Table of Contents 

"The greatest challenge to management is the constant reinforcement of desired behaviors"

Winning Strategies

LOL

There's no magic bullet for lack of leadership

By Roger Sitkins

Text messaging and chatting have created a whole new language of acronyms. To get an estimate of just how many there are, I went online this morning and found a list of at least 200 text acronyms! I had no idea there were that many!

Those of you who know me or have ever heard me speak know I love acronyms. Some of my favorites:

SHO = Service Hand Off

HPT = High Performance Team

MAS = Minimum Account Size

TAS = Targeted Account Size

NPQ = No Practice Quoting

ROPE = Referral-Only Production Explosion

TUMS = The Ultimate Marketing Strategy

Obviously there are more, but you get the picture!

One of the most common acronyms today is LOL. To most people it stands for Laugh Out Loud, but to me it means something else. I'll explain.

During a recent conversation with an agency that had inquired about Sitkins International membership, I could tell almost immediately that we were not going to be a good fit. It was obvious to me that they would not be able to change their agency culture from a service to a sales culture because they clearly suffered from LOL: Lack Of Leadership! They were looking for the magic bullet that would make them a top-notch agency, but unfortunately there is no such thing. (If there were, I'd be selling them for a million dollars apiece!)

While it's great to have new strategies and behaviors, they'll never be implemented or executed without true leadership at the top of the agency. The owner(s) must be absolutely committed to change, which means not giving in to employees with a "this too shall pass" mindset.

Once you have established new growth strategies for your agency, your goal becomes managing behaviors. As I've often remarked, you cannot manage numbers, you can only manage behaviors. Assuming you have strategic alignment, I believe the greatest challenge to management is the constant reinforcement of desired behaviors.

The Characteristics of a LOL Agency

Everyone Does His/Her Own Thing. In the days when I visited several hundred agencies for one-on-one consulting, I was always amazed when I'd ask the internal service people to describe their systems and procedures for enhancing productivity. For instance, whenever I'd ask them to describe their renewal process, the first person would respond, "I do it this way…" Inevitably, the second person to respond would say, "Well, I do it a little differently. I approach it like this…" The third person would describe yet another way of doing things. Essentially, each employee used a different procedure!

This reminds me of one of the great teachings from my mentor, Gary Holgate, the original agency consultant. He would always say, "One of the main problems with independent insurance agencies is that they have two bosses: their customers and their employees." In other words, they would jump through hoops for their customers, regardless of the account size, but to a large extent they let their employees do what they wanted to do. The lesson here is that the first thing an agency must do is determine how it does business. Once it establishes "The Agency's Way" of doing business, it must make sure that everyone follows it.

LOL agencies allow individual processes, which guarantees a lack of efficiency, productivity and profitability.

Most Clients are Part-Time. Part-time clients do not have all of their coverages with your agency. I've mentioned these statistics before, but they're worth repeating: In the average agency, 66% of personal lines clients and 49% of small commercial accounts have just one policy with the agency. LOL allows both inside and outside salespeople to become order takers rather than account sellers. Instead they should be saying things like: "We want to write all of your coverages. We want to coordinate your coverages and make sure there are no gaps between them. We want to bundle your personal lines because we can save you money!"

Insurance Company Planning. The vast majority of agencies do not hit their premium goals with their key carriers. Personally, I think the whole process of agency-company planning is a waste of time. Here's why: In my discussions with carriers through the years, I've found that far fewer than 50% of their best agencies (their partner-level agencies) meet their new business premium goals.

Think about some of your past planning meetings with your carrier representatives. Typically they will say something like: "We're meeting today to set our goals for next year. We need your agency to do $750,000 of new premium with us this coming year." The agency principal response: "You got it! We'll do it!" And that's the end of the conversation!! LOL allows commitments without plans or accountability. Everyone agrees to goals, but almost no one achieves them! If way less than 50% hit their goals, it's a huge waste of time and resources.

