Agency One:
Many years ago we were having a conversation with the owner of a large third-generation agency who had his children in the business with him during a strategic planning cycle. Each of the children had been working in the agency a while and were still trying to find their best role for the future. When I broached the subject of formalizing management training for the kids toward taking over for the father at some point in the future he confided the following to me: “Al, you know I love each of the kids and would do anything for them. But I can’t turn over the agency to them. They’re idiots! They are presumptuous, fly off the handle, make tons of mistakes and sometimes harm the business more than they help in their relationships with both clients and carriers.”
This set me back. The owner was confiding in me that he intended to ‘take care of’ the kids in their career but would prefer to raise an outsider to general management.
Fortunately, I had known the agency owner for 30 years when his children were quite young and he was approximately their current age. And the owner’s father (who was even more blunt than the current owner) made no bones about his doubt of the capabilities of his son (the current owner), all but calling him an “idiot”.
Yet, as the owner got older and more settled, he assumed a more even temperament and took it upon himself to learn and take over his father’s roles until, at retirement, the current owner became the controlling force in the agency. Of course his father continued to question his abilities and capabilities until the day he died.
Memory is a convenient part of our psyche. It is sometimes ‘colored’ to embellish our victories and overlook our failures. I pointed this out to the current owner and reminded him of some of his ‘bonehead’ moves over the past 30 years, pointing out that each misstep seasoned and strengthened him to the capable elder statesman position he now occupied.
I pointed out that each of his children’s personalities carried a part of his own and they were no different than he was at the same age.
Now, decades later, the owner retired and is deceased and the children are each in very responsible senior positions in the agency. Each is now wondering if his children can be trusted to even work in the agency, let alone to become their respective successors.
I’m still around and about to remind them of the same thing I told their father about his “idiot children”.
Agency Two:
The two owners of the agency were relatives and never got along. But their parents left them the agency so they had to work together – begrudgingly.
Each owner had children who also came into the agency. But the children were more alike than different and saw the lack of the relationship of their parents as a weakness of the agency that they had to remedy. So the children worked together to increase their own competence and to learn the agency business since their parents were too involved in their own lives to educate the kids.
When the time came that health and mental attitude required the owners to retire the professionalism of the children far outstripped that of the parents. The parents saw this as personal victories since their children were able to easily assume management responsibilities and were patiently awaiting controlling positions.
There was no “idiot kid” syndrome in this agency because of the proactive position of the children. Each built a respectable book of business while taking over the respective management responsibilities of their parents. When the time came to take ownership and control, there was no hesitation and no consideration that the children may not be able to manage the agency.
Agency Three:
The two brothers who inherited the agency from their father hated each other. Each took half the father’s book of business and had a service team assigned to them who would administer the customers the way each brother desired. The agency was more a cluster for placement of business than a consolidated business entity.
Each brother brought their children into the business to work with their respective father. One child wrote some business but was not particularly good with staff. The other was good with staff but not particularly trained into technical insurance so was primarily a personal lines service representative.
More importantly, the fathers transferred their attitudes about each other to their children so they never had the opportunity to combine to strengthen each other and the agency.
When the time came for the owners to retire each jockeyed for position to assure that their ownership transferred to their respective children because they feared that each family would lose control of the business to the other and the result would be the elimination of one part of the family from management and, potentially, from ownership.
What’s the difference between each of the three agencies?
The difference was purely attitude.
It is likely that none of the younger generation were “idiots.” However, the attitudes of the senior owners – toward each other, toward the children and toward their business caused three very different solutions, two of which worked out quite well with the third still in perpetual limbo.
Yes, there are children who should never become owners. There is no royal or familial lineage in the insurance agency industry in the U.S. although we still have a predominance of family owned businesses in our industry. But our industry has proven that a moderately intelligent person can and does succeed in our business. Success depends primarily on how we prepare our successors, on our attitude toward them and on their attitude toward the business.
If your successors are bred into your business with a silver spoon in their mouths, never having to struggle to earn a living and being handed increasing compensation commensurate with their need instead of commensurate with their ability and reflective of their success, it is likely that they will be maintenance managers in their career while their parents were growth managers (simply out of desperation and financial need to generate more income). And, if they are given the chance to retire early on a big price-tag, they may do so while their parents would never have considered selling the cow that provided the family milk, young calves and other sustaining products in perpetuity.
However, the idiot kid syndrome is much more frequently erroneous reflecting the bad attitude of the parents more than the real weaknesses of the children. Challenge your children. Don’t promise them ownership but tell them that they have the opportunity to earn it. And help them develop before you retire or die. Most of your children are at least as smart as their parents and are much more developed than we were at the same age.