ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

Facilitating The Insurance Agency

For the last two hundred years insurance agencies have grown around one decision maker, the BOSS. The boss was the agent, he sold and serviced insurance for his clients. When the boss got more clients than he could handle he hired an assistant who would do what the boss required. An assistant who could think for him (or her) was valued---as long as the way they did business coincided with the boss' desires. When one assistant wasn't enough a second, then a third were added. Soon the organization developed into an Insurance Agency. However, the concept was still the same - the boss made the decisions and the employees followed them. While this worked quite well when the agency had a few hundred clients, all of whom were generated by the boss and with whom he was familiar, this process did not work nearly so well when the agency grew to thousands of customers, most of whom the boss has never met.

By necessity employees began making independent decisions because the boss could not become involved with every issue of every client.

As we are about to reach the 21st century the nature of the business of insurance agencies is changing dramatically enough that the highly directed, dictatorial style that worked for the last two hundred years will not work for the next two hundred. Agencies that survive the next 20 years will be required to grow substantially in order to maintain the viable income stream for the owners and a profit line for the corporation. Commissions have decreased over the last ten years and are expected to continue to decrease, forcing growth on those agencies who were satisfied with stability in the past. Sponsoring that growth can not be the job of "the boss". It must be the function of every employee of the agency. While the employees may not own the agency, they certainly depend on it to earn a living and maintain a career. For that reason alone, the employees of an agency may have a greater stake in its future than even the owner.

Most owners understand the need to leverage themselves through the efforts of their employees but are unwilling to accept the delegation and the change of the job of the owner that corresponds to that leverage. Owners of successful agencies in the 21st century will assume the role of facilitation of business, rather than dictatorial management.

If your job changes from telling someone what to do to empowering that individual and making the functions of their job as easy to do as possible, they will enjoy their job more and perform at substantially higher levels then in the past.

How do you facilitate rather than demand?

1). Believe in yourself. Believe in the abilities and capabilities of the agency and radiate that belief to all of your employees. - Nothing harms an employees performance as much as watching the owner's mood swings from elation over the retention or writing of a new account to the depression over the loss of business or a negative decision on the part of a company. If this translates into uncertainty over your own future in the eyes of your employees, how can you expect them to perform well and consistently to high standards?

2). Prepare - then prepare some more - then prepare even more - few successful producers walk into a sales call "cold". They know that the more prepared they are to meet the prospect and discuss his insurance situation, the better their chance of making the sale. Like practice before a football game, you and your staff must discuss and practice servicing issues, claims issues, conflict resolution and company communications and negotiations prior to the occurrence. The best sales people I know will research a prospect in every way possible before visiting the prospect. The more they know, the better impression they can make. Similarly, the more prepared you are to market a product, the more prepared you are to handle a claim and the more you know about your existing clients for servicing issues, the better they will feel about the quality of your overall service. Practice scenarios and every key critical procedural area within your agency to be certain that your employees understand the customers needs and how to attack them without your involvement.

3). Be flexible - we tell our clients that an objective within a tactical plan is only valid as long as all conditions remain similar to when the objective was created. As soon as conditions change, you must be prepared to either alter the objective or the method of obtaining it. The procedures within your insurance agency are created to mange the "standard" or "normal" situation. It makes a lot of sense to develop procedures for the 80% to 90% of the process that should be done similarly each time the situation is encountered. However, empower your employees to change the procedure when it makes sense in order to satisfy the current needs of the customer.

4). Judge your employees consistently - feed back, both positive and negative, is extremely important in the facilitation of your agency. It will take a long education period before your employees are comfortable making decisions without looking to you for approval or advise. When they perform well, tell them. This bolsters their confidence. When they perform poorly tell them that as well. However, don't criticize them - educate them. Don't tell them "you made a bad decision", instead, tell them "here's why you should have done it differently". Be absolutely certain that you congratulate and criticize both good and poor performers consistently. We all recognize that we should try to "catch someone doing something right" but we should never overlook the good performance of an otherwise mediocre employee or the poor performance of an otherwise good employee. Other employees seek that level of consistency to be sure that your are even handed in your treatment of them.

5). Be honest - adopt the philosophy that you will either do something the right way or not do it at all. Don't get creative with the facts - even a little. The trust relationship that you develop with your employees or your suppliers an be quickly changed by one act that "bends the rules". First, you will not regain that level of trust because you have already proven that there are circumstances under which you would perform dishonestly. The line of distinction between honesty and dishonesty becomes blurred when crossed. If employees see the degree to which you would flex to satisfy a need, you can expect that they will also become overly flexible. At that point you loose control over your agency because exceptions to the rules will be made that you would not approve of yourself.

If you are honest with your employees and remain consistent, if you remain flexible to change as situations require your employees to become flexible, if you prepare them for both standard and non-standard situations in all areas of your agency's operations and if you express the conviction that your business is sound - then no temporary setback will effect the organization - and that your employees should maintain the same integrity and belief system as you have about their careers, you will be well on your way to converting from a "boss" to a facilitator in the growth, profit perpetuation of your business.