1. Leadership skills are both innate and learned. If someone already has leadership experience, or is a natural leader, then he/she can continue to refine those skills through further experience and studies (readings for example) in leadership.
2. Additionally, the implementation of an organizational structure that fits a given agency—this will depend on the skills and talents of the agency’s staff as well as the size and business model of it—also can enhance and develop the leadership skills of its key management personnel and staff.
3. When staff are identified that have leadership potential, and can be seen as the future of the agency, it is critical to allow them to continue to develop and to be given more authority and responsibility (as warranted) to grow their leadership skills. One agency leader, for example, keeps a list of special causes a person is involved in or talents a person exhibits and then calls on them when a project arises that requires the these skills and interests.
4. Another aspect of strong leadership skills is how well the agency staff is developed, through industry training and professional designations, and within their own leadership capabilities. A well-prepared, trained, and educated staff allow for even further development of leadership (skills) at that agency. One agency keeps track of employees who are particularly proficient with a particular skill (such as Excel) and uses those employees to train others, thereby elevating the “unlikely” trainer in the eyes of their fellow employees and building confidence among employees that they need to bring continuous improvement to the agency.
5. Leaders work with employees so that the individuals succeed in getting the task at hand done and are given credit for successes and constructive criticism when improvements are needed.  

2. Strategic Thinking
Objective: The ability to clearly visualize and prepare for changes that will impact the manner in which the agency should best conduct future business. These agencies will consistently commit time to think strategically, and have the ability to plan for technology changes, the changing diversity of their communities and expectations of their customer base. They will more quickly adapt to the changing environment around their agency. These agencies will leverage their strategic thinking to identify key personnel to plan and execute, and prepare and educate their agency workforce. This will result in transitions that are more seamless for the agency and a better experience for their customers.
Steps to Achieve:

1. As with many aspects of business success, Strategic Thinking begins with commitment and continuous focus from the agency leader(s).  
2. Those involved must understand and agree upon where the business wants to be in the future.
3. From this, the agency leadership should discuss and create a clear model of what their agency will look like; from current-state to end-state.
4. In planning sessions, ensure the focus is not on the tactical (the “What”), but on strategic aspects (the “Why?”, and even “How?”).  Examples:  “How will customers be contacting us in 3 years?”; “Why would we want to use xxxx technology?”
5. Keep in mind that strategy is not driven by future intent alone (end-state); it’s the gap between today’s reality and intent for the future that is critical in the strategic planning process.
6. Discuss and agree upon the resulting opportunities that fit the overall plan for movement toward the end-state. 
7. At this point, the agency can begin to move from Strategic Thinking to Strategic Planning – where the roles and steps to implementation can be clearly divided into specific, time-driven plans.
8. Keep in mind that Strategic Thinking is not a once-and-done exercise, but must be an ongoing process. Changes in demographics, technology, and consumer expectations & behaviors make it crucial to revisit strategic plans and participate in strategic thinking sessions on a consistent basis.

3. Clear Brand Positioning
Objective: 360-degree understanding among all stakeholders (owners, employees, customers, prospects, business partners & opinion leaders) of the agency’s brand.
Steps to Achieve:

1. Understand Brand: The agency’s brand—online and offline—will be the organization’s most valuable asset. From the owner’s perspective, it will guide employee behavior.
   
   From the consumer perspective, the brand will help them decide where to buy. It’s about trust: People choose brands to simplify the bewildering number of choices with which they are confronted. This reduces the shopping, analyzing, and decision-making process to a simple affirmation of: “It’s the right one for me because I trust it offers the best value to meet my needs.”
   
   The brand is what members and prospects might say about you. Strong brands build loyalty—reducing turnover and increasing revenue per customer. Strong brands attract people to work for you. You also attract the best carriers.
   
   A strong brand offers the agency many capabilities:
   • Attract and retain customers.
   • Enhance your influence with constituents.
   • Get more referrals.
   • Talk more about value than price.
   • Expand your offering of products and services.
   • Recruit and retain employees and business partners.
   • Survive a crisis (e.g. hard market, complicated merger, departure of a key employee).
   • Go beyond customers…to raving fans.
   
