The hidden evolution path

that determines whether an

independent agency stalls, struggles or scales

The agencies that win—especially  in the modern, tech-enabled,

client-demanding market—are the ones that choose

to evolve rather than wait for the market to force them.

By Roger Sitkins

Every independent insurance agency, regardless of size, geography, niche, or history, is on a journey. Some agencies grow steadily year after year. Others plateau. Some struggle through market cycles, always “just getting by.” And a select few achieve extraordinary results—organic growth 50% better than what the Reagan Best Practices Study identifies as high performance.

What separates these agencies isn’t luck, location, or the market.

It’s the business model they operate—often unconsciously. If you’ve been a loyal reader of our Winning Strategies column, you’ve heard one of our most impactful statements: Your current business model is perfectly designed for you to achieve your current results.

Over decades of consulting, coaching, observing, and walking alongside thousands of agency leaders, a clear pattern has emerged to me. Agencies evolve through Three Phases of Transformation, each defined by:

• A mindset
• A set of behaviors
• A level of discipline
• A predictable performance outcome

Most important, each phase contains a hidden “gravity” that either pulls the agency backward or propels it forward.

This is the deeper narrative behind those three phases—the one leaders rarely see until it’s too late.

Phase 1—The transactional agency

Phase 1 is where most agencies are and, tragically, where many will remain. These agencies use a reactive model: busy, chaotic and constrained.

Walk into a Phase 1 agency and you’ll feel the energy immediately: movement, noise, urgency, and a never-ending flow of tasks. These agencies are not unskilled or uncaring. In fact, they often work harder than anyone else. But they are stuck in a model that rewards reactivity.

How do Phase 1 agencies operate? The entire business revolves around what comes at them. These include carrier updates, client questions, renewal problems, claims, certificate requests, quote requests, and price objections

The agency team members rarely initiate. They react.

Phase 1 agencies usually operate under three dangerous myths that can lead their to being trapped:

1. Hard work equals growth. It doesn’t. Hard work without intention becomes churn.
2. Great service is enough. Service is expected; differentiation comes from strategy and consistency.
3. Producers can “sell and service.” This is the single greatest lie in the industry.

When producers spend any time in service, they stop selling. They become part-time producers, achieving part-time results.

What does it feel like to work in a Phase 1 agency? Team members often tell me:

• “I can never catch up.”
• “Every day feels the same.”
• “There’s no time to improve anything.”
• “We solve the same problems over and over.”

This is burnout disguised as productivity.

There is an invisible cost for being transactional. Remaining in Phase 1 produces predictable failures:

• Producers max out at 5% to 7% organic growth at best.
• Renewals become transactional, price-focused, and rushed.
• The agency’s best clients receive the least innovation because everyone is too busy.
• Staff turnover increases because people feel overwhelmed and are not engaged.
• The agency grows in revenue but not in profit.

Worst of all, Phase 1 has gravity. It pulls people back to the urgent, rewards heroics over systems, and celebrates firefighters rather than architects. And unless leadership breaks that gravity, the agency remains stuck—no matter how much technology, training, or good intention is added.

So where does the turning point start? Transformation begins when leadership says: “We are working too hard to be getting this little in return.” That statement or breakthrough unlocks Phase 2.

Phase 2—The upgrading agency

Phase 2 is where the agency’s business model starts to change, not just the workload. These agencies use a strategic model with clarity, standards and conscious redesign.

This is the moment the agency stops accepting the accidental business model it inherited and begins to pursue an intentional one. It’s where leaders start designing the agency they want rather than enduring the agency they have.

The pivotal belief driving Phase 2 is a mindset shift; leaders will say, “If we want better results, we must build a better business model.”

Everything starts there.

What does upgrading look like in reality? This is the “construction zone” phase. It includes:

1. Modernizing the technology stack. This is not a matter of just buying tech, but rather using it with purpose. This includes CRM adoption, pipeline visibility, automation workflows, AI-powered communication, and analytics dashboards.
2. Clarifying roles. This is where producers get their lives back and invest the majority of their time (their only diminishing asset) where they should: in the Green Zone. Sales and service are separated, clear expectations for each role emerge, time standards get established, and the service professionals stop being dumping grounds for producer chaos.
3. Establishing agency-wide standards. I read something recently that really hit home. Only 8% of people reach their goals, but 100% live up to their standards! As agencies upgrade, they establish standards that become the guardrails. These standards can include stewardship reports on the top 20% of clients, future ideal client pipelines, continuation processes not renewals, minimum account size, and targeted account size.
4. Shifting to leading indicators. There is a big difference between leading and lagging indicators. Lagging indicators (such as revenue, profit, and retention) tell you what did happen. Leading indicators (pipeline size, close ratio, completion of the retention process, sales activity) tell you what will happen.

Top agencies obsess over the future.

There is a human side of Phase 2. Here’s the truth: This phase is both transformational and emotionally uncomfortable. Long-time employees resist new standards, older producers fear role clarity, technology adoption creates anxiety, some employees feel exposed by accountability, and meetings initially take longer as the team breaks old habits.

This friction is not failure; it is the cost of growth and the price of transformation.

Agency leaders’ roles change dramatically with additional responsibility. They have to repeat the vision until they are sick of hearing it, enforce standards even when they face pushback, coach people through change, protect the momentum from the “we’ve always done it this way” crowd, and celebrate progress, not perfection.

As for the results of Phase 2, once the upgrades take hold, agencies experience several positive and visible improvements. They no longer renew insurance policies; they now continue relationships. There are fewer emergencies and interruptions. Producers invest 80% of their time in the Green Zone. Client retention and cross-selling improve. A better client experience is the new standard. Internal communication across all departments is the new norm. Organic growth and operating profit hit new levels.

However, the agency isn’t fully transformed yet. It has the structure—but not the discipline. It has the systems—but not the identity.

Phase 3—The transformed, high-performance agency

Phase 3 isn’t accidental—it is built. These agencies use the predictable growth model and are disciplined, focused and exceptionally profitable.

This is the phase where the agency operates with mastery, precision, and clarity. It consistently outperforms its peers. It attracts better clients. It wins more ideal opportunities. And it delivers a world-class client experience every single time.

Phase 3 agencies have shifted their identity and see themselves differently. Leaders will say things like, “We are a consultative, proactive, relationship-driven sales organization. Our unique selling proposition and proactive client experience give us a strategic advantage.” This identity produces behavior, behavior produces culture, and culture produces results.

The following are behavioral markers of Phase 3 agencies:

1. Producers spend 80% of their time in the Green Zone. There are only four main sales-related activities that are the foundation for the best producers.

• Actual sales
• Relationship management
• Continuation, not renewals
• Continual pipelines development

They are no longer hiding behind service-related activities.

2. The client experience is standardized and proactive. Every client—especially the top 20%—receives:

• Annual stewardship report
• Risk assessment
• Strategy conversations
• Proactive continuation planning
• Coverage improvement recommendations

Clients view your agency and your producers as trusted advisors, not order-takers.

3. AI and automation power the engine. AI drives the majority of “non-human tasks” and communication. This frees up your team members to focus on relationship management rather than reactive servicing. Your agency management system drives repetitive tasks, digital tools manage pipelines and workflows, and technology amplifies human capacity.

These agencies are lean, efficient, and scalable. How lean, efficient, and scalable? When your revenue per employee exceeds $300,000.

4. Accountability is normal. Having a true culture and cadence of accountability is non-optional. A few years ago, at our annual Private Client Meeting, I asked the agency leaders the following question: How great would your agency be if everyone actually did everything they said they were going to do? You may want to ask that question to your leadership team.

All team members should know their KPI’s, responsibilities, performance targets, and weekly activity requirements. There is no ambiguity, only extreme clarity. All of your team members love being part of a high-performance team.

As for the financial impact, Phase 3
agencies routinely achieve organic growth 50% above the Best Practices Study, operating profit margins at
30%-plus, lower service workloads, stronger producer effectiveness, higher client retention, and consistent referral flow.

This is the agency of the future!

Phases and a deep question

Here’s the hard truth: Agencies can stay stuck in Phase 1 for decades. Agencies can get trapped halfway through Phase 2. Agencies can reach Phase 3 and slip backward without discipline. Agency transformation is not a moment or an idea of the month! It is the business model followed by the leading agencies, and it requires conscious leadership.

The question every leader must ask is not “Which phase are we in?” Though that’s important. The deeper question is: “Are we committed to building the phase that comes next?”

Transformation is not about perfection; it’s about commitment. The agencies that win—especially in the modern, tech-enabled, client-demanding market—are the ones that choose to evolve rather than wait for the market to force them.

As always, it’s your choice.

The author

Roger Sitkins is the CEO of Sitkins Group, Inc. After over 40 years he has truly become an icon in the insurance industry having trained and mentored thousands of insurance professionals.

Roger was inducted into the Michigan Insurance Hall of Fame in 2017 and in that same year also received the Dr. Henry C. Martin Award from Rough Notes magazine. Roger is among only six people to have the honor of receiving this prestigious award.

Recognized as the nation’s top insurance agency results coach and renowned leader for improvement, he believes that if you improve the life of one person, you improve the world. To learn more, visit www.sitkins.com.