family really appealed to me and so I began to consider it.

I got my license and kind of learned the business, took online courses, attended conferences and transitioned into the benefits industry while I was still working and winding my company down. I did my last big job in March of 2017, and April 1 was my first day in the industry.

How has this journey so far shaped who you are and your perspectives on being a broker?

I was trained to solve problems. You have to take a 200,000-pound piece of steel out of a floor, but you only have a crane that will pick up 100,000 pounds. How do you make it work? Moving the minds of CEOs and CFOs to be willing to look at innovative solutions and look at things differently is probably a heavier lift. I’m not kidding.

When we started, most of our business was fully insured. The reason I decided to go down the road toward innovation and self-funding is that I saw how much more creativity and flexibility you had in that environment and those strategies.

I’m 48 years old, so I was coming to the game later without much industry experience. I went to the ASCEND conference, and while sitting there listening to all these people, I was thinking, “This could be my competitive advantage; looking at these types of solutions.” A lot of the people I’m competing with have 30+ years of experience, so why would someone want to do business with someone who’s in his mid-40s and just entering the business? How do I sell myself? How can I bring them something that’s different?

And this made the most sense to me. Although I took over some existing clients, I was new to the industry and very focused on bringing in new and innovative clients who were interested in these strategies. I wasn’t influenced by bonuses or persistency and growth. In many ways, I was starting at ground zero, so I was able to look at what was genuinely the best for the client and then explore ways to bring them those solutions.

What kind of reactions are you seeing from employers and employees when it comes to these new ideas and strategies?

There’s a lot of pushback. The people who are most open and who I’ve worked with to implement these types of strategies are often owners who maybe started with a couple of employees and grew their business. It’s their baby and they had to be innovators to get to where they are. So many people are understaffed right now that when I can actually get them to sit down and hit pause, to think for a minute and listen, they start asking good questions.

I’m four years in and have been working with these types of strategies for about three years, so that means I’m starting to build up some good case studies that I can use to show results, which really helps.

How does the data and transparency that comes from self-funding impact these conversations?

It makes a big difference. They’re often more open to listening; they still might not jump in right away, but they’re more open to a conversation. They’re asking better questions.

I’ve even had prospects who weren’t ready to make the change thank me for the education and it’s made them a better consumer and ask better questions, even if they keep working with their current advisor.

How do you balance meeting employers and employees where they are but also gently move them to where you think they need to be?

I learned through failure. In the beginning, I would say “we can do this, we can do that, this is what you should do, and let’s just rip the Bandaid off.” I didn’t really close any business, so I had to learn through experience.

I ended up co-consulting with several other advisors, including Mick Rodgers, Bob Gearhart Jr., and David Contorno. By doing that, I got to see all the mechanics used by these different innovators, and learn to blend and combine them to bring that crawl/walk/run approach. Everyone does things a little differently; there’s no “set it and forget it” solution. You’re moving every year and there are different ways to approach it, based on different utilization. A solution that works well for one client may not even be applicable for the next one.

And that circles back to my background with machinery. One piece of equipment I use to move a heavy machine might not work the next time, even if the machines weigh the same. It might require two different pieces of equipment if I’m moving something up versus down, or around a corner, or through a plant to set it up outside.

What are some of the challenges and opportunities that are unique to the type of clients you work with in your part of the country?

The challenge is probably the talent deficiency in the market. In Michigan, we’re very heavily influenced by unions, which have traditionally provided Cadillac plans. People have come to expect those types of plans. Between 70% and 80% of the market is with BCBS, so I would say that the biggest challenge is that many people use those big names to recruit and retain talent.

Even if you make mild suggestions about change, they might be turned off immediately. I was talking to a manufacturer that did packaging equipment and as I was trying to get to the root of why he might make a change. Is there a good reason for him to do it? I found that manufacturers often have a slimmer margin, but there’s often something that can be done with those resources if you properly reallocate them. He said that in five to 10 years, if he didn’t begin to replace the production equipment that’s wearing out, he’ll be out of business.

How has COVID impacted your life and business? What changes have you made to adapt?