   And most importantly, without a strong brand, you’re just a name or a commodity—and if that’s where you’re at, it’s all about price and not value. In the process of selecting a brand, customers declare their relationships with products and potentially the enterprises behind it. Over the years this bond of brand loyalty can lead to remarkable cumulative lifetime value. The bottom line: Companies create products and services, but people buy brands.
   
   Thus, it is important for the agency to go through the process of defining the agency’s personality for the next five years, and beyond. What is it today? What should it be? What could it be? More important, with the proper strategy and investment, what will it be?
2.  Understand the Required Investment: A strong brand is something you earn, not something you receive. The smart agency of the future that realizes that marketing and communications spending is an investment, not an expense, will build agency value. Best Practices agencies consistently are spending 1% to 3% of annual revenue on these activities (the larger the agency, the percentage typically drops). Some agencies are redirecting more of the annual spend towards younger talent to handle social media initiatives; where in the past they might have directed more to paid media, for example.
   The goal is to build a brand, not just a name. With a brand, customers and prospects feel they have a relationship with the firm, the entity, the collection of staff—and not simply with one name (which often is a person, such as a producer or principal). Hales & Company estimates that independent agencies with a strong brand have an increase in their valuation multiple of 100 points or more. So, while an intangible, brand does translate to tangible value.
   Again, when managed carefully, consistently and strategically, agency branding is an investment, not an expense.
3. Rate Your Brand Touch Points: Your dollars work harder—and your brand communications are more consistent—when all your brand touch points (see below) have the same high-quality look and feel. For each touch point, ask:
   • Does it align with my brand promise?
   • Does it convey the image I want for my agency?
   • What is the current identity’s value with the agency’s constituencies (customers, carriers, media, etc.)?
   
   More specifically, on a scale of 1 to 10 (1 is very weak, and 10 is excellent), rate the following examples of brand touch points:
   • Company purpose/vision
   • Customer perception
   • Public relations activity (e.g. philanthropic support)
   • What opinion leaders say about you
   • Receptionist, phone system
   • Employees as responsible “partners”
   • Business name and brand identity
   • Name recognition in your desired markets
   • Agency visibility, signage, location, parking, lobby
   • Business partners (e.g. carriers)
   • Web site and online presence
   • Advertising, PR, social media, marketing materials
   • Giveaways (mugs, hats, pens, etc.)
4. Create & Update an Annual Marketing Communications Plan: If your firm doesn’t have a customer and prospect communications map, any road will do. Start out with a modest plan, but create a written plan. That plan should include:
   1. Agency business goals.
   2. Specific audience sets you are targeting.
   3. Key message(s) to each set.
   4. Selected media/channel tactics (e.g. advertising, social marketing).
   5. Investment for the year, in total and by type of activity.
   6. Responsible parties for carrying out the plan (outsource and/or insource resources).
   7. Timeline for activity.
   8. Plans to measure results.
   Goal(s). A plan might be modest, to include one or more of these examples:
   • Build/Maintain brand awareness
   • Expand a social marketing initiative
   • Expand to new target market
   • Penetrate current markets more deeply
   • Keep valuable customers
   • Cross-sell customers
   • Ramp up referrals
   • Introduce new capability (life, benefits, HR consulting, etc.)
   • Expand demographically
   • Announce a new service or location.
   
   Tracking. Put someone in the agency in charge of creating the plan—and then benchmarking your calls and referrals, and tracking results quarterly of your campaigns. Measure non-financial impacts as well, such as social media mentions, clicks back from your e-newsletters to your website, phone calls to the agency, and quoting. All of those will lead to an uptick in traditional financial impacts—new sales, policies per customer, etc.

4. Knowledge
Objective: A highly “in-touch” team that has the best insurance knowledge, and a team of professionals that has achieved appropriate designations and/or degrees. Additionally, this agency will be continually investigating technical and web presence trends both within the insurance industry and in the bigger business world. Knowledgeable leaders are pushing the boundaries of best practices to a better and higher level.
Steps to Achieve:

