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Continuing Education (Ce) At A Redneck Festival!
CONTINUING EDUCATION (CE) AT A REDNECK FESTIVAL!   by Mike Manes Mike Manes' biggest challenge in this article is deciding what to explain first — CE (Continuing Education) or “Redneck Festival.” The core issue is what's more important: Learning about the things of life (CE) or living it (Redneck Festival).     WARNING:   If you're contemptuous of rednecks, don't read this article because it will be a waste of your time. Just skip to the end and read the lesson the article offers.   For years, professional associations, licensing boards, and other groups have recommended or required that professionals (doctors, lawyers, engineers, mechanics, insurance agents, etc.) obtain a certain number of CE credits annually in order to retain their license or certification.   In the 1990s, Peter Senge's book The 5th Discipline defined the learning organization. Today, many speakers/consultants discuss the need for continuous learning. In our fast-paced world, continuing education is all-important.   The good news about CE is that it forces people to attend classes that are alleged to improve them as professionals. The bad news about CE is that all too often the classes merely reinforce what these professionals already know, are boring, limited to the profession, and don't provide insight into clients' needs or life.   John Locke had it right, “No man's knowledge can exceed his experience.” Unfortunately our education systems, including CE programs, all too often focus on the information/knowledge. They attempt to force-fit what the instructor knows into the skull of the attendee/student. All too often, the attendees aren't learning, but just “passing time.” This system doesn't work unless the “brains” and experiences are identical.   In my opinion, education should be about creating experiences in which knowledge is the product. Education should be about life — not books. It should be as much about scar tissue as it is about brain tissue. I can assure you that we learn more by falling on our butts than by sitting on them in a classroom. This is why I believe that a Redneck Festival is a great place to learn!   If you need proof of this assumption, consider these two facts:   •  Robert Fulghum's book All I Really Need to Know I Learned in Kindergarten was a best seller and college textbooks never are.   •  Go to the best business schools in the country (Harvard, Wharton, LSU, ULL, etc.) and meet the professors. Most of them couldn't survive very long in the real world of business!   Enough about academics. Let's talk about life: Redneck Festivals. A festival — at least in this part of the country — is a party positioned somewhere between a celebration of life and celebrating life.   Festivals can be about a crop (Sugar Cane, Rice, Yams, etc.), animals (Oysters, Frogs, etc.) a mixed event (Shrimp and Petroleum), a date (Willie Nelson's Birthday) or the arts (New Orleans Jazz and Heritage Festival, Blue Grass Music, etc.). Festivals are held at parks, fair grounds, racetracks, boulevards, barns, or city streets — anywhere.   They can be one day to longer than a week. They can include arts and crafts, music, parades, dancing, eating, drinking, etc. They attract the young, old, and the in-between. Festivals are about life and the real people that live life!   According to Webster (who wasn't a redneck), a redneck is a “white member of the Southern rural laboring class — sometimes used disparagingly.” It should be noted that this term is often used with pride by rednecks themselves or by “wannabes.” Jeff Foxworthy is probably a better authority than Mr. Webster on defining redneck.   As a practical matter, I believe that redneck is more of an attitude than an issue of geography or race. Remove the words “white” and “Southern” from this definition and you'll discover that most of the nation is or comes from redneck lineage.   I'm a Cajun. Among ourselves we're called “Coon Asses.” We're rednecks without all the pretentiousness and sophistication — and we're proud of it! Twenty-two years ago I went to a Polish wedding in Toronto and discovered by attitude and actions that they're rednecks too. Having spent much time in New Orleans, the most diverse city in the country, I now realize that we're lucky because most of the world is redneck!   Recently, I was in Huntington, Texas on business. After the meeting Sundra (pronounced Sondra), Lynn (her husband), and I went to supper at a local restaurant. We had a great time. As I reflect back on the night, this was sort of a “mini” Redneck Festival.   Evidence of this was everywhere. The parking lot had plenty of pickup trucks and very few BMWs. Everyone there understood “spit cup,” but few had ever used a “tea cup.” Considering how rednecks are perceived, I never heard a discouraging or inappropriate word; yet the polite conversation was full of “ma'ams” and “sirs.” The “surf and turf” special was ribs and catfish rather than lobster and filet. Willie, Waylon, and the boys would've been recognized and embraced; Eminem would not! We had plenty of rolls and “sweet” tea, but no croissants and hot tea. You get the picture.   I could go on, but I'd rather spend the rest of this article discussing the continuing education program for the evening. Lynn was our instructor — yet all in attendance contributed something of value to this learning experience. Lynn works in the timber industry. His hands are hard, and his face and skin are rough, but talking to him you know that he has a soft heart and a good soul (rednecks are proud of their souls).   Lynn shared his experiences, telling us a number of stories. I believe that two of these should qualify for CE credits for all professions. Unfortunately I'm reasonably certain that neither story would be approved. They're separate, yet linked. These experiences are about innovations that have saved millions (if not billions) of dollars in productivity costs, but have probably never been studied at the Harvard Business School. These were lessons learned in fields with weeds, not in buildings with ivy-covered walls.   Lynn explained that when he first started in the timber industry, the companies would cut the timber, clear the land, and then replant new seedlings. The supervisor at each plant would stress the importance of lining the seedlings up in “perfect” rows so that the machine could cut them at harvest time. Lynn became curious because he knew that trees weren't cut with machines, but by men with band saws. One day he asked the supervisor about these new tree-harvesting machines.   The “boss” explained that, although these machines currently didn't exist, if we planted the trees right — in perfect rows — the machines would be invented some day because straight rows and a large supply of trees would facilitate their invention. This supervisor understood the future. I'd bet all I own that this guy had very little “schoolin'” (brain tissue), but I'm equally certain that he had great experience (scar tissue).   Lynn then took us back to the future. He told another story — and he's a master storyteller — about a timber contractor riding through south Louisiana during the sugar cane harvest. He watched as giant tractors equipped with diagonal cutting blades plowed through the field harvesting the cane (at harvest the rows of sugar cane stand more than six to eight feet tall and must be cut at ground level).   The guy was mesmerized. He pulled off the road, crossed the fence, and asked how the machine worked and what it could do. He even had the driver show him how the blade could be rotated to cut higher above the ground. To demonstrate the possibilities, the driver snapped off the top of a fence post.   The contractor went home and began the process that would result in the tree-harvesting machine visualized by the supervisor in the first story long before the technology existed.   In my opinion, these simple stories provide textbook examples about what CE should include and who should teach it! CE should involve less time looking down at a textbook and more time looking up at the horizon: The future, the people that will live there, and the needs that they'll have. The instructors should not just be the ones who know what has already happened, but should include people with experience in the past and a curiosity about the future.   Incest and inbreeding are some of the cruel jokes that academics use to disparage rednecks. But nowhere is inbreeding more of a problem than in the world of academics and bureaucracies! They rarely develop significant innovations in their fields (remember, the tree-cutting machine originated in the cane field where no trees exist!).   The reason is simple: The academics who study a discipline and the bureaucrats who live and work in that field are too invested in the status quo to consider something new. They're in a comfort zone and progress ain't gonna happen. Never forget that necessity (discomfort) is the mother of invention!   NOW FOR THE CLOSING LESSON: A CHANCE FOR REDNECKS TO LAUGH AT THE REST OF THE WORLD!   Bubba was on his first flight and, as a novice passenger, he was very anxious. He was pacing and fidgeting as he waited for the plane to back out from the terminal. Sitting next to him was a Harvard professor, dressed in a $1,000 suit and looking calm, cool, and collected.   The professor said to Bubba, “You look anxious. This must be your first flight.” When Bubba agreed, the professor suggested a little game to “pass the time.” He said, “Bubba, I'll ask you a question, and if I stump you you'll pay me $5.00. Then you ask me a question and if you stump me — because I'm so much more intelligent, educated, sophisticated, and worldly than you — if you fool me, I'll pay you $10.00. Also because of these advantages, I'll let you go first!”   Bubba thought for a second and then agreed. His first question followed, “What's red, green, blue, has three wings and two legs and can't fly?” The bewildered professor responded, “Bubba you've got me on the very first question. Here's your $10.00.”   Bubba, ever polite (rednecks are), took the money and said, “Thank you, sir.”   The professor asked, “Well what is it?”   Bubba answered, “I don't know. Here's your $5.00.”   The professor has the brain tissue and lost $5.00. Bubba has the scar tissue and won $5.00!   Michael G. Manes can be reached at Square One Consulting,  625 Weeks Street, New Iberia, LA 70560,  cell 337-577-3885, e-mail [email protected], or visit www.squareoneconsulting.com.

Banks And Agencies: A New Way Of Doing Business
The speakers on the tape I was listening to said, 'When you complete the process of rearing your children, you want to be certain to maintain a reasonably good relationship with them. You see, your children will make two decisions that will significantly affect your life: what nursing home to select and when to pull the plug.' Sobering thought? You bet. I was listening to this tape in the middle years of parenting my two children, when I didn't feel it was working out the way I thought it should. I was trying to live up to the whitewashed concept of having children: cute babies, 'good night sugar,' refrigerator pictures, dance recitals, and home runs in little league-as opposed to the reality of dirty diapers, the terrible twos, temper tantrums, homework, defiance, and so forth. The same reality check is currently being demanded of those involved in the insurance industry. Now that banks can sell insurance, many agencies and their trade associations have had to change their position from 'We'll never let it happen' to 'If you can't beat 'em, join 'em.' The problem is that traditional banks and agencies will soon discover the massive chasm between concept and reality. To succeed in these new ventures, both will have to reinvent themselves. If only someone had told me about the reality of having children; I still would have had and loved mine, but I would have been much better at it! So let me take the liberty of sharing some of the realities about banks and insurance with you. Not to discourage you from pursuing a significant opportunity, but to make you better at it. RISK. Risk is the reason agencies exist. You're paid to manage risk, but banks have succeeded by avoiding it. You are an entrepreneur. Every day you 'roll the dice'; it's what makes your heart beat fast. Banks are institutions that manage risk with collateral; unsecured risk causes them panic. You'll bring them your best clients as bank prospects. They'll reject some of them, and you won't understand why. They'll bring you bank customers and wonder why you can't give everyone of them your best deal. REGULATION. Banking and insurance are both regulated. You recognize regulation as licensing, continuing education, and occasionally having to answer to an inquiry from the Department of Insurance. You don't defy regulators; you tolerate them. Bankers hold their regulators in awe. Regulations and the auditors that watchdog them have shaped banking and its products and processes. Auditors visit often and have their way with bankers. When an auditor says 'Jump', the banker asks 'How high?' To agents, auditors are curious interruptions. When they say 'Jump', the agents say, 'We'll discuss this when I get a chance.' Only the client tells the agent when and how high to jump! COMMISSION. It's why agents do what they do! It's how they keep score. The agency system was built on performance-based compensation. In traditional banking, 'commission' is a dirty word. Banks are built on security, position, and attendance-based compensation. Time in service and rank are the key determinants of compensation-not production. Great production and the accompanying compensation might not ingratiate you to the banks' leadership. It might actually create problems for you, if good performance results in your income surpassing their seniority-based entitlement income. DECISION-MAKING. Get the facts-and in a second, you'll decide. You make decisions quickly, based on your innate comprehension and intuition. You may commiserate with others after the fact, but you decide and accept the consequences of that decision. Bankers decide in committee. Rarely is the individual responsible for his or her decisions. Even when an answer is given instantaneously, it's probably determined from procedures written by a committee. PACE. Agents are hares; bankers tend to resemble tortoises. Agents tend to run with their ears back and full speed ahead. They believe that with speed, some direction, and a little luck, they'll prevail. Bankers move much more slowly. To them, moving means sticking their neck out of their shell, and they aren't always willing to do that. They're more cautious, and at their slower pace, there's much less chance that they'll go off course. FOCUS. The Agency System has matured in a buyers market. Banking developed in a seller's world. In banking, strict regulation limited competition and resulted in this seller's world. This basic difference in evolution has created the massive chasm between the cultures of banking and insurance. The foci of banking are products, process, and people-in that order. Insurance, on the other hand, addresses people first, then products, and finally process. Agents will be acquired by, merge, joint-venture with, or somehow 'marry' bankers. All should be successful, but only some will. Products, process, and technology won't determine success or failure. Only those who address cultural differences, focus on customers and their needs, and commit to creating a new better world of financial service delivery will end up winners. This process requires leadership. As Max DePree stated, 'The first role of the leader is to define reality.' Remember, the reality of this tremendous opportunity is not completely a matter of dirty diapers-nor wholly a scenario of 'good night sugar.' It's a balance of both. So change the diapers and enjoy the good night sugar.

