ACG - Agency Consulting Group

Strategic & Tactical Planning

We believe that everything that an agent does to strengthen his/her business begins with a cogent Strategic and Tactical Plan. Most strategic plans are developed in a three day process that begins with the owners evolving a Mission and Vision Statement (what the agency would like to be in five years). Strategies are developed to change the agency's habits and activities to those necessary to become the agency represented in its Mission and Vision Statement. Long term goals are created for every strategy defining the year-by-year actions and results necessary for the Plan to succeed. The lowest level of the Long Term Goals become the Agency's Tactical (annual) Plan for the next year. Every objective in the Tactical Plan is assigned an owner and has Quarterly Action Plans developed to demonstrate HOW the objective is to be accomplished. Monthly Benchmarks test the objective frequently with objective, realistic and achievable measurements of success during the year.

Included in the Strategic and Tactical Plan are organizational and personnel development, producer acquisition and development, marketing and sales plans, automation, retention programs, budgets and Management Information Systems. Also included are any other long term goals that an agency may have in the areas of acquisition, sale, and perpetuation.

Strategic Planning is the baseline for all successful agencies. Agency Consulting Group, Inc. can help you add discipline to the process to result in a cogent long-term and annual plan, supported by quarterly Action Plans and Monthly Benchmarks and, in turn, supporting a Budget that drives the desired profits to the bottom line.

We are again reaching the end of a calendar year that also marks the end of the fiscal year for many insurance businesses. Those agencies that already plan are deep into the analysis of the current year and the creation of budgets, objectives, and plans for next year and into the future. Those agents who have not yet formalized their plans once again ask themselves, their friends (who are in the midst of the process), and us: "Why are you all bothering with formal plans? We also sell insurance and we work hard every year to excel. What difference does it make to spend all this time to formulate plans, forcing yourselves to perform in accordance with your goals?"

There are no satisfactory answers for some agents. They feel that they succeeded in the past "flying by the seat of their pants" and that writing down objectives, action plans, and budgets will not make a difference in their performance. Planning is much like following a sensible diet and exercise routine to lose weight and enhance health, if you do not believe that you can lose weight, you certainly won't! Similarly, if you do not believe that proactively pursuing targets and objectives will give you a better chance of achieving those objectives, you certainly won't participate in a planning process, and, if forced to do so, will disregard it when the opportunity arises.

Of course, the same people who refuse to believe that business planning is an effective tool for enhanced performance will spend weeks and months planning a vacation in order to assure its success without a hitch. The reason that they plan vacations and not for the success of their business is Fear of Failure.

The planning process is meant to remove roadblocks from successful attainment of goals. If an agent is fearful that performing the activities required to sell more insurance and to retain more of his existing business would lead to his failure to do so, he may shy away from the process completely. He believes that his past successes are simply luck and that past failures can be blamed on others or on the circumstances of the year. He will certainly enjoy the successes of his business (whether they are caused by his efforts or by accident), but if he doesn't assume the mantel of responsibility, he doesn't have to blame himself for any failures.

Another problem causing agents to avoid the planning process is Fear of Success. Many agents do not spend full time efforts in the management and operation of their agencies. While few will admit it of themselves, all will acknowledge other agents who suffer this syndrome. They (or their parents or predecessors) have built their businesses to support them in a manner that they find comfortable. They feel that the business will continue to do so. What incentive is there for them to begin a planning process? If they truly pursue a plan, they must go back to work and put forth efforts beyond those needed to support themselves in their businesses. Agents who are honest enough to admit this syndrome as the reason that they do not plan have a legitimate reason not to create plans.

However, if you believe that purposely and specifically planning your business efforts to assure your success is a viable way of operating your business, If you would like a larger, more profitable business whose intrinsic value is building, and if you do not fear working toward your goals, now is the time to get started.

Whether you are a one-person operation or the head of a multi-location business with hundreds of employees, the process is exactly the same. If you have never strategically planned before, and want to assure the success of the process in the first year, seek professional help (1-800-779-2430 to reach us). Would you trust the repair of your car to someone who has read the books on car repair, or to someone who is a car repair specialist? A bad brake job can cost you your life or the lives of your loved ones. A bad plan can cost you time, frustration as desired events do not occur, the respect of your employees, lost growth and profits, and, in the worst case scenario, your company.

Most agents who use professional planners to get them started find that they can operate and manage their own planning within a few years. However, many continue the services of their consultants to provide new and different insights regarding methods of achieving their company goals.

Implementing plans within an agency is certainly not unheard of and, in many cases, it works as well as the planning and organizational skills of the agency owner. Whether using a consultant or doing it yourself, the steps are the same:"

1. Create Mission and Vision Statements. The owners and key managers gather to discuss what they would like the agency to be in five years. The discussions lead to two distinct written statements; a. A Mission Statement defining the business goals of the agency, and b. A Vision Statement defining how the agency desires to be viewed by its important participants, its owners, its employees, its clients, and its carriers and by the communities that it serves. While the Mission Statement defines the success of the agency in objective terms including size, profitability, area served, customer base, product and specialties; the Vision Statement tells the agency how it wants to appear (differently from its current state) to the people most important to the agency's success. This could be defined in terms of professionalism, speed and friendliness of service, underwriting capabilities, marketing aggressiveness, responsiveness to community activities, etc.