1. Each individual in the agency will have an education and growth plan. This will vary by position and individual. For example:
   a. An entry level P & C service staff member could be working on the Associates in General Insurance Designation Program. This program teaches the basics of P&C.
   b. Once an individual has good basic knowledge, the next step might be achieving their CISR or ACSR designation.
   c. As the individual advances their knowledge they should to proceed on to a CIC or CPCU or other appropriate program.
   d. This path will look different for those individuals in Human Resources, Finance and Information Technology. Some individuals may be interested in securing a degree. There should be standards for which degrees are encouraged and supported by the agency.
   e. The goal is that everyone is growing and taking their game to the next level. This continues to move the entire agency to new and better levels.
   f. Have a rewards plan in place for achievement.
   g. Continuing education for insurance licenses and designation programs is also considered and included in each individual’s plan and is financially supported by the agency.
2. Provide staff the tools, time and support (financial & verbal) for their education is key to having this achieved in the most effective way. Consider allowing a stated amount of time each week for self-study and a quiet place for that self-study for those individuals working on a designation, degree, etc.
3. Interact with business peers in other industries to learn what they are thinking about and how business outside the insurance industry functions.
4. Read about and research technology trends. Example: Are iPads more productive for producers than laptops?
5. How is technology changing within the insurance industry? Should you continue with your current agency management system or are there better options available? What other technologies might you benefit from adding to your toolbox?
6. Know what is happening in the global world. Broaden your horizons.
7. What are the web and social web trends you should be considering or engaging in?

5. Anticipatory
Objective: Successful agencies need to be able to anticipate or foresee changes that are coming, and be pro-active if possible to make changes in marketing plans and agency operations, where needed. Changes are coming so fast, that it is becoming harder to recognize changes that need to be made.
Steps to Achieve:

1. Attend local, state, and national insurance conferences (associations and user groups), to stay abreast of the latest trends and tools to compete in the marketplace.
2. Read insurance publications and listen to successful agents.
   Encourage young professionals to enter the insurance business.
3. Listen to different age groups and keep up with marketing trends.
4. Try to anticipate changes that are good for your business.
5. Consumers are becoming more connected through mobile devices, and these mobile devices are evolving at a fast pace. It is becoming harder to anticipate how we will be communicating with our customers and prospects, but we need to continually read, listen, and attend meetings to try to anticipate changes that are rapidly coming our way.
6. Continually probe your staff on changes they are seeing with clients, the community, markets, competitors, and other businesses.  How are other businesses creating new experiences for their customers and using technology innovatively.

6. People Management Skills
Objective: An agency of the future will easily accomplish/achieve its defined mission while at the same time ensuring its employees are “taken care of” in the sense that they are comfortable and motivated when it comes time to carry out the daily work of the agency. They are also prepared and confident professionally to handle the work they do. Agency management is clear on the expectations, and holds employees to these expectations in a fair and consistent manner.  In conjunction with good leadership skills, people management entails identifying talented employees – or rather the strengths and skills of each – so that they can be assisted in their professional development, as well as personal lives.
Steps to Achieve:

1. Clear expectations, outlined in an agency operations or HR manual, and the methods by which the meeting of these expectations are measured, need to be communicated to all employees – new and existing – and annual (or other appropriate period) performance evaluations are a minimum. Part of these evaluations should also encompass job performance and a portion should be dedicated to continuous professional development, from a minimum of the skills that the job (their current position) requires to a maximum of what a higher position would require.
2. Another side that may need to be developed, and that is usually already built in to how an agency operates, is the internal camaraderie and appropriate personal interaction within the staff. Employee recognition for good work, birthdays, and other important life events are a minimum. Of course, how an agency approaches these is very much dependent on the characteristics of the agency, but to some degree, this is as important as the professional development side of people skills.
3. Additional good employee management entails keeping staff informed with regard to major decisions and how the agency is doing and regarding major decisions; involving staff in providing input to improve agency processes in the areas in which they are involved; and encouraging and then responding to employee recommendations to improve the agency.

