Agencies with Perpetuation Plans to transition management and ownership from one generation to another often fail to properly implement the plan or do it in a way that actually hurts the perception of the change. Al Diamond addresses the complexities of agency perpetuation in this document.
“The World’s Worst Kept Secret” provides a way of completing the Perpetuation Plan with a Transition Plan that casts a positive image on the retirement of one owner and the assumption of control by another.
The reason the Plan is called “The World’s Worst Kept Secret” is that before the public announcement, management holds private meetings to inform the most important players about the transition in a way that casts a positive perception on the move.
These players are employees, key clients, carriers, and the local community. If there’s either a curt public announcement or no announcement of the transition, each of these interested parties might easily suspect that: (1) The owner is being forced out, or (2) business is bad and the owner is bailing out. Although neither suspicion usually holds true, perception often overcomes reality; which means that the agency must try to convince everyone that the new owners are as capable as the retiring owner and that nothing wrong caused the transition.
The World’s Worst Kept Secret begins with a meeting that informs employees about the impending retirement. Never permit employees to find out about the retirement from outside the agency. The retiring owner uses this meeting to praise the employees and the new owners, to assure everyone that this is a friendly departure, and to ask employees to keep the information confidential until the public announcement is made.
Once the employees have been told, the retiring owner should re-assign customers to new owners or producers and introduce these people to each account as the owner’s protégé. During these meetings, the owner will tell the client “confidentially” that they’ll be retiring soon and that they have the greatest confidence in the new owner/producer.
The next step is for the owner to contact carrier managers to inform them “confidentially” about the impending transition.
Obviously, the news of the retirement will spread far and wide within a few days of informing employees, clients, and carrier management. It has become The World’s Worst Kept Secret and can now be announced officially in the newspapers and through a general letter to all agency clients.
I also recommend a retirement party that invites a wide cross-section of clients (those with whom the retiring owner has an established rapport), all employees, carrier management, and line employees who work with the agency, as well as community leaders. This party will allow the new owners and others to praise the retiring owner — who, in turn will praise the new owners and publicly express full confidence in the new agency management team. This public display of confidence should eliminate any perception of weakness in the agency’s evolution.