When It's Time To Say Good-Bye
Agency owners lament about their personnel who they are pulling, pushing and dragging into the 21st Century. They claim that the limitations of their people are the primary reason that the agency is not performing to its potential, but innovation requires commitment starting from the top, not from the bottom. We have encountered hundreds of innovative agency employees whose ideas are squashed by owners whose egos require that all ideas spring from their own (mostly male) minds. Then, when the owners create, adopt, or adapt innovations, they expect the staff to simply take direction and make the changes succeed without understanding why and without buying into the changes.
Innovation does not work that way.
Innovation is much like birthing a baby. I believe that most children have greatness built in, in one form or another. If their skill and talents are identified and nurtured, they have the opportunity to develop that greatness. If, on the other hand, a child is told to do as directed, to conform and not to challenge traditional thinking, the greatness is sublimated – sometimes for decades, sometimes forever—and another drone is developed.
These children develop into adults. These adults become employees of companies like yours and mine. We can recognize that parenting and education in the United States is more conducive to creating intelligent drones than innovators, but we cannot use our cultural inadequacies as an excuse for not providing the forum and stage to permit our employees’ creative sides to emerge.
HIRE INNOVATORS – GET RID OF THE DRONES
1. HIRE INNOVATORS
This is, by far, the hardest part of the process. Agency owners are notorious for their inability to hire right – or to fire right. Yet without these skills, the rest of the innovation trail is wasted – do not bother to pursue your great ideas if all of your employees are drones.
Hiring is not dependent on the “informal” interview at which the agency owner gets a “feel” for the applicant. Hiring is a process that includes
a) Testing – ask the testing service to concentrate on the skills necessary for the job – including a strong bent toward innovation,
b) Insurance Skills Testing – take real time examples of situations that will be encountered by the applicant and ask them to work through the problem. Judge their insurance skills and their people skills by this method.
c) Culture Testing – have every applicant interviewed by at least one prospective co-worker, the supervisor, and by the agency owner with questions designed to judge values and work ethic. EEOC guidelines can still be followed in this format.
Innovators are risk takers. They can be woo’d by rewards tied to successful achievements that are under their control. Be prepared to pay high salaries and bonus incentives to get the right people. IF YOU PAY AT THE MEDIAN, YOU HIRE MEDIOCRITY. On the other hand, highly skilled, highly motivated innovators are always worth their weight in gold and bring returns in customer retention and loyalty and in cross-selling, as well as in sales
2. GET RID OF THE DRONES
“But Sally has been with the agency for 25 years! We can’t just let her go!”
That statement is absolutely correct if Sally (or Sam) changes with the changing needs of the business. Loyalty is a rare and valuable commodity. However, if the employee stopped changing as soon as s(he) learned how to answer the phone and process transactions, you do not have a 25 year veteran employee – you have a one year employee - repeated 25 times.
The agency business has changed considerably in the 30+ years that I have been in the business, and that change is accelerating. Every agency who does not change with the industry is doomed to be merged into another, more aggressive business. That is not a bad thing; it is the survival of the fittest. All you have to do is decide if you are flexible and change-oriented enough to be one of the ‘acquirers’ rather than one of the ‘acquired’. Why, then, can we accept that agencies that do not change will eventually disappear, but are not willing to consider the termination of employees who hold the agency back?
This is not a declaration of war. It is not meant to wholesale terminating employees who have been with you (unproductively) for years. It is meant to cause you to approach those employees with the ultimatum, “Shape Up or Ship Out”. In this case, “shaping up” is flexing to the changing needs of the agency, without the employee resistance that causes so many innovations to fail.
If some employees cannot flex with the changing business, live up to your standards and terminate those employees who fail to change with the agency. It is the only way you can strengthen your business for the future.
The hunt for new talent should be a daily part of your job as an agency owner. It never stops, regardless of whether or not you have open positions. New talent drives in new business, not the reverse. Once talent is identified, your decision is whether you can afford to bring the person on within your current organization, or whether this is the opportunity for you to upgrade staff in your organization.
Be absolutely direct with your employees about their status and their progress. Evaluations are extremely important tools to both develop employees and to advise and document employees whose careers are about to change.
MOTIVATE, DIRECT AND MONITOR – EXERCISE ZERO MANAGEMENT
Money is a GOOD motivator. Recognition and Appreciation are GREAT motivators!
Provide motivation tailored to the values and desires of the specific employee. Some employees desire maximum income. Others desire the security of equity. Still others desire the ego boost of management positions. ALL employees desire appreciation and recognition from the boss.
Develop your reward mechanism (your compensation program) to pay a specific percentage of your gross income to total employee compensation. Many agencies find the percentage allocated to employee compensation is low and that they cannot afford more than mediocre salaries. Almost all of these agencies are in that position because owners take too much working capital out of the business in their own compensation and benefits. If these agencies were to get leaner in those (executive compensation and benefit) areas and spend more seed money in the hiring and compensation of the most talented people they could find, the very owners who spent less on themselves would soon be earning more than they ever had in the past.
Never, Never, Never give direction and leave the employees hanging Employees will assume they know what you desire and will try to satisfy your direction. However, many managers are better entrepreneurs than they are communicators. The employees will try to follow your directives, as they understood them, not necessarily as you intended. The solution to this problem is to follow up on all direction to make sure that your employees understood what you meant to communicate. If they did, reinforce and praise them. If not, re-communicate your desires to them so they can get back on track, and follow up again!
As many businesses go bad because of micro-managing, as from lack of strong management. The key to success is defining a level of monitoring that satisfies the need to achieve the objectives, but permits the employees to independently decide how the objectives are to be met.
This soft-touch is best implemented through an MIS (Management Information System) that requires the employees to provide you with all of the information that you need to gauge the success of your objectives on a regular (weekly) basis. You are free to ask further questions if the reports are not clear, but the creation of the reports themselves, keeps the employees focused on the important roles they have assumed for the agency.
6. ZERO MANAGEMENT
The Zero Management philosophy follows the elimination of non-productive employees and their replacement with innovators. It assumes that you have provided adequate motivation, communications of your expectations and a reporting structure that provides you with the appropriate data on a regular basis.
Zero Management provides the employees with direction, responsibility and authority (monitored on a regular basis) and permits them to drive their own objectives to their goals – WITHOUT MANAGEMENT INTERFERENCE.
Of course, you and your managers are available for consultation and advice, but only upon the employee’s request. Trust is earned by competent, innovative employees. That trust is translated into the liberty to carry out their assignments with little or no interference. Agencies and other businesses that have matured into Zero Management Companies have found themselves with maximum employee leverage and with higher degrees of creativity than the owners ever believed possible. Responsibility, authority and public (and financial) rewards are the greatest ego boost to an employee. A loyal employee is one who feels appreciated. Having a boss who turns over a project, knowing that it will be done properly, is the epitome of trust and loyalty.
Innovation, in itself, is not a problem with many entrepreneurial agents. Management skills and the ability to support innovation from your existing employees (or from their replacements) is the problem that keeps many businesses from expanding, growing and succeeding as the agency industry changes into the twenty-first century.