7. Financial Management
Objective: An agency that focuses on their financial results regularly in an effort to proactively make changes and adjustments to improve the financial results in the future. The agency benchmarks against industry Best Practices standards, reviewing expense areas where the agency is too high, but also where it is too low. Identifying expense areas that are too low may help you zero in on areas you can make stronger, as well as to avoid areas where you might incur emergency expenses in the future, if you do not address.
Steps to Achieve:

1. Look at your IT expenses relative to Best Practices. Budget to spend towards the benchmark.  If you don’t, you can get surprised when a major server or set of servers crashes & you are forced to buy a new one (not budgeted). 
2. Look at your Account Manager (AM) salaries, relative to what size book they handle, not how long they have been at your organization. One agency has created “profitability models” that depict an AM that handles $X book should get paid $Y, with no outside help. If the agency adds a claims person, that AM will need to handle a larger book to help pay for that. The same holds true for any other outsourcing – marketing, billing, assistants, etc. We then plug in the numbers and show the AM how much they have to handle to earn $X. They better understand how much they have to handle to justify their income and it forces them to utilize outside resources provided.
3. Involve front line people in the budgeting and results processes. This makes them more accountable and helps them to see the big picture. For example, the head of the IT department for one agency records every piece of software & hardware the agency purchases and licenses on a spreadsheet and compares it to the budget every month so that we are always aware of exactly what we have left to spend in that area. Same is true with the agency’s administrative assistant (AA).  The agency meets with her monthly to review what we have spent toward the budget in Admin/Operations. This makes her question when we are ordering things, rather than just ordering what people ask for.

8. Strong Sales Skills
Objective: Adoption of a “sales culture” at each level of the agency will result in increased agency profitability through both new business development and improved retention. Particular attention to organic growth opportunities utilizing technology, and training of service personnel to recognize account development opportunities, will lead to success.
Steps to Achieve:

1. Agency management should develop a solid understanding of the Components of Agency Value and establish Agency Benchmarks compared to Industry Benchmarks for key areas: 
   a. Profitability,
   b. Retention Ratio (by lines of business, client count, premium and revenue),
   c. Number of Companies Represented and their Competitive Advantages,
   d. Average Account Size and Commission Rates by Lines of Business / Niche,
   e. Productivity (“spread”), and
   f. Compensation (validation based on Production).
2. Technology should be utilized to develop and track agency statistics such as:
   a. Book of Business by Client, Premium Size and Revenue (policy type, premium, commission)
   b. Book of Business by Carrier (premium, commission)
   c. Average Policy Count per Household (sales focused agencies should have at least an average of 2.0; less than 1.5 indicates a need for improved cross-selling)
   d. Average Premium per Policy (indicates  cost to service various lines of business)
   e. Agency Split of Business (Commercial, Personal, Life, Benefits, etc.)
   f. Geographic location of accounts.
3. Agency Goals should be set according to opportunities identified through 1 & 2 above:
   a. Revenue Goals – develop focus on new lines of business, cross-selling initiatives, account rounding opportunities as identified by agency management through benchmarking exercises
   b. Producer Goal Setting – develop target market expertise, pre-qualification skills, presentation skills including use of technology, time management and organizational skills, sales tracking (contact to appoint ratio, quote to close ratio, etc.), asking for referrals
   c. Staff Development Goals – consultative selling skills taught to internal support staff including effective questioning techniques and listening skills, understanding client expectations (value vs. price, timely and accurate service, follow-up and follow-through, pro-active contact, excellent verbal and written communication skills), referral generation
   d. Marketing Goals – effective lead generation, lead tracking, digital marketing opportunities, assistance of insurance carriers.
4. Ultimately, the Agency must commit to becoming Client-Centered – hours of operation, client self-service opportunities, use of technology, service standards, technical skills development, complaint resolution practices, client surveys, pro-active communication and client contact, showing appreciation for client loyalty, advocacy.

9. Agility 
Objective: Agile is defined as the ready ability to move with quick easy grace. The agency of the future must be in tune with both opportunities and changes in the market. This includes, but is not limited to, the economy, insurance carrier appetites, needs of their clients and prospects. The agency must be able to “turn-on-a-dime” while not disturbing exceptional client service or the well-oiled processes already in place. Agile means never assuming things should continue to be the same and always looking for new ways of handling old problems on a day to day process.
Steps to Achieve:

1. The agency that can be agile must run like a clock. This includes well defined Standards, Processes and Workflows that have been fully trained and implemented. The agency will also be monitoring for proper use and re-evaluation to continue to be up-to-date with unnecessary steps removed.
2. While running like a clock, these processes need the ability to be flexible in all areas when the situation calls for fast action.
3. The agency should have a plan in place for such things as:
   a. Your number one market for your niche product just announced it is withdrawing from the market.
   b. Your #1 personal lines auto insurance carrier is increasing rates 25%.
   c. You have an opportunity to receive an endorsement from an association to write coverage for all of their members.
   d. You have an opportunity to write a major account which will increase the agency’s workload beyond the agency’s current capacity.
   e. Your agency management system vendor or other major system vendor is going to have a major upgrade to the system. Many changes need to be reviewed, workflows need to be reviewed, training needs to be done, etc.
4. Agency mindset is to look at every situation as an opportunity to learn and move forward.
5. An agency well versed in or interested in finding the best technology options that may be added to aid in its specific situation will fare best through these events.
6. An agency should have knowledge of resources available via outsourcing that could aid in getting through the immediate situation.
7. Know who and what is coming at you from all directions. Your competition is not only the agency down the street. Your competition is on the street, on the TV, on the radio and on the Internet which means every electronic Internet attached tool in the world.

10. Know Your Customer
Objective: Agents who “Know Their Consumer” will be in a position to brand and market their agencies efficiently and cost effectively, resulting in increased sales and improved profits.

They understand that attracting new customers to the agency involves more than “one-size-fits-all” generic advertising, such as the yellow page advertising or “Dear Resident” direct mail.  

They will implement systems to identify those prospects most likely to buy from their agency and will develop targeted messaging that assures improved conversion and ROI. 

An agency who knows their customer will embrace niche marketing, even in personal lines, and then will look for ways to “round out” that niche client with the offer of other agency products and services.

These agencies will be recognized as “experts” in their areas of focus, which will attract a higher volume of quality referrals from similar consumers or businesses.

Close ratios will be above average because internal sales and operational systems can be tailored to the areas of focus.
Steps to Achieve:

1. Study existing book of business closely:
   a. Identify current geographic, demographic, or industry reach
   b. Identify occupational, avocational, or buying preference similarities
   c. Identify “passions” and “personalities” of agency, agency principal, and staff.  Are there types of clients where the agency & clients share common interests or communication styles or backgrounds? (i.e., someone who resists technology would not work well trying to sell/service a high-tech firm; boat owning agency staff will be more effective describing the benefits of a robust yacht policy.)  Customers like doing business with people they perceive as being like themselves.
   d. Identify and rank existing clients (Platinum, Gold, Silver or otherwise) to determine clients producing the most profit for the agency. Answer the question:  “How do we get more Platinum clients?”
2. Survey existing clients electronically (such as SurveyMonkey) or via newsletter/letter with postage paid response card.
   a. Identify preferred methods of communication
   b. Identify preferred hours of operation
   c. Identify products/services desired but not yet available from agency
   d. Identify areas of potential improvement.
3. Establish a “Client Advisory Board”
   a. Invite a mix of existing clients and centers of influence
   b. Encourage feedback that will help agency to improve services
   c. Referral growth should also be an outgrowth from these members.
4. Strategically choose trade organizations, community groups, or non-profits to join:
   a. Position agency to be present where the desired client(s) “hang out.”
   b. Affiliate membership of trade organizations may provide opportunities for targeted advertising or event sponsorship. Participation will also improve team members’ understanding of the risks faced by these clients.
   c. Familiarity and exposure in community groups and non-profits should lead to increased business from members of these groups and increased referrals once the agency is seen as a local and contributing member of the community.
5. Become “uber-local”:
   a. “Farm” select neighborhoods in community by supporting groups important to that neighborhood, such as local schools, youth sports teams, etc.
   b. Participate actively in local community events (National Night Out, Independence Day parades, Neighborhood Watch groups)
   c. Create events for local community (Shredding events, E-Cycle events, emergency preparedness workshops, defensive driver classes)
   d. Advertise strategically and locally in neighborhood weeklies or high school newspapers.
6. Develop customized landing pages and blogs that will demonstrate expertise to your niches or neighborhoods:
   a. Focus on the issues specific to the niche and offer solutions to their “pain points.”
   b. Include elements that allow for quick and easy sharing of the blog with others.
   c. Leverage awards, endorsements and centers-of influence by highlighting them on the landing page or in the blog.
   d. Know the “language” of your niche and use it.  Maximize key words in website/blog design that reflect the niche’s style of conversation. People “search” using terms that are familiar to them and their industry/community.
7. Know the transitions your customers are going through: e.g., young driver on parents’ policy – what are we doing to keep that young driver when they go out on their own?

