Rancho Cordova-based eyecare company VSP is setting its sights on the world. The nonprofit, which started as a California vision insurance plan, is in a “renewal” phase according to CEO Rob Lynch.
Lynch, a former analyst at Great West Life Insurance, told attendees at the Sacramento Area Human Resource Association Workplace Excellence Leader Awards on April 29 that he rose up through the HR ranks. He took the lead role at VSP in 2006.
Lynch explained that economies, companies and people move from renewal to growth in ever-compressed cycles unless they get sidetracked in a stabilization vortex. VSP’s secret to maintaining positive growth has been keeping customers at the center of what they do. Therefore, when a number of the companies representing VSP’s 55 million members started to ask for coverage outside the U.S., Lynch listened. At the same time, his suppliers were consolidating with overseas sources and he was losing control of the materials for product lines. “That was when we got real about a global strategy,” Lynch said.
Starting with Canada, VSP adopted a global moniker and started putting in place joint ventures and targeting acquisitions that would diversify the revenue stream and geography of the company.
So, a company that in 2007 realized 95 percent of its revenue from the insurance business and all of it in the U.S., is now targeting 64 percent of its income will come from insurance with 25 percent from frame sales, 5 percent from lab work and 5 percent from software sales to optometrists. When fully implemented, 60 percent of that total business will be in the United States. That doesn’t mean that we will do less business in the U.S., Lynch stressed. In fact, he still sees domestic growth opportunities. Only, that business will be augmented by international sales.
Of course, these ambitious plans were scratched out in the boom before “the world fell apart,” as Lynch described the recession of 2008 and 2009. “But we were fully committed so we kept going.” VSP has since acquired eight companies, including factories in Italy and China.
A big contributor to the success of that strategy was a renewed focus on human resources. The company added 2,500 people internationally – 1,100 as outside hires. VSP, which has consistently been named as one of the best workplaces in the annual Fortune Magazine list, had primarily relied on promoting from within for top positions. By institutionalizing hiring and development practices, the company was able to bring in key hires that allowed for a smoother growth curve. As each company was acquired, Human Resources, Finance and Legal activities were centralized. Evaluation and compensation was made objective so people who were contributing the most could be rewarded accordingly.
Lynch saw the past three years as a necessary stage to position the company and it’s employers for real growth. “True leadership development takes place under conditions of real stress,” he concluded.
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