As crazy as it sounds now, there is a story that the Commissioner of the Patent and Trademark Office in 1902 recommended that the office be closed. His reason: He was pretty sure that anything that could be invented had already been invented. Truth or fable, it makes you think twice about innovation and change.
And as much as we are all aware of change and know on a certain level that change is inevitable, we often fall into a trap of not truly appreciating how much different tomorrow will actually be, especially when it comes to the boundaries of our businesses.
When it comes to our businesses, two boundaries are most relevant. The first boundary is defined by what we perceive to be the needs of our clients. With that boundary established, we then set the second boundary of "what we do" to be aligned with the first.
No boundaries
When we were kids, we had no boundaries on what we could do. Ask a little kid, "What do you want to be when you grow up?" And you'll get every kind of answer from an astronaut to a cartoon character. They perceive no boundaries. But, as we get older, the boundaries become more and more narrow.
I'm guessing there aren't many of you who would have answered the "what do you want to be" question with "insurance." Yet, despite the fact that most of us end up here accidentally, very few of us leave once here.
The reason seems pretty obvious. This industry offers rewards that I can't imagine being available in many other industries. We have the opportunity to make nice incomes. We have a reasonable work/ life balance (outside of the fourth quarter anyway). And we get to make a meaningful impact on the businesses of our clients.
As much as I believe these advantages are all appreciated, however, I think they pale compared with the final two: a recurring revenue stream (we get paid really well when we sell something, and we KEEP getting paid well year after year), and the fact that everyone has to buy what we sell.
The rewards of the industry are so great that we are willing to make a "deal with the devil." In order to have those rewards for ourselves, we accept the very narrow boundaries of an industry that is myopically focused on the fact that everyone has to buy insurance. We fall in line and narrow the boundary of "what our customers need" down to the one single need of insurance. And, because we will always align the boundary of "what we do" to meet the needs of our customers, we narrow that boundary down to "we do insurance."
Competitive boundaries
And the deal with the devil doesn't end there. We also accept a boundary on how we can compete and how we get paid.
The insurance that brokers are so focused on is a commodity. And, if you are dealing with a commodity, you now have competitive boundaries imposed on you. With a commodity, you can only compete based on lowest price. This forces you to see who can bolt the most features onto the product, and then you try to differentiate yourself by promising better service.
Revenue boundaries
You also accept a boundary to be placed on the revenue coming into your business. As generous as it has been in the past, the deal with the devil means we have only been able to get paid based on the predetermined commission schedules provided by the carriers.
In the past, the narrow insurance boundaries were fine. We knew that if we had enough activity, we would write a new group. When times were good, those existing clients would grow by adding employees or even a new location. And, along with the predictably large increases, percentage-based commissions assured you of getting nice increases in your income, even in years when you didn't write much—or any—new business.
Oh, how times have changed.
Because of all the threats on the benefits side of the business, our results are less predictable than ever before. Virtually every reward that has kept you in the industry is now under attack (commission schedules are shrinking and the work/life balance is fading). It doesn't mean you can't still have those rewards because I believe they can be greater than ever, but you will have to work for them like never before.
Redefining boundaries
As Abraham Lincoln said, "The best way to predict your future is to create it."
Creating our future means redefining those critical boundaries of our business. We must start by redefining what our customers need. As much as customers have to buy insurance, they want so much more.
Including those of you who have the responsibility of buying insurance for your own agency, buyers resent the fact that they have to buy insurance. But it is an important part of what they really want.
What business owners really want is to be an "employer of choice," to attract and retain the employees who will make them more successful and to have higher levels of employee engagement as part of their work experience.
With this new boundary of "what our clients need/want" defined, we must start to redefine "what we do" in order to meet that need. This means you are no longer merely in the insurance business; you have to be in the "make our clients better" business.
Redefining how your business works
Redefining boundaries of what your business does is not an endeavor to be taken lightly. Given the threats to the current boundaries of your business, it is also not an endeavor of choice. It has to become a necessity.
Once faced with the daunting task of creating new boundaries, many agency owners start making excuses. They say, "If I change how we work and ask my team to change what we deliver to our clients, they'll leave." We also hear, "All our clients want is an insurance solution. They only want us to help them get the best deal on their insurance." Like all excuses, these stink.
If you have members on your team who aren't willing to grow with you as you grow the business, you have the wrong people on your team. If you have clients who won't accept anything other than an insurance answer from you, it's only because you haven't taught them to have greater expectations of you and their relationship with you.
You have to be willing to grow your business in such a way that you outgrow some of your current team members and some of your current clients. If you don't, the best of both will outgrow you.
Raise your game
We also hear the excuse, "But all we have ever done is insurance." This may be true, but being in the benefits business, I guarantee you are doing it differently than you did a few years ago. It wasn't that long ago that none of you reading this could carry on a conversation about ACA. Yet, because you recognized the need to master ACA for the benefit of your clients and your own survival, you can now carry on a conversation about perhaps the most complicated piece of legislation ever written.
Because your survival depended on it, you studied and expanded the ways you can help your clients. You now need to use that same willingness to learn new ways of helping your clients. Expanding your boundaries depends on it, and the very survival of your business depends on it.
Remember, we must align the boundaries of what we do with what our clients need. The role of the broker has never been more important, and your clients need you in ways they never have before, which means you have to work in ways you never have before.
Sure, it's scary, but just look at the ACA—you've already proved you're capable. And, as we all know, facing your own fears is the first step toward becoming the feared competitor in your market.
A version of this article was originally published in Rough Notes magazine.
Photo by © Mydubway.