2. Since the Mission and Vision defines those positions to which the agency needs to strive, Strategies need to be created that define what the agency must do differently in each area of the Mission and Vision in order to achieve the positions desired in the Mission and Vision. The best way to attack Strategy development is to underline those sections of the Mission or Vision that do not yet define the agency's current performance (you need not strategize performance that already exists). Each underlined area requires the creation of a Strategy. The strategy is defined as what the agency must do differently over the next five years in order to reach the position of the action step in the Mission or Vision.

3. Strategies define what must be done differently. The next step is to identify objectives for each of the next five years for every strategy. Setting Long-Term Goals in this step begins the process of REALITY TESTING, during which the agency realizes what is reasonable to accomplish over the five-year period and what is simply out of reach due to the lack of time, money, or human resources.

4. Once each remaining strategy has a set of long-term goals reaching from the point of the Mission or Vision (five years hence) to the current year, the agency is ready to create its Tactical Plan for the next year. In most agencies, this step allows the inclusion of more staff members (managers and employees) because it has been proven time and again that any objectives created by the people expected to achieve them will succeed far better than objectives created by someone else and "given" to the employees for implementation. It also matures employees into greater and more important roles in an agency and permits the agency owners to identify potential successors.

5. The Tactical Plan begins with setting Objectives. The Objectives for the next year are the lowest level of long-term goals set for each of the Strategies identified. Each objective must have an "owner" (an owner, a manager, or an employee who will track the progress of that Objective through the year). The Objective owner does NOT have to be the same person who implements that objective, it is simply the person who tracks and monitors its progress. Creating objectives from the Strategies avoids the pursuit of objectives that are "hot" at the moment, but have nothing to do with the stated Mission or Vision of the agency.

Many agents are "turned on" by opportunities that come their way. They are entrepreneurs by nature and enjoy the challenge when a potential new venture crosses their paths, and some of these opportunities are worthwhile and advance the course of their business in the direction that they desired. However, you will have many opportunities during your lives, and you need to pick and choose the ones that most adhere to your core goals (presumably, those identified in your Mission and Vision). So avoid something that, while exciting, will take your eye off the ball with respect to your business development plan.

6. Once the objectives are defined, a critical step in the success of the objectives is the creation of the Action Plans. Objectives define the end result desired by the end of the year. Action Plans define the "how" to achieve the objectives. Action Plans can be singular actions that are accomplished for the entire year or they can be quarterly activities whose successes will permit the objective to be attained.

7. Finally, each objective needs a series of monthly benchmarks that tells the owners and management team whether the action plans are working in accordance with the projections. The Benchmarks must be objective (as opposed to subjective), measurable, and realistic.

After the Plan is published, the management team (all those responsible for Objectives) meets at the close of each month of the New Year to report their results compared to their Benchmarks. No changes are permitted to benchmarks, action plans, or objectives during the standard monthly meetings. The meetings are meant to communicate whether or not the action plans have been implemented and, if they have, whether they are succeeding in accordance with expectations.

At the conclusion of each quarter, a Quarterly Meeting is held (instead of that month's Monthly Meeting). Not only are the monthly and quarterly results discussed but; if action plans have cause results beyond or below expectation, the owner of the objective must alter the action plans or alter the objective accordingly. If an action plan has not been implemented, the objective owner must tell the group why, and what will be done to activate it to achieve the desired results during the rest of the year. Reasons, rationales, and alternatives are to be designed BEFORE the meeting, not at it.

All of the steps of a Tactical Plan are meant to support a Budget. The financial manager who has a good grasp on historical revenues and expenses creates the budget. The budget is first altered by the growth, new business, and retention objectives of the operating departments. It is further altered by the financial needs for equipment, personnel, or marketing costs to assure the success of the objectives. At each monthly meeting the financial manager reports on the actual results of the month (and year-to-date) compared to budgeted revenue and expense projections (and historical monthly and YTD results from the prior year).

The goal of Tactical Planning is to project the agency's year-end financial results as closely as possible as early in the year as possible. By the fourth or fifth year of planning, agencies find that they may have to adjust the budget once (at the end of the 1st quarter), but are otherwise very close to their realized results within their budgeted expectation.

Whether using a professional to facilitate the planning process, or doing it yourself, the first and foremost step is to GET STARTED. Success breed's success, and once you find the effectiveness of this business tool; you will include Planning as a normal part of your business life.


Strategic Planning is the baseline for all successful agencies. Agency Consulting Group, Inc. can help you add discipline to the process to result in a cogent long-term and annual plan, supported by quarterly Action Plans and Monthly Benchmarks and, in turn, supporting a Budget that drives the desired profits to the bottom line.

Related PIPELINE articles: