OTHER PAGE

Execute!

All too often, insurance agency management fails due to poor execution: not putting the right people in the right place. Most agencies face a consistent cadre of problems: lack of good people, automation, soft pricing, companies, and poor producers. Every one of these problems can be fixed.

The cover of a recent issue of Fortune boasted a picture of a small army of spiffily dressed, famous CEOs under the title "Why CEO's Fail" Fortune's study found that It's rarely for a lack of smarts or visions that CEOs fail but rather, they estimate 70% failed due to bad execution.

When we hear sports gurus proclaim some football team failed due to bad execution, we instinctively know the team is not blocking well, missing easy catches, and missing tackles. The team had a good game plan and good players and coaches, but they just did not get the job done.

What does it mean though when 70% of CEOs fail due to bad execution? According to Fortune's study, it means the CEO's failed to execute by not putting the right people in the right jobs and the related failure to fix people problems in time. The most interesting point made by Fortune is that most CEOs recognized the problem, but did nothing to fix it! As one anonymous CEO said, It was staring me in the face, but I refused to see it.

All too often, insurance agency management fails for the same reason these CEOs failed, poor execution: not putting the right people in the right place. Most agencies face a consistent cadre of problems: lack of good people, automation, soft pricing, companies, and poor producers. Every one of these problems can be fixed. However, they can only be fixed if the agency owner will execute and too few owners will pull the trigger. They must find the right people for the right jobs and get rid of those employees that do not fit their jobs. The two most important positions that must be filled by the right people are agency management and sales.

First, Agency Management. Most agency owners are owners because they sold their way to the top. Now that they are at the top, they are still salespeople. Good managers have different personalities than good salespeople. As an agency owner, fire yourself from the job you fit the least: Do you prefer people problems and paperwork or selling? (Take a personality test if you do not know.) Do not kid yourself into thinking that just because you are an agency owner you are also a good manager. A leopard does not change its spots.

Agencies are too big today to run successfully (unsuccessfully is possible though) by the seat of the pants. Employees, especially producers, need managing and they need management to provide direction. Needing an agency manager is not a sign of failure as an agency owner. Far from it, it is a sign of foresight and sound judgment. Execution is putting the right people in the right place, including the agency owner. Pull the trigger! Execute! Put a manager in the agency manager's position.

Second, Sales. If an experienced producer is not producing, at a bare minimum, $200,000 in commissions and fees, they need to be reassigned or fired. A different rule of thumb for agencies in small rural towns is a producer must generate at least 2.5 times their compensation. Paying poor and average producers too much money is a huge drain for many, if not most, agencies. Paying poor producers too much money is the number one reason agency profitability is so poor. Pull the trigger! Execute! Stop paying for lousy producers.

Execution is the key to success whether discussing a Fortune 500 company or a local insurance agency. As Gerald Weintraub wrote many years ago, All problems are people problems. Put the right people in the right place and many agency problems will take care of themselves. Pull the trigger! Execute!