One of the basic principals of TQM is that of Continuous Improvement. Continuous improvement in manufacturing, wholesale and retail industries can be conceptualized and measured easily. When the continuous improvement concept is translated to the service process of the insurance agency system, however, we’ve noticed several stalled initiatives. These delays did not result from problems in the companies or from customer resistance. The problems seem to stem from management problems.
THE BIGGEST CHALLENGE TO SERVICE IMPROVEMENT IS NOT ON THE FRONT LINE.
The service and administrative employees are the initial and primary focus of quality initiatives. Yet they are rarely the greatest obstacle to their implementation. We have found that the problems arise from
* A deterioration of management commitment to the process,
* Management’s unwillingness to change its way of doing business to become more service oriented,
* Management’s inability to “trust” service employees to make independent decisions in support of their customers.
When service employees are empowered to provide better service, management must be willing to provide the authority and the support for the employees to use their initiative without fear of criticism. Employees will be hesitant to make independent decisions until they experience management’s support. That management support must be forthcoming even though the CSRs decisions may not have been the same as those made by the manager. If this support is both forthcoming and consistent, employees will be more willing to take risks to help customers. This is the point of empowerment. Management must create the environment conducive to the delivery of excellent service.
Agency managers spend considerable money and time selecting qualified employees and continuing their training after employment. If the managers don’t permit the employees to exercise their creativity and knowledge to perform – if the employees must clear all decisions through the manager to avoid second-guessing and criticism – the money, time and talent are wasted.
The reluctance of management to permit service employees the liberty to provide exemplary service to the clients does not necessarily stem from agency owners. Middle managers and supervisors are sometimes reluctant to yield authority and responsibilities to their employees. Until they become aware of the importance of their new roles as facilitators, they are unsure if this new system may eliminate management positions.
TREAT EMPLOYEES ACCORDING TO THEIR VALUE TO THE AGENCY:
Consistent with the empowerment and support of employees in their independent decision-making process to help customers, management must treat high performers differently than those not carrying their workload or not performing properly on behalf of their customers. Those high performers will become evident when management supports their actions on behalf of the clients. No longer will employees be able to hide behind agency procedures to avoid making creative decisions or going out of their way to help their customers. However, if the “drones” are treated similarly to (or better than) the creative problem solvers, the morale of your risk-takers will diminish.
THE MANAGEMENT ORIENTED TYPE OF ORGANIZATION VS. THE SERVICE ORIENTED TYPE OF ORGANIZATION:
When an organization responds to management as the “Bosses” service employees are rewarded for their response to management, not for their response to customers. They know that their evaluations are dependent upon how their employers view their efforts, not how the customers view their performance.
When an organization is management oriented, employees are reluctant to take (and even avoid) risks without prior approval from the “bosses”. They fear punishment or criticism if their decisions are not similar to those of the managers.
The traditional type of organizational management in insurance agencies grew from single, high ego and high performance insurance agents. As their organizations grew, new employees became assistants to the agent. Eventually, supervisors were named to departments, still assisting the agents, to act as the agent’s alter-ego within that department. The department employees became assistants to the supervisors.
THE SERVICE ORIENTED TYPE OF ORGANIZATION:
Management in a TQM organization is responsible for making it as easy as possible for service employees to satisfy the customers. The managers judge the employees performance by the results attained for the customers. Are the customers of the employee satisfied? Do they provide positive feedback regarding the performance of their service representatives?
CSRs are recognized as the most important factor in providing excellent service to the agency’s customers. They are given the accountability and the authority to impress the customer whenever possible.
COMBINING THE SERVICE ORIENTED ORGANIZATION WITH THE MANAGEMENT ORIENTED ORGANIZATION:
Implementing a Service Oriented organization does not mean that the Management Oriented organization that caused the growth and success of the independent agent was wrong or is outmoded. F. Scott Fitzgerald said, “The test of first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.”
The paradox faced by managers within insurance agencies is that Service Oriented organizations and Management Oriented organizations appear to be diametrically opposed. They are not. The benefit of Management Orientation is during the strategic and tactical planning cycle. Since the agency owners are at risk for the performance of the company, they must decide the strategic direction of the business. They must also identify the tactical (one year) events defined as the agency’s annual objectives that are required to accomplish the agency’s strategic goals. The agency owners are the visionaries of the organization. They must provide leadership and clear visions of expected outcomes from which the employees must be guided in their activities.
Once this guidance is provided, their roles change from visionaries to facilitators. At this point the organization becomes Service Oriented. Some of the dichotomies that must be faced include;
Providing autonomy – but with some guidance,
Providing working guidelines – but remaining flexible to the needs of the customers, and
Giving employees the freedom to work – but still holding them accountable for their end results.
Managers as facilitators work for the employees, doing whatever is necessary to make it easier for the service representatives to satisfy the needs of the customer. Of course that satisfaction must be accomplished while protecting the agency’s financial and ethical interests and the interests of the carriers (who are also the agency’s key clients).