We are watching a lot of very unfortunate and disturbing behavior play out in insurance agencies, and we're seeing a lot of people get hurt as a result. So much of the bad behavior and results we see can be turned around with the recognition that businesses are different now. That people have different expectations from their employers and their business partners.
However, it might not be possible to make the necessary changes with the current old-guard leadership. I'm not referring to an age group here, but it certainly displays that way on a frequent basis. It's really a mind-set, and one that has been around for way too long and needs to change. This same mind-set can perpetuate through generations, and we're seeing it in some fairly young people.
Bad behavior in action
- We're seeing owners make the choice to sell the agency because they've been so focused on their own wealth and lifestyle that they've allowed poor management and lack of leadership to drag the agency down. Redundant positions get eliminated and the people who are still there become a number in a corporate conglomerate. Their jobs are now being driven by rigid governing policies designed to control employees rather than serve clients and communities.
- The contingent of owners so focused on their accumulation of over-inflated compensation for the past 20, 30, 40 years are wild-cards and making desperate moves to hold on to everything they can at the expense of everything in their paths. We're seeing once-reasonable owners now laying off long-term employees who have literally built the business; owners making decisions about resource spend based on their immediate personal wealth at the expense of the future business; and owners threatening people and taking a slash-and-burn approach to cutting expenses.
- Denial. One of the most common scenarios we see is leadership who is so focused on "this is the way I built the business" that they can't see how the world and expectations have changed around them. They insist at all costs that their old-guard way will work if you do enough of it. However, if your clients and employees and partners no longer value that original business premise, then it won't make you money any longer. No matter how hard you try to force it. We're watching these agencies literally wither and die on the vine, and it may be the saddest scenario of all. Really, wouldn't you rather go out being relevant and fighting a good fight?
We're also seeing a new emerging mindset, and again, we're seeing it at all ages:
- Sales people who want to do more for their clients than just place insurance.
- Account management teams who want to be a part of the entire client experience beyond processing paperwork.
- Clients who are looking to brokers to be consultants in multiple areas besides just the insurance policies.
However, none of this new mind-set matters if the old-guard mind-set is in charge. The ones with the new mindset are getting increasingly frustrated and dissatisfied in their roles. And now we're watching them leave and take their talents and ideas elsewhere.
Why is all this happening?
It's because your Purpose drives your Culture, and when your Purpose is out of alignment with what employees and clients want, you've got a mess on your hands.
Insurance agencies generally have had a singular Purpose to "make money" and have been designed and organized to support and service the focus of making money (this is the Culture part). Unfortunately, what this does is it makes clients merely a result of the efforts to bring money into the agency. And it makes employees simply the custodians of this effort.
Having a Purpose of "making money" is putting agencies out of business and/or making them think they have "no other option" than to sell (and display all those other irrational behaviors). This is a model that's been in place for a long time and has allowed a lot of people to make a lot of money. But now it's falling apart because people want different relationships with their employers, their co-workers, and their business partners.
Agencies who steadfastly maintain this model will likely show more and more of these bad behaviors because desperation sets in when a comfortable status-quo gets disrupted. And if the owner doesn't first implode things on his/her own with desperate moves, the employees and clients will gradually leave them – the boomers who have dutifully maintained this model will retire and the younger generation won't tolerate it. And eventually clients will either get tired of it, or they'll naturally gravitate to companies with different cultures because their cultures are changing too.
If you've got one of the old-guard organizations and have to compete against someone with the new emerging mindset, you'll be on the losing end. And if you think that your employees are happy or won't leave, you're kidding yourself. They will leave. And they're probably using time on your clock to create their own plan to take you on head-to-head.
You hold the power to change it
All of this negativity is completely avoidable with some strategic changes, which can actually leave you with a better business that thrives in ways you never imagined. It starts first with recognition that the expectations of businesses have changed and you need to change with them.
After that acceptance, you need to define a new Purpose that engages your team. This Purpose should be singularly focused on serving the needs of your clients, and then the natural result of that focus becomes the revenue (rather than the revenue being the focus).
When you've got a new, engaging reason for being, then reorganize the team to create a new Culture – a Culture that centers on serving the needs of your client community and develops internal talent to rise through leadership and ownership ranks.
We truly believe that the best days for these agencies are ahead, and it's not a case of having to leave your glory days behind. If you don't yet see how this can happen, then give us a call – we'd be happy to help you see a brighter future for yourself and all your employees and clients you've committed to helping.
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