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Promoting "people power" Building leaders at all levels helps agencies stay independent By Elisabeth Boone, CPCU
“I suppose leadership at one time meant muscles; but today it means getting along with people.” That statement, made by the woman who governed India in the turbulent years between 1966 and her assassination in 1984, offers a window into the philosophy of insurance industry consultant Demmie Hicks, the founder and president of DBH Consulting, Inc., in Atlanta, Georgia. She challenges traditional management models and encourages her clients to view every member of their organization as a vital contributor to its success. For most owners of privately held businesses, an overarching goal is to achieve growth and profit while retaining their cherished independence. Recognizing that many agencies would rather stay independent than be swallowed up by consolidators, Hicks researched the factors that are critical to remaining independent. One of the most overlooked factors, she found, is the development of people at all levels of an organization—not just the top tier of owners and managers. As Mrs. Gandhi observed, the results produced by building consensus likely will be superior to those generated by waving a big stick. “DBH Consulting is unique in the industry because we believe in creating a leadership culture throughout an organization—not just management—so the firm can become the broker and employer of choice,” Hicks says. To that end, DBH Consulting offers its independent agency clients the services of organizational and behavioral psychologists who understand the nuances of personal motivation and interpersonal dynamics. When she established DBH Consulting in 1995, Hicks brought to the table an impressive background in management and operational consulting. She began her career as an insurance automation trainer and later joined the Institute for Insurance Research, the predecessor of ACORD. Hicks subsequently became an associate and later a partner in Hales & Associates, a leading management consulting firm to the insurance industry. She has worked with such entities as Assurex Global and PAR, Ltd., and was a chief architect of the PAR Quality Management project. (PAR—Professional Agencies Reinsurance, Ltd.—is a captive facility that provides E&O coverage for agents and brokers. A detailed profile of PAR appeared in the August 2005 issue of Rough Notes.) Assurex Global and PAR remain important clients of DBH Consulting. Advice from a mentor Early in her career as an automation trainer, Hicks says, a highly respected independent agent gave her some advice that changed her career path. “He told me, ‘Don’t limit yourself to the automation side of insurance; become a student of the business,’” Hicks says. “I trusted him, so I followed his advice, and I’ll always be glad I did. I set out to learn everything I could about the independent distribution system. Through that process, I became aware of what I enjoyed the most, and in the late 1980s I had the opportunity to join Hales & Associates.” (Hales later was reorganized with the formation of Reagan Consulting.) “Hales primarily focused on the financial aspect of organizations,” Hicks continues, “and my interest was in how people and systems work together to perform. As an automation trainer, I had the opportunity to observe this process in agencies when I was helping them make the transition from a paper-based environment to automated workflows. I had a tremendous career at Hales, and I have great respect for the people there,” Hicks says. “I went out on my own in 1995 because I had a burning in my belly to do something different.” Having made the choice to follow her entrepreneurial leanings, Hicks says, “I decided to sit for a while with the uncertainty about what exactly I was going to do. I wanted to find a tremendous need within the independent distribution system where I could focus my efforts and build an organization to satisfy that need,” she declares. “I observed that with the drive to grow and remain competitive, agency owners focused almost completely on financial indicators,” Hicks says. “I became curious about the continuing trend toward consolidation—agencies selling to banks and to public brokers—and what this was going to mean to the culture of our powerful distribution system. “For example,” she continues, “when you become publicly owned, you’re serving shareholders as well as clients. Your focus changes, and meeting the needs of shareholders becomes the priority. What traditionally has made the independent agency system successful is the high level of expertise the local or regional agent brings to the community,” Hicks declares. “I looked at what industry consultants were doing in the area of perpetuation planning, and in assisting agency owners to remain independent,” Hicks continues, “and I saw that, given the strong focus on financial performance, very little attention was being paid to what really drives performance, and that’s people. While I was working with the CEOs of agencies that belong to Assurex, I would ask them: ‘What keeps you up at night?’” Hicks says. “Almost universally, they said ‘perpetuation,’ and how that is influenced by recruiting, developing, and retaining quality people.” Out of balance
When agency owners—and consultants—get caught up in the numbers game, measuring performance by financial indicators, Hicks says, “We forget that those numbers, and every other aspect of performance, are driven by people. I felt we were out of balance, and I wanted to find ways to restore that balance. I didn’t want to discount the financial indicators because, without those, you’re out of balance the other way,” she says. “But I saw a big and growing need to address the ‘people’ issue. I saw that agency owners were interested in it, but they didn’t have the answers. They would try this or that, but there wasn’t a defined process for attracting, training, and retaining good people.” At the same time, Hicks continues, “I became very interested in organizational development, which is concerned with how your organization’s people, culture, and systems all work together. That’s how I began to develop DBH Consulting and draw in the kinds of people who are involved,” she says. “Outside the insurance industry, we see lots of organizational psychologists; but in our industry, probably because it’s entrepreneur driven, we don’t see much of this approach. There tends to be a lot of ‘group think’ around what the top insurance industry consultants are saying.” From the start, Hicks was resolved that DBH would