The cover of a recent issue of Fortune boasted a picture of a small army of spiffily dressed, famous CEOs under the title 'Why CEOs Fail.' A study done by the magazine found that 70% of CEOs fail, not for a lack of smarts or vision but due to 'bad execution.'
When we hear sports gurus proclaim that some football team failed because of bad execution, we instinctively know the team isn't blocking well, or missing easy catches and tackles. The team had a decent game plan, good players, and experienced coaches, but somehow they just didn't get the job done.
But what does it mean when a CEO fails due to bad execution? According to Fortune's study, it means the CEOs failed to execute by not putting 'the right people in the right jobs and the related failure to fix people problems in time.' The most interesting point made by Fortune is that most CEOs recognized the problem but did nothing to fix it! As one anonymous CEO said, 'It was staring me in the face, but I refused to see it.'
All too often, insurance agency management fails for the same reason: poor execution, not putting the right people in the right place. Most agencies face a consistent body of problems, including lack of good people, automation, soft pricing, companies, and poor producers. Every one of these problems can be fixed-but only if the agency owner will execute. Too few owners will pull the trigger. They must find the right people for the right jobs and get rid of employees who don't fit their jobs.
The two most important positions that must be filled by the right people are agency management and sales.
AGENCY MANAGEMENT
Most agency owners achieved their position by selling their way to the top. But good managers have personalities different from those of good salespeople. If you're an agency owner, fire yourself from the job you fit the least. Do you prefer people problems and paperwork, or selling? Take a personality test if you don't know. Don't kid yourself into thinking that just because you're an owner you're also a good manager. A leopard doesn't change its spots.
Today's agencies are too big to run successfully by the seats of the owner's pants. Employees-especially producers-need managing, and they need management to provide direction. Needing an agency manager isn't a sign of failure. Far from it: It's a sign of foresight and sound judgement. Execution means putting the right people in the right place, including the agency owner. Pull the trigger! Put a manager in the agency manager's position.
SALES
If experienced producers aren't bringing in $200,000 in commissions and fees, at a bare minimum, they need to be reassigned-or fired. A different rule of thumb applies to agencies in small rural towns: Producers must generate at least 2.5 times their compensation. Paying poor and average producers too much money is a huge drain for many, if not most, agencies. It's the No. 1 reason that agency profitability is so poor. Pull the trigger! Stop paying for lousy producers.
Execution is the key to success, whether discussing a Fortune 500 company or a local insurance agency. As Gerald Weintraub wrote many years ago, 'All problems are people problems.' Put the right people in the right place and many agency problems will take care of themselves. Pull the trigger! Execute!