11. Social
Objective:  Agency is fully engaged in on-line and social networking activity. Social is not just an isolated “project” or marketing initiative. Rather, it is an integrated “personality” trait of the agency. Social activity and engagement is how the agency communicates and engages with their customers and prospects. Social is how the agency sees itself and how is operates.
Steps to Achieve:

1. Develop and implement an on-line, mobile, and social policy. A guide for agency and employee behavior with regard to “social” activity.
2. Develop and implement a comprehensive marketing and communication strategy which assumes social as a core component.
3. Train all employees on the use of social tools
4. Encourage and reward social activity (part of job description and skill set)
5. Manage – new job or job description of “Community Manager”
6. Monitor and measure.

12. Efficient Processes
Objective: An integral part of a successful agency of the future will be its ability to create, implement, audit, and improve (when appropriate) its processes. These processes must be efficient, scalable, and fully support the agency’s mission and strategic direction. Successful agencies will have a full suite of documented workflows (processes); staff that is trained on them; and more importantly, staff who are always looking for additional ways to improve or make these processes more efficient.

The profitability, productivity, and levels of service that agencies can achieve through the adherence to standardized processes will ensure their continued success.
Steps to Achieve:

1. Define your current processes to include a flow chart or at least an outline of the steps, with significant detail. If procedures are not yet standardized, have folks create them for each way that they do business for the major workflows (new business, renewals, cancellations, claims, audits [CL] and endorsements).
   Note: The ACORD Power of Change ® is a fantastic framework for this exercise. See also ACT’s Best Practices Guide to Agency Business Processes & Information Management , which includes sample agency workflows. 
2. With the current processes mapped out, have a working group analyze the problem areas, areas of opportunity, or any other repetitive or non-value added steps.
3. Determine what else is missing when it comes to the agency’s management team’s requirements and what is needed to run the agency (think – reporting, use of Download, Real Time, electronic files, etc.). With these requirements in mind, define other “musts” that each of the processes has to accomplish—a view from the customer perspective is a large part of defining these “musts.”
4. Evaluate your current technology infrastructure (management system, sales platform, document management platform, etc.) and its ability to support your “musts” and to address the problem areas and areas of opportunity.  Be plugged into your user groups, attend user group meetings locally and nationally, and take advantage of the insights of your fellow users.
5. Brainstorm solutions, changes to the current (and now mapped) workflows, and ways to better implement the technology you have—as well as technology you could implement or must improve upon—for your final processes. 
6. Additionally, define the metrics that you must track and report on to see your improvements in efficiency, productivity, and profitability. The systems and processes implemented must create or capture the data points needed for effective business intelligence.
7. Document, train, and follow through on the updated processes.
8. Most importantly, audit the processes—both to ensure people are adhering to them, but to also identify further improvements that can be made.

13. Effective Business Intelligence
Objective: Don’t rely on your gut as to how you are performing.  Keep the results in front of you as your driver.
Steps to Achieve:

1. Think through the types of processes you want to monitor and the business intelligence tools needed to manage the activity.  For example, one agency developed a report that shows the results to goal of 4 major steps in the renewal process for large C/L – Pre-renewal (110-120 days before renewal), Proposal (30 days before renewal), policy binding (5 days before renewal), and Policy Delivery (within 60 days after effective date).  Each month, the agency runs a report to see how it did in each of these steps of the renewal process and it shares it with its account managers and producers. The results unequivocally show that, if you get your pre-renewal done on time, the rest is likely to follow.
2. Implement a Quality Program. Quality programs have several aspects, such as CAPAs (Corrective Action, Preventive Action), File Audits, Training, Metrics, etc. Every month, our Quality Coordinator produces a booklet that is presented to our Management Team with results of every aspect of our Quality program. An entire 1-1/2 hour meeting is spent reviewing key aspects of the report.
3. Create a Dashboard report that will be provided to Managers and Supervisors daily. This dashboard will show key results indicators that are easily obtainable from our Agency Management System, such as Sales YTD and Retention YTD.