not be just another management consulting firm. In fact, she says firmly, “We are not management consultants. We aren’t competing with other firms for clients whose financials need to be strengthened for an eventual merger, acquisition, or sale. I wanted to build a firm that, like the traditional consultants, has the insurance and distribution expertise—and I wanted to bring in a new level of sophistication in organizational development and behavior.” Joining Hicks on the DBH Consulting team of principals are Maureen Hunter, Ph.D., an organizational psychologist who works with Fortune 100 companies, start-up businesses, and not-for-profits; and Hamid Mirsalimi, Ph.D., a psychotherapist, executive coach, and consultant. Serving as a program adviser to DBH is Edwin Nevis, Ph.D., former director of MIT’s Sloan School of Management and currently president of the Gestalt International Study Center, which he and his wife, Sonia March Nevis, founded in 1979. Look who’s talking Not much can happen in an organization if people aren’t talking with one another openly and productively, Hicks says. “One of the greatest stumbling blocks to an organization’s being aligned and moving fluidly, instead of with tension, toward stated objectives is the ability of individuals within the organization to communicate effectively with one another and feel like they’re heard and understood.” In today’s high-tech work environment, Hicks observes, people often avoid face-to-face communication. “It’s so easy to hide behind e-mail and voice mail instead of sitting in a room and having a really meaningful dialogue about the goals we’re supposed to be working toward,” she says. “Add in the usual water-cooler talk, and it’s clear that this isn’t productive communication.” Hicks says some of the agencies working with DBH will need to learn new behaviors. “We bring everything out into the open. We go into a room, and we stir it up. Our work is not about being a consultant standing in front of a group and doing all the talking. Our work is creating a safe place where people can openly and honestly put things out on the table—and it works.” Equally important, Hicks points out, are strategies for conflict resolution that allow people to express themselves effectively without being overly confrontational or aggressive toward colleagues. To anyone who doubts the value of effective communication within an agency or who is uncomfortable with what may sound too “touchy/feely,” Hicks cites a recent study conducted by Watson Wyatt. “They found that firms that have strong internal communication have 80% better financial performance than firms that don’t pay attention to how their communication process works,” she says. Empowerment is key Using the slogan “Empowering People Who Power Organizations,” Hicks and her colleagues created a menu of services and programs that support the development of motivated, successful employees. To that end, DBH focuses on team building and leadership development at all levels of an agency. DBH Consulting’s approach to strategic planning is a multi-phase process: • Assessment—Objective overview of business, competition, industry, customer hot buttons • Planning/retreat/soul searching • Vision/mission statement and goal setting • Strategies and action planning • Implementation, including ongoing coaching • Review and reassessment During the implementation phase, DBH Consulting works with the client to ensure that projects are completed and goals are achieved. When new challenges or opportunities arise, the consultants work with the agency to make appropriate adjustments to the strategic plan. While recognizing the importance of financial and operational factors in perpetuation planning, the principals of DBH Consulting believe that a “people strategy” is essential to the success of an agency’s perpetuation plan. The DBH perpetuation process is designed to address all aspects of a transition. Key elements of the process are: • A sound financial plan that allows departing owners to receive value without draining the agency’s resources • A strategic plan that provides direction and focus • An operational plan that provides guidance on the management of resources • A transition management plan that anticipates the impact and unintended consequences of leadership changes • Next-generation leadership that is poised to shepherd the agency through its next phase of existence • Highly qualified staff who have been encouraged to realize their full potential and who therefore are committed to the long-term success of the agency DBH Consulting also offers “Developing Women Leaders” services and holds an annual conference for women called “The Influence of Power ... The Power of Influence.” Another program, “Influential Leadership for Insurance Executives,” is designed for both agencies and insurers and is appropriate for producers and sales executives, account executives, CEOs, CFOs, and COOs; senior executives in marketing, underwriting, claims, and loss control; and senior managers. Kudos from clients DBH Consulting draws high praise from the independent agencies that retain the firm. One such agency is Cobbs, Allen & Hall of Birmingham, Alabama, the Rough Notes Marketing Agency of the Month in March 2005. An Assurex Global partner, the agency was recognized by Business Insurance as one of the Top 100 U.S. Brokers for 2004. “We knew Demmie from her work with the PAR program,” says Grantland Rice, III, president of Cobbs, Allen & Hall. “A couple of years ago, we asked her to do some facilitating at our annual strategic planning meeting. She brought in a couple of people from her team, and they did a great job,” Rice says. “Now we bring her in once a quarter to make sure everyone is on course with our plan. We use her as an accountability partner for the various task forces we have set up.” A key strength Hicks brings to the table, Rice observes, is “helping us understand why a certain thing is important, and then drilling down to what we need to do to make that work and how it affects the big picture.” Another area in which Hicks excels, he notes, is “doing team building exercises and getting everybody to open up, so one department’s people can understand where another department is coming from.” With comments like these, it’s no surprise that DBH Consulting is expanding both its client roster and its menu of programs and services. Demmie Hicks is a woman on the move, and her energy, experience, and enthusiasm are a powerful force in helping agencies retain their cherished independence. * For more information: |
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