What are exotic animal pets? Any animal that you would normally associate with the wild could be considered an exotic pet. Most people want to secure adequate insurance coverage for their exotic animals and pets. Our planet is home to diverse species of animals that many people haven't even heard of! Some of these exotic animals are becoming increasingly popular as pets in people's homes. The list may include and is definitely not limited to: Guinea pigs Rabbits Ferrets Foxes Wallabies Chimpanzees Hedgehogs Chinchillas Frogs, toads Sugar gliders Hybrid cats such as the caracal & the serval and even some species of spider! Two Points you may want to consider before adopting an exotic pet. Is it legal? Pet ownership laws differ from state to state. For instance ferrets are popular pets, but it is illegal to own a ferret in California or a hamster in Hawaii! Are you able to secure good veterinary care? You are directly or indirectly the reason why the exotic animal is not in the wild but in your home. Your pet is totally dependent on you for its survival. Suitable accommodation, proper nutrition and diet and most of all regular and timely visits to the veterinarian will ensure that your pet stays happy and healthy. These visits to the vet can be expensive. Specialized veterinary care is difficult to find and getting suitable insurance coverage can be even harder. What does exotic animal insurance cover? Most insurance plans cover unexpected visits to the vet as well as routine or wellness check-ups. It all depends on the type of plan you choose. Your pet animal can be insured against theft, injury, illness and even death. Your pet deserves the best, but you can avoid the financial burden of pet healthcare by taking out an insurance plan for as little as $9 a month. Think smart, be responsible & buy peace of mind, knowing that we have your pet's best interest at heart. Other types of related insurance - Insurance for reptiles, Insurance for Exotic Birds Understanding exotic animal coverage Exotic pet owners frequently look for policies that combine medical benefits with protection against liability exposures and theft. Coverage options and underwriting factors vary by insurer and by species; for an overview of dedicated marketplaces you can review Exotic Animal Pets Insurance to compare what different carriers offer. Common considerations include exclusions for certain pre-existing conditions, limits on species or procedures, and whether routine care is included. Risk management considerations — such as proper housing, transport protocols and secure enclosures — often affect premiums. If your pet is a reptile, detailed information is available in the Reptile Pet Insurance Overview. Transportation risks and specialist veterinary care are typical factors for exotic species; likewise, some plans impose surgical or hospitalization limits. If you own birds, see Does Pet Insurance Cover Exotic Birds? for specifics on avian coverage. Risk scenario: an escaped exotic animal injures a visitor could trigger a liability claim, illustrating why many owners seek policies that combine medical reimbursements with liability protection. Frequently Asked Questions Is exotic pet insurance available for all species?Availability depends on the insurer and the species. Some carriers will cover small mammals and birds, while others may exclude large or high-risk animals. Check policy details for species-specific limits and exclusions. What typical exclusions should I watch for?Common exclusions include pre-existing conditions, certain surgical procedures, pregnancy-related care, and claims arising from illegal ownership. Always review policy exclusions and ask for clarification from the insurer. How do premiums get determined?Underwriting factors such as the species, age, medical history, geographic location, and intended use (pet vs. breeding) influence premiums. Risk management measures like secure housing and routine veterinary care may improve insurability. Still have questions? Talk to a local insurance expert.

