How well is your agency developing quality producers — and how effective is your management?
Successful agencies face two significant challenges: Developing successful producers and establishing strong management/ leadership. Focusing on these hurdles will make it far easier to leap over them.
SUCCESSFUL PRODUCER DEVELOPMENT
Developing new producers is a high hurdle for a variety of reasons. First, producers in most independent agencies require a unique personality to succeed. Producers must be driven, willing to work long hours, have superior sales skills, and be risk-takers.
Producer development requires a significant investment in time and money. Training a new producer takes at least two years of their time — not to mention the even more significant sales and service time that others within the agency must invest to help bring this person up to speed.
Although all agencies face this problem to some extent, the producer-development hurdle looms higher for smaller agencies than for their larger competitors because they run leaner, with less money and less time to invest. Also, because they have less experience in developing producers, their owners must adjust to sharing the spotlight, communicate more, and lead a concerted effort to help the new producer succeed.
STRONG LEADERSHIP/MANAGEMENT
Although all agencies face the challenge of developing strong leadership and management, this hurdle is higher for large agencies because they have more to manage. While most businesses face this challenge, I believe that it’s a more difficult issue for independent insurance agencies because they’re owned by salespeople, who generally have two characteristics that don’t mix well with management/leadership skills: They avoid confrontation, and they prefer selling to managing.
These two characteristics can play off each other to produce undesirable results for managers. For example, many issues that managers face involve some form of confrontation. At first managers might find it easier, though not necessarily better, to postpone dealing with these issues in order to avoid disagreements. Because most owners prefer selling and know that selling is the lifeblood of their agency, they use the need to sell as an excuse to postpone such management responsibilities as resolving issues, setting goals, and setting the tone of the agency. Repeatedly postponing action on a problem can easily result in a crisis. As the ad for the transmission service put it: “You can pay now or pay later” — and paying later almost always means paying a higher price.
Leadership is the second post of this hurdle. Producers and staff generally look to the agency owner(s) to lead. The difference between the owner and employees is beneficial. The “worker bees” understand how the agency “hive” runs, and they know that it’s not theirs to run.
But if the agency owner doesn’t lead, who does? Agency owners are sometimes surprised by, or even unaware of, this expectation. Many owners are self directed and don’t need a leader. They often overlook the fact that not everyone is like them, nor should they be like them. I often see agencies floating aimlessly, with disastrous results. Usually such an agency has poor morale, a lousy environment, high employee turnover, low productivity, and a weak financial situation.
Agency owners with no desire to manage or lead have several options. The first is to commit to being a strong manager/leader by taking more responsibility for the agency’s success or failure. This requires time, dedication and energy, but the results can be highly rewarding.
The second option is to turn management/leadership responsibilities over to someone else by finding and hiring someone with the characteristics and capabilities of a strong leader and manager.
The third option combines the first two. Many agency owners abhor the details and time required of a manager; if committed, however, they often make excellent leaders. The key is for the agency owner(s) to lead, and find someone else to manage. Although leadership and management can’t be totally disentangled, the two functions can be significantly separated.
In working with many rudderless agencies, I’ve found that if an agency owner can find a way to separate leadership and management, they can sometimes overcome their reluctance to lead. Again, this is more difficult issue for larger agencies; a greater number of people require greater leadership, and righting a supertanker is far more difficult than a tugboat.
CONCLUSION
Agencies can learn to clear these hurdles, although not easily. The effort involves pain and cost, but ignoring these issues will inhibit your agency from reaching its true potential. Which result do you prefer?