Of course, some carriers at the partnership level are doing a great job because not only do they plan (set goals), the most successful ones strategize about how they'll execute that plan in order to reach those goals. For example, if the goal is to reach $750,000, the best carriers will break down exactly how they'll do it and how they'll help the agency.

Getting better results requires more than good intentions and lip service. That reminds me of the definition of insanity: doing the same thing repeatedly and expecting a different result! With LOL, there's no real plan or accountability.

Selling Process. Yes, this is one of my perennial favorites. In our original Producer Training Camps, before going to our current Private Client approach, we were open to the public. We found that agencies would send one or two producers to the camp and expect that to change their whole agency. (We also found that it was used as a substitute for sales leadership.)

Well, the producers would get very excited. They'd see our approach focused on differentiation and eliminating practice quoting and they'd be eager to embrace a totally new strategy that would give them an unfair advantage in the marketplace. But typically, they'd get back to their agencies and unfortunately not much would change for them. They simply didn't have the Total Agency Buy In (TABI). The Producer Training Camp (PTC) graduate would really want to implement a different approach but couldn't garner support from the other producers or the service staff. Consequently, the agency "brand" would become diluted in the marketplace and soon it was back to the old way of selling.

With LOL, producers will play the "Insurance Game" and "The Bidding Game," and throw enough against the wall to see what sticks.

Agency Business Planning. Fewer than 10% of independent agencies have formal annual business plans accompanied by ongoing accountability. Many do mini-mini planning, (i.e., "Okay, what do you guys think? Let's grow 15% this year.") and that's it. Later, when they get together at their annual holiday office party or year-end corporate event, they lament that they didn't meet their goals. And yet they vow to do the exact same thing the next year! LOL allows for plans without any sort of accountability, which is really the key to all of this. So much of LOL boils down to LOA (Lack Of Accountability)!

Knowing vs. Doing. Most agency principals know what to do. Frankly, knowing is the easy part. Doing is always the tough part. If you're an avid reader of my articles or you follow us on Facebook, Twitter or YouTube, you've been exposed to the best agency growth strategies. But often, executing that knowledge is another story. Getting TABI—our new acronym for Total Agency Buy In—takes a lot of focused energy.

Although it's not an acronym, one of my favorite mnemonics is 30I2I (pronounced "thirty eye to eye"). The concept behind 30I2I is that it normally takes no more than 30 days to move from Idea to Implementation. The problem is that those 30 days are often spread out over months or years because agents are simply "too busy" to implement change. LOL allows agency teams to continue this practice of knowing without doing.

Knowing vs. Guessing. A few months ago I mentioned that, all too often, agency principals do not know their KPIs (Key Performance Indicators). When asked questions about their KPIs of Revenue per Employee, Revenue per Producer, Revenue per Relationship, Closing Ratio, Monetized Value of Pipelines, etc., most principals will preface their answer with, "Well, it's about …" LOL allows for guessing.

On Time vs. In Time.Many agency problems stem from LOL ignoring the importance of On Time: Working ON the business versus working IN the business. I'm sure that everyone who is reading this is familiar with that phrase, which Michael Gerber coined in his book, The E Myth. The premise is that if the leadership team is always too busy to hold monthly strategy meetings, things just seem to float along. Often agency "leaders" will defend their action (or inaction) by saying things like, "We're just too busy to work on that now." This means that everyone is frantic with activity, but no one is leading. Leaders lead! And in case you're wondering if you're a great leader, turn around and see if anyone is following you!

The Bottom Line

Thomas Edison, one of the most famous winter residents of Fort Myers, Florida (where our offices are based), once said: "Vision without execution is a hallucination." Well put!

LOL allows for cloudy vision and partial execution. A TABI agency exhibits EOL – Excellence Of Leadership. Is the outlook for your agency cloudy or clear? Are you an LOL or EOL organization?

As always, it's your choice!

The author

Roger Sitkins is the founder and chairman of Sitkins International, a private client group and membership program for some of the top independent agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused on innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent agency system by providing intellectual property that empowers agents and brokers to become innovators.

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