ACG - Agency Consulting Group

The PIPELINE

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

Yes Man Failure Factor

Case History: John took over his fathers' agency. His father built the agency from scratch from the late 1940's into a half million dollar (revenue) business by 1980. When John assumed control his "modern" marketing and sales methods, combined with an aggressive attitude, built the agency from $500,000 to $2,000,000 in ten years. Since 1990 the agency has experienced stagnation, a disappearance of profits and a decline in customer base.

As John broke first the $1,000,000 barrier then the $2,000,000 barrier, he understood that the business had grown beyond the "mom and pop shop" concept. First he hired experienced customer service representatives and producers followed by a marketing function and administrators. Finally, he hired talented and experienced professional managers to permit him to pursue executive functions and pay some attention to his customers again.

In analysis of John's situation we found that all of the experienced people that he had so diligently pursued and hired un-learned many of their decision making and management capabilities after they came into the agency. This was not their fault, it was John's.

Many insurance agents (and most second and third generation agents) have high ego drives. They are used to being decision makers and not having their decisions questioned. With each person and position that John added to his agency he obtained experienced decision makers to fill the spots. However, he expected them to work at his direction and would argue his own points until they relinquish their positions if and when they disagreed with him. He rarely permitted his employees to act independently and to make decisions that were not in concert with his-"because he's the boss, that's why!"

Before to long each experienced employee became a taciturn follower and "yes-man". They realized that agreeing with the boss was good for your longevity with the agency. Once that they were convinced that John's argumentative attitude about decisions within the agency superseded his verbal request for their opinions, they learned how to "get along".

By the mid 1990's, John had a staff of managers who were also independent decision makers in their pad positions but who quickly learned to agree with John if they expected to maintain a position in the agency over a long period of time and enjoy the benefits of raises and promotions. While John's decision making capabilities were fine for a $500,000 growing to a $1,000,000 agency, the nature of the business changed as the revenue growth and the size of the business increased from a $1,000,000 through the $2,000,000 revenue mark. John's background did not prepare him to manage a business of this size without making many mistakes-some very expensive. The employees and the managers who could've help John mature were not permitted to pursue active participation decision making and disagreements with their employer.

The results are an agency in chaos. John is dissatisfied with the quality of all of his people because he expected better of them. However, he himself was their trainer in their becoming "yes-men". The moral of this story is that each business owner must understand his own limitations and must utilize the talents and skills of his employees and managers to keep the business productive as it grows and to train him into larger company management philosophies. The quality management philosophies invert the management pyramid to make service staff responsible to customers, managers responsible to service staffs, and, eventually, the owner of the business responsible to all of the employees for the facilitation of their jobs. Those agency owners who can grow past dictatorial management and accept negative feed back from his employees will profit from the experience. Not all decisions have to be the sam as you would make. If all decisions are totally in concert with yours, be aware that you may have created a weak management and service team-not a particularly strong one.

Begin the process by simply asking the advice of your employees and managers and, unless you feel their course of action would be truly dangerous to the agency, accept their advice. A statement like, "That's not exactly what I would do but if you think that's a wise course let's try it." is a powerful one for boosting the ego of employees, increasing their self confidence and making them feel worth while. Remember, your employees should not be checking their brains at the door at 9:00 in the morning to pick them up again at 5:00 in the afternoon. If you've selected the wrong people, replace them! If the people are qualified, give them their heads and (with some management controls) let them operate the agency.