I’d love to tell you I had foresight and was preparing for something like this, but I had actually taken our whole business, our whole company cloud-based about two years ago – about a year before the pandemic happened. I wanted to ensure that whenever I travel, I could manage our company from afar and keep my finger on the pulse of everything going on. I put everything that I could on a cloud-based platform. When the pandemic hit, we never missed a beat. I was able to continue to prospect and reach out. That’s something I’ve always done; communicating with people comes naturally to me and I really enjoy it. Shortly after everything shut down, I was reaching out to people and getting through a lot more successfully. We actually closed our biggest client for the firm during that time frame.

How has it impacted enrollment and other meetings with clients? Have you adapted your strategies for the virtual environment?

Everything has been virtual; I have done very few in-person meetings, even to date. That’s more dictated by the clients. A lot of them are still working virtually, especially on the white-collar side.

As far as virtual strategies for enrollment and education, we were actually doing that anyway because of the blue-collar nature of many of our clients. Trucking, for example, is a big part of our client base. I’ve been connected to that industry for a long time due to my previous career, so while conducting renewal meetings, I realized that a lot of the spouses weren’t getting the benefits information at home. Here we are introducing innovative ideas and giving employees strategies that they’ve never heard about before, but the spouses often never even heard about them. The booklets and educational materials would be left in the back of the truck. So we started creating videos before the pandemic even hit for the over-the-road truck drivers to get the information into the hands of their families.

We’ve just kicked up a notch and now we’re doing it consistently. For one trucking company client, I was co-consulting with Mike Hill–one of the recent Broker of the Year finalists. We actually did a video where he played the role of the insurance nerd and I played the truck driver. I borrowed a friend’s semi and we started out next to the truck talking and introducing each other and our roles. He said, “I’m your advisor and have some changes I’d like to introduce to your plan. Let’s take this health care plan for a ride.” Then we cut and you see us in the truck and I’m driving. We set the camera on the dash and as we’re driving, he’s describing things and I’m asking questions: “So you’re telling me that if I call the nurse concierge, instead of a $2,500 deductible, I could be eligible for a $0 deductible?” We filmed the whole renewal meeting like that. And when we sent it to the HR team to distribute, they said, “Our employees are going to love this!” We got really positive feedback about it, so we’ve just kept doing things like that.

Which changes brought about the pandemic will fade away quickly? Which might stick around for the long-term?

I think some of the educational and enrollment changes around technology will stick around. If you’re going to be innovative, you have to have education and I think this is a great tool to get it to others. Plus, you can repurpose it for new hires; they’re not there for enrollment and may not understand the benefits plans when they’re hired, but when they see those videos on the enrollment platform, they have the opportunity to look back and see what everyone else saw during enrollment and access that same information.

It’s been my experience that HR is typically overworked and understaffed; talent shortages are an issue for them, as well, so it better leverages their time. If employees have questions, HR can direct them to the tools, rather than having to do it all themselves. That is a huge time-saver and value-add for our clients.

How do you stay optimistic and motivated while working within a broken, complicated system?

That’s a great question. In the beginning, everything was exciting and fresh for me, but as I’ve experienced failures and prospects and clients who don’t want to take advantage of these opportunities that we’re seeing success with, I sometimes get frustrated because I genuinely can’t understand it. As I’ve networked with peers and colleagues and grown those relationships, I’d say that support system has helped so much.

As I’ve co-consulted with other advisors and worked with people through the NexGen Mastermind program, I’ve stayed connected with people who are doing this across the country and having success, so maybe it’s 10 at-bats before you get one who understands what you’re presenting, but in between, you’ve heard from four of your peers at an event who were talking about their successes. It’s a good reminder that it is happening around you, even when it’s not always happening directly for you.

What advice would you give to someone who’s new to the industry?

Find a mentor; find someone who can help you and hold your hand and guide you. I’ve had a lot of people help me and I’m very grateful for those relationships. Even if they weren’t co-consulting and didn’t have a financial incentive, there are a lot of people out there who are genuinely here to fight against the things that are wrong with the health care industry. They really want to enact change.

How can the industry do a better job of innovating, adapting and bringing in younger and more diverse candidates?

I have one daughter who’s 24 and another who’s 21. I’ve talked to them about whether they’d want to join the industry, but it hasn’t resonated with them. That said, when I talk to other people who have firms with younger people, they say they’re often very interested in making an impact and helping other people’s lives. That’s something that’s important to them, which I think means that many of these innovative strategies we talk about will naturally rise to the top as firms are looking at doing the best thing for their clients and the employees.

Finish this sentence: The key to success in this industry going forward is…

Don’t quit.


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