1. Trustmark Enterprise Strategy
June 18, 2013

2. Enterprise Strategy Formulation Business Strategy Formulation
Strategy Perspective
Core Values
(How/Who we are)
Mission
(Why we exist)
Vision
(Where we’re going)
Enterprise Strategy Formulation
(How we’re going to get there)
Strategic Objectives
Business Strategy Formulation
(How we’re going to get there)
Strategic Objectives
Strategy Execution
(How we’re going to win)

3. Range of Corporate Strategy
About the
Relationship to Corporate
About the
Relationship Between Units
Holding
Company
(autonomous)
Buy, Fix
and Sell
(restructuring)
Capability
Sharing
(transferring)
Operating
Company
(integrated)
Least
Potential to Add/Create Value
Most
Michael Porter; HBR

4. Range of Corporate Strategy
About the
Relationship to Corporate
About the
Relationship Between Units
Holding
Company
(autonomous)
Buy, Fix
and Sell
(restructuring)
Capability
Sharing
(transferring)
Operating
Company
(integrated)
Least
Potential to Add/Create Value
Most
A holding company is a thing where you hand an accomplice
the goods while the policeman searches you.
-- Will Rogers

5. Range of Corporate Strategy
About the
Relationship to Corporate
About the
Relationship Between Units
Holding
Company
(autonomous)
Buy, Fix
and Sell
(restructuring)
Capability
Sharing
(transferring)
Operating
Company
(integrated)
Least
Potential to Add/Create Value
Most
A holding company is a thing where you hand an accomplice
the goods while the policeman searches you.
-- Will Rogers

6. Trustmark Corporate Strategy
2002 – 2011
About the
Relationship to Corporate
About the
Relationship Between Units
Holding
Company
(autonomous)
Buy, Fix
and Sell
(restructuring)
Capability
Sharing
(transferring)
Operating
Company
(integrated)
Least
Potential to Add/Create Value
Most

7. Transformation Strategy
2003 – 2004 review/discussions with Board
Capability-based diversification
Leverage shared business dimensions/capabilities
Places more importance on relationships between business units than “parent company”
Can be built internally
Capability sharing/transferring
Complimentary element
Potential to create greater value

8. Disruption/Transformation Resumes
2005 WEB-related downgrade (AM Best/Fitch)
“Heads down”/focus on earnings
Renaissance – 2006
New Growth Ventures Team
Consumer Health Advice

9. Trustmark Enterprise Strategy
2012 – 2021
About the
Relationship to Corporate
About the
Relationship Between Units
Holding
Company
(autonomous)
Buy, Fix
and Sell
(restructuring)
Capability
Sharing
(transferring)
Operating
Company
(integrated)
Least
Potential to Add/Create Value
Most

10. Trustmark Enterprise Strategy
Rationale for shift –
Trustmark businesses are more similar than different
Even though we spend a lot of time focusing on differences
Non-retirement, employee benefits “space”
Separately, BUs are relatively weak
Larger, lower cost, better known competitors
Mostly public cos. w/deeper pockets
Well-positioned; networks, distribution, related businesses
Too small to effectively leverage fixed expense overhead
We are much stronger together
Greater potential to add/create value

11. Trustmark Enterprise Strategy
Definition:
A method/approach for creating value through “ownership”, management and leveraging synergies of a related set of businesses.

12. Enterprise Synergies: Three Types
Enterprise Strategy
Business Unit #1
Business Unit #2
Business Unit #3
Business Unit #4
Cost/Effectiveness – increase efficiency and/or effectiveness by spreading associated costs and/or applying shared services & expertise across businesses
Customer Value – spread core capabilities across businesses that has a direct impact on value created for customers
Market Offering – enable collaboration to create an advantage across businesses and within strategic target markets

13. Trustmark Enterprise Strategy
Past/Current Examples –
“Big Three” Technology Projects
Cost/Effectiveness; significant efficiency & effectiveness improvements via updated technology & enhanced capability
Justified (CBA) by “siloed” BU value creation/growth focused on existing strategy
Also, enable VBS private labeling – new capability
Could have done more; i.e., IT architecture, customer data
Consumer Health Advice
Customer Value; completely new business via capability based diversification (1+1=2)
HCP (2008), HealthFitness (2010), FHS (2011)

14. Trustmark Enterprise Strategy
New Example –
Middle Market (HFC)
Customer Value; possible via Platform & operational (scale)/service improvements
New growth/value opportunity (1+1=2)
Market Offering; create greater value by leveraging “in-between” businesses (HFC, VBS & CS; 1+1=3+); unique/“package” offering, market together, etc.
May warrant faster staging/pacing than other, BU “only” opportunities

15. Trustmark Enterprise Strategy
Fundamental Questions –
What are the enterprise core values/mission/vision?
How will the enterprise’s “playing field”/boundaries (what’s in and out) be defined?
“Great strategy defines what we are & are not focused on.”
-- Unknown
In what set of businesses should the enterprise compete, when should we expand or contract and how will we deploy capital?
What is the enterprise’s risk appetite?

