We see it all the time. Insurance agency owners are afraid to make commitments to changing agency operations. They’re scared for many reasons and honestly, none of them are good reasons. Certainly none good enough to keep the business in the same painfully stagnant spot that it’s sitting in right now.
As a business owner, you have an obligation to your employees to keep your business in healthy operation and hopefully thriving. When you act out of fear and choose to do nothing instead, you are being negligent to the people who depend on you for their livelihood.
If this sounds like a big responsibility, well, it is. It’s the responsibility you accepted (knowingly or unknowingly) when you decided to hire your first employee.
We see a lot of agencies explore the idea of changing agency operations – they talk about it and think they want to make changes, but when it comes right down to making the difficult decisions, so many just don’t do it. I won’t say they can’t, because it’s a choice to not make the change. Inaction is a decision; it’s a decision to NOT change.
Some of the most common scenarios we see are agency owners who feel like they are held hostage by any number of stakeholders. Feeling like they’re tied to maintaining the status quo holds owners back from making the changes they know they need to make. See if any of these scenarios feel at all familiar.
The Family Business
The parent who started the business (most often a father) “has always done it this way.” The next generation sees things they’d like to change and has a vision for creating a new business model and a new environment, but they’re afraid to go against everything that Dad has done and built. After all, he built a good business that has successfully supported the family for many years. But this is not an excuse to not do what's right for the business today.
The way the business was built was appropriate for the time. Changing the model shouldn’t be viewed as disrespectful, but as a natural progression in keeping the family business alive, moving it forward, and remaining relevant today and well into the future to continue supporting the family. It should be celebrated that Dad has done such a good job with the business and raising the next generation that the kids are engaged and want to keep it going. The changes to the model are no reflection on Dad; they’re a reflection on society and that the things people want today are different from the way it’s been, even as recently as just five years ago.
I realize this is an emotional issue. We have clients that are navigating this exact situation and it can be tricky. But the point is that they are addressing it and modernizing the businesses. It can be done.
The Stagnant Account Managers
There are account managers who don’t want to learn new things, don’t want to change the way they work, don’t want new ideas and fresh talent brought into the agency, and certainly don’t want to leave the office to visit with clients. This job would be great if it weren’t for all the people and demands, right?
These account managers need to go. There are too many people out there that are excited about and looking for new opportunities and who want to get out of the office and be bigger contributors to the organization. Hire those people instead. Don’t hold your own business growth back because you have people who are more committed to “their way” than the clients’ best interests, the agency’s best interests, and ultimately their own jobs.
And yes, I know that in a lot of these cases, you have people who have been with you for years; they’re like family; they helped you through all the difficult times. Give them the opportunity to change. Be very clear in your communication about what the new future looks like for your group. Let them make the decision with their behaviors if they’re in or if they’re out. You may be surprised at the responses you get when you approach the whole team with a solid vision and plan, rather than just some new ideas that may be perceived as a flavor of the day.
The Happy Producers
The worst ones of all are the producers who are happy with their books and income and see no need to do any additional work to bring on new clients. They feel completely entitled to just work on their current clients, go out to lunch and play golf with them, and generally not do much else because they have account managers who do the day-to-day work. It’s a nice life. Talk about balance!
But with every year that passes when new revenue isn’t added, you are actually going backward in your agency revenue because the cost to service that stagnant book of business is simply going up and up and eroding your profit margins.
An entitled producer who decides it’s his right to work until he’s tired of it is lethal to your business. And unfortunately, owners are so often lulled into thinking their hands are tied and there is nothing they can do about it because it’s the “producer’s book.” However, unless your producers are 1099s, the clients are agency clients acquired using agency resources.
You get to make the decisions. Producers, just like all other members of your team, are employed with you at your discretion. All employees should be working under your terms, or they leave. Period. Your business, your rules. And part of those rules need to include establishing consistent expectations for everyone on the team, otherwise you have a serious cultural problem on your hands. (And that in itself is a topic for another article!)
This business is your income and your retirement plan, and it’s the lifeline for your team. They count on you to be a good steward and make decisions that will benefit the whole. When you allow sales people to not produce new business, you are giving them a blank check from your company, personal, and retirement accounts and those of your team members. Stop the madness!
The struggle is real
It’s very hard to watch agency owners struggle with these decisions. We get it. They’re emotional and difficult. And we want to help, but sometimes there really is no helping people, unfortunately. Truly, it’s very hard to watch.
Regardless of what is holding you back from making a commitment to change, own up to it. Recognize it. And decide to do something. Maybe selling the agency is the best option because you’re not able or willing to make the changes. Or maybe sunsetting the business is the best option. But be honest with yourself and your team about it. No excuse is good enough for simply failing yourself, your employees, your clients, and your family by choosing to do nothing.
Photo by Travis.