The Production Winner's Circle
THE PRODUCTION WINNER’S CIRCLE by Mike Manes The dictionary defines “producer” as a person or thing that produces. “Production” is the act or process of producing. Competition teaches that production is the lifeblood of agency and brokerage profitability and sustainability. A “book” cannot sustain you without growth. Produce (grow) or die. Producers come in a variety of styles, experience and skill sets. Great ones are a gift from God. Lesser ones challenge your faith. In metaphorical terms, each sales opportunity is like a horserace--one winner and many losers. In an agency you have racehorses, workhorses, Shetland ponies, show horses, geldings and thoroughbreds. Unfortunately, production isn’t about diversity, appearances or second place. It’s about winning. You can’t manage racehorses. Just let them run. Your job is to keep them “on track,” don’t let them kick or bite others (they will kick and bite you), and keep the blinders on them. They like sugar cubes, being groomed and stroked. You can’t house two winning stallions in the same stall. Racehorses love the track and hate the barn. Workhorses like the comfort of the barn but at least know they are paid to go onto the track. Geldings, show horses and Shetland ponies are always in the barn--planning to leave the stall or explaining why they can’t. Experience teaches that some producers make the sale then keep talking and buy it back. Great producers love the “yes,” will accept a “no” only as another step to the next yes, and hate the “maybe.” Maybes are a waste of time. Test the maybe and force a yes or a no, and then get on down the track. These same “winners” know that you must find the prospect’s pain and fix it. They sell benefits to the customer--not features of the product. Once they “stop the pain,” they’ll offer other help, but never before. They love the race, not the process, so hire someone else to keep the “stable clean.” Support them so they can stay on the track. The history and mechanics of production shows that great producers are independent and aggressive. If you’ve seen one, you know this. If you never have and you hire one, be sure you really want one. They are a challenge. One agency owner explained the process this way: “If your book produces less than $500,000 of commission revenue, you work for me. Between $500,000 and $1,000,000 of commission revenue, we are partners. And at more than $1,000,000 of commission revenue, I work for you.” Workhorses, groomed and trained, can be productive and profitable. Define their role, and responsibilities, and hold them accountable. Manage the circumstances, not them. Choose their races carefully. But workhorses tend to wait on maybes. They want to explain features and solve unknown problems. They don’t find and fix the pain. They are quickly discouraged. Results are important, so get rid of Shetland ponies, show horses and geldings. They aren’t bad. They merely aren’t suitable for the racetrack of production. They get in the way, consume a disproportionate amount of management’s time and energy and eat grain that can feed winners. There is a distinction between racehorses and thoroughbreds. In this metaphor, racehorses win races. They produce. Thoroughbreds are representatives of the privileged class--beneficiaries of the gene pool. They are in the direct bloodline of a great racehorse (producer) or an agency owner or manager. They were “born” right. Only some may be racehorses. Send them away to prove themselves on a foreign track. If they can win, bring them back into your stable. If they aren’t racehorses or workhorses, don’t bring them in. It’s not that you can’t afford to keep them; it’s that they will cost your agency more than they are worth. You may be able to feed them, but they devalue the colors of your stable because your real racehorses and workhorses will resent them and may underperform and leave. You also diminish the likelihood of bringing in the next generation of winners. I know the history of inbreeding in the agency system. I know that such inbreeding over time creates weakness not strength, resentment not allegiance and teamwork. I know that it’s worked in the past but I don’t believe it will work in the future. In the future, resources will be limited. Don’t waste these resources on faux producers, even if they come from a great bloodline, even yours! Understand that you can teach a dog to hunt but you can’t teach him to smell. Recruit producers that can smell. All others you must develop. Teach producers to “squint their ears.” Now get your producers in the starting gate. Which ones will be the winners? Michael G. Manes can be reached at Square One Consulting, 625 Weeks Street, New Iberia, LA 70560, 337-577-3885 (Cell), e-mail [email protected], or visit www.squareoneconsulting.com. Reproduced, with permission, from Michael Manes “Brokerage” column on Riskandinsurance.com.

