USAA - Restructuring for the 1970s

Restructuring for the 1970s

Under McDermott, numerous changes were made. The company reduced its number of employees by more than 800 through attrition by the end of 1969. Those employees who remained were given much broader job descriptions in an effort to increase their interest in their work. To make sure they were able to perform new tasks, USAA inaugurated a program of extensive employee training.

In addition, USAA invested heavily in computers and telecommunications to improve service to its members. With new computers, USAA was able to make several important changes. Instead of writing a separate insurance policy for each car, for instance, the company began to write multi-car policies. With this shift, USAA was able to eliminate hundreds of employee slots and also reduce the cyclical nature of its business, spreading its workload more evenly throughout the year.

Furthermore, USAA restructured its organization, dividing members by geography rather than by type of policy issued. Under this new structure, company leaders devised a 20-year plan for growth prompted by the results of a member survey, which asked whether a more diverse line of services would be appreciated. Respondents to the survey indicated that they would be interested in several additional financial services, including mortgage loans, auto financing and leasing, mutual funds, and a bank. Car-related services, such as an auto travel club, were also deemed desirable. This data paved the way for USAA's eventual diversification into several fields outside the insurance business. However, development of these new fields would not begin for several years, since the company's board of directors balked at this radical revision of the company's scope.

In 1973, USAA bylaws were revised to allow officers in the National Guard and the military reserves to be eligible for membership, as well as military dependents. Members from these groups soon made up a large part of the company's business. A centralized training and education facility was developed during this time, and the company moved from its overcrowded offices to a new building, situated on 286 acres in northwest San Antonio. This facility became the world's largest private office building. With tennis courts, picnic tables, four cafeterias, and a company store, it was designed to enhance employee satisfaction on the job. The company also instituted a four-day work week to provide its workers with more flexible hours.

Along with the main San Antonio facility, USAA opened several smaller, satellite offices in areas around the country with large concentrations of military personnel, including Sacramento, Seattle, Colorado Springs, Tampa, and the Virginia cities of Norfolk and Reston. A second overseas office was opened in London.