16. Trustmark Enterprise Strategy
Fundamental Questions (continued) –
How should the enterprise organize/operate in order to create value/make the whole greater than the sum of the parts?
What are the critical resources the enterprise should develop/share/acquire to create competitive advantage for its businesses?

17. Trustmark Enterprise Leadership
Achieving/Maintaining alignment with enterprise values, mission & vision, and between business & enterprise strategy & tactics
Consistent, balanced thinking between enterprise (the whole) and business “stand-alone” interests, including a willingness to trade-off business gains/benefits for strategic enterprise initiatives/greater value
Enterprise value creation/growth (5%)

18. Discipline – “Start/Stop/Continue”
Start (“Sexy”)
The Renaissance
Consumer Health Advice (CHA) – HealthFitness
Enterprise vision/strategy + new strategic ideas
Stop (Hard)
Sentinel
Large group medical/RMTS
Continue (Easy)
Everything else…often on “auto-pilot”; good & not so much
What will we stop?
Require serious thought/consideration, and a different mind-set

19. Trustmark Enterprise Strategy

20. Trustmark Enterprise Strategy
Not simply a “roll up” of BU strategies
Not as detailed/specific as BU strategies
Arena – defines some, not all enterprise boundaries
Staging & Pacing – Mixed bag; some significant BU items + Enterprise; i.e., new strategies, acquisition considerations, etc.

21. Trustmark Enterprise Strategy
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators
ER “sponsored”, Employee Benefits
Products & Services
Build products/services internally where core capabilities exist
Buy/Borrow new capabilities to create/enable new products/services
Distribution – Brokers, Consultants & “Limited Direct”
United States

22. Trustmark Enterprise Strategy
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators
Brokers, Consultants & “Limited Direct”
Products/Services
Build products/services internally where core capabilities exist
Buy/Borrow new capabilities to create/enable new products/services
Private labeling

23. Trustmark Enterprise Strategy
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators
Customization, flexibility, high-touch
Reliability – “do what we say”, trustworthy
Service reputation (Best-in-class, personal, responsive)
Unique set of integrated products/services
BU significant:
Payroll-deduction expertise & consolidated billing
Health mgt. ROI & on-site staff

24. Trustmark Enterprise Strategy
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators
BU economic logic
Business portfolio diversification/integration
3 strategic synergies
Cost Effectiveness
Customer value
Market offering

25. Trustmark Enterprise Strategy
2013
3 strategic technology projects
PathForward customer migrations
Platform Release 1 (Health Mgt.)
Strategy education
ELT: Execution
Others: Formulation & Execution
Validate BU customer value curves
VOC-oriented key business process improvements
Build/Formalize change leadership capability
Initiate workforce strategy planning
Assess needs/define objectives
Initiate formal change leadership
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators

26. Trustmark Enterprise Strategy
2014
Complete PathForward
Complete Platform & solving HFC service (scale) issues
Complete PAS Phase 1
Exit sm. group fully insured medical
Validate BU customer value curves
VOC-oriented key business process improvements
Begin implementation of workforce strategy plan(s)
Launch HFC middle-market product
Strategy formulation & execution – Dennis
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators

27. Trustmark Enterprise Strategy
Arenas
Staging
&
Pacing
Economic
Logic
Vehicles
Differentiators
2015
Complete PAS
Strategy formulation & execution -continued
Consider potential acquisitions; BU related or enterprise (new business)

28. Questions/Discussion

29. Break

30. Trustmark Enterprise Vision
Joe Pray

35. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

36. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

37. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

38. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

39. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

40. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

41. Enterprise Vision
Trustmark is a leader in defining and improving customer well-being. Together, as an enterprise, we win by deploying our capabilities innovatively and in concert to solve complex customer problems, pioneer new markets and optimize value creation.

42. Vision Activity Ted Harro & Mark Demel

43. Break 5:00 – 6:00 pm Dinner 6:00 – 7:30 pm The Greenery Room 8th floor Reminders for Tomorrow: Yoga 6:00 – 6:45 am in Northfield B/C Check Out extended to 1:00 pm