Voodoo Valuations
People pay dearly for simple answers. And many insurance agencies pay dearly for 'voodoo valuations' because they offer a quick and inexpensive way to pacify an agency owner’s desire for a simple, quick answer. In this document, Chris Burand warns that you’ll pay dearly in the long run. According to a Louisiana legend, a voodoo queen, Marie La Veaux provided simple but costly answers for people in search of hope. She’d concoct a potion that caused a man’s heart to change with just one short kiss from a girl’s lips. Forever after, he’d be devoted only to her. For 1,000 Spanish bits or possession of the woman’s first born, Marie would undo the spell. Marie became a rich woman. Voodoo valuations aren’t easy to recognize; they often appear legitimate. Here are a few keys to recognizing voodoo valuations: THE FINAL PRICE DOESN’T CONSIDER TERMS I’ve seen many agents agree to such terms as '1.5 times commissions based on retention,' while earning less than 1.0 times. They never would’ve sold for 1.0 times even if the deal was cash. But they heard a favorable multiple and that was all they needed to hear. The answers they sought were simple. Unfortunately, the real answers were complex and required a complete valuation, thorough due diligence, and an analysis of cash flow and ROI based on a number of terms and scenarios. It’s funny how in the long run the complex answers would’ve actually earned these sellers a higher multiple. I researched a group of sellers recently. They received excellent prices, but significantly less than they expected. They didn’t consider the terms of the deal and the result was great financial pain. None of them had hired anyone beyond their local accountant. THE VALUATION ISN’T ACCURATE We expect answers to be a mouse-click or phone call away. Many valuation practitioners pretend that valuations are simple affairs. They give agents a simple formula to follow, or suggest that agents complete a do-it-yourself valuation. The answers are quick, but seldom accurate. Hardly a week goes by that I don’t get at least one e-mail from an agency owner asking, 'Is 1.5 (or whatever multiple) still the appropriate multiple?' I could get rich quick if I was willing to dispense sugar pills or Cajun spells! Agents should recognize practitioners who don’t understand the complexity of valuations. For example, before you even start a valuation you must agree on the correct definition of 'value.' Consider it a warning sign if the practitioner never discusses the appropriate definitions. Seek assistance elsewhere. I’ve helped several agencies dig themselves out of deep financial holes that resulted from a series of acquisitions. The consultants that these agencies hired used the wrong definition of value for the acquisition targets, failed to consider working capital (which caused the buyer to severely deplete their own capital), and did not complete adequate due diligence. Of course, the consultant did supply seemingly simple answers! I once saw a sign in a retail business that read, '50¢ for an answer. $2.00 for the correct answer.' Why pay even 50¢ for an answer if it’s wrong? THE BUYER’S FINANCIAL STRENGTH ISN’T CONSIDERED Many agency sales involve a seller-carry loan and/or are based on retention. This means that sellers are incurring significant risk when they sell; yet they don’t adjust their price for this risk adequately. Again, this results from searching for simple answers. If the buyer’s risk of default is high and they’re not paying cash up front, they should pay more to compensate for this risk. For example, a fair price for an agency with $750,000 in revenue might be $900,000 for a buyer with strong financials and a minimal risk of default. However, if the buyer has poor financials and is requiring a seller-carry note and/or a retention factor, then the price should be at least $1 million or more, depending on the buyer’s financials. Two financial aspects worth careful consideration are cash flow and companies that stress EBITDA (earnings before interest, taxes, depreciation, and amortization). I’ve recently met several buyers possessing what I consider extremely weak financials. They each touted their positive EBITDA while downplaying their negative cash flows. A January 24, 2002 Wall Street Journal described the risk well. The author wrote, 'A telltale sign of trouble is negative cash flow from operations while the company’s so-called EBITDA is positive.' The SEC released a warning to investors regarding companies that report or stress pro forma earnings or EBITDA earnings. If a seller is carrying risk, then the buyer should have a positive operating cash flow. Otherwise, they probably have financial problems. When buying an agency, the buyer must achieve positive cash flow, not just positive income, within a very specific period to make the acquisition profitable. THEY FOCUS ON GROWTH FOR GROWTH’S SAKE Quite a few agency owners dream of going public. Others just want to get big. Still others are tired of running their agencies and/or selling insurance. Instead, they decide to go after bigger fish, so they begin acquiring other agencies. Acquisitions can be exciting. They drive the ego. One study of acquisitions involving publicly traded companies 'noted that the undeserved premium paid is linked to the number of magazine covers the acquiring boss has graced before the deal' (The Economist, January 9, 1999). It doesn’t require much skill to buy an agency if a person is willing to overpay (which a lot of buyers seem willing to do). Disney CEO Michael Eisner recently commented, 'I spend my life being Odysseus. I tie myself to the mast, and I don’t listen to the Sirens. The Sirens in my business are agents, investment bankers, the media, people saying that your testosterone level is gone because you haven’t made an acquisition in the last ten minutes' (Fortune, January 7, 2002). Many agencies feel the same pressure to grow by acquisition regardless of profitability. This might explain why every study I’ve seen, read, or heard in the past 27 years has shown that 50% to 80% of all acquisitions fail. If being profitable concerns you, be strong in your convictions to grow profitably. Marie La Veaux made a lot of money giving simple answers to desperate people. Her magic potions were hard to resist. Agency owners are often just as eager for voodoo valuations, but the cost for quick, easy answers is often steep. You have the experience, wisdom, and alternatives. Don’t purchase or practice voodoo valuations.