Combine a simple, time-tested strategy, talented team and the commitment to execute the plan, and you’ve got a winning play. In the games of business and football, getting ahead is all about blocking and tackling.
YOU CAN DEVISE COMPLEX STRATEGIES TO OUTSMART COMPETITORS. BUT BASIC STRATEGIES THAT ARE WELL PLAYED DELIVER RESULTS.
What happens when we get too fancy? We fumble. We become so focused on a certain “move” that we lose sight of the game going on around us. Our teams get frustrated, morale deflates. A culture that lacks drive will not set any records.
Simple strategy. Talented team. Commitment to execute.
As with any industry, there are insurance professionals who promote philosophies to boost growth, attract the best producers, make your firm more attractive to private equity — whatever the goal. But at the end of the day, there’s no secret to getting ahead, growing organically or perpetuating your business.
It’s all simple strategy, executed by a dedicated team.
According to MarshBerry’s experience, if you want to double your agency’s growth in the next five years you have to grow an average of 15%. It’s back to the basics. You can’t cheat the numbers. If you want to score that growth target, you can’t skip “practice.” There’s no trick play that will get you to this number. It’s hard work, time, talent and a will to stay on course with the plan.
We know, talking about growth is easy. Executing is hard.
So, let’s take a closer look at the playbook for true growth — the best practices that we have seen top-performing agencies follow. Successful agencies benchmark their businesses to measure performance, plan for perpetuation and vision their future organizational chart. Again, their strategies are simple. The challenge we all face is following through while blocking and tackling issues that arise so we can press forward.
State of the Industry: Where Do You Stand?
How does an average firm perform? How do standout agencies elevate growth? According to Business Insurance and MarshBerry opinion and experience, the insurance industry includes more than 25,000 businesses that all operate similarly.
What separates the top performers from the rest is their ability to execute and their understanding of industry metrics? They reach for those lessons-learned from other agencies so they don’t have to reinvent the wheel. They network with peers to share best practices. They find out what roadblocks keep other firms from growth and they learn the smart way: by not repeating those same mistakes.
Understanding the state of the insurance industry and how it impacts your business is very important. With this knowledge, you can pivot quickly and make changes to your organization. Based on the market that is unfolding, you can determine whether to stay the course with your plan — or if you need to call a timeout to regroup.
Perpetuation: Independence in the 21st Century
If you took a survey of agencies that sold their businesses in the last year and asked them if they always planned to sell, in our opinion, 95% of them would have said, “No, of course not. We’ll always remain independent.”
For many, the goal to perpetuate is a hollow promise they make to their people. That’s because there’s no actual plan to make perpetuation happen. Not only is execution an issue, there is no perpetuation strategy. “A goal without a plan is just a wish,” says Antoine de Saint-Exupery, the French writer. He’s exactly right.
Independence in the 21st Century is possible if you have a concrete plan. Also, the old way of perpetuation planning to pass a business on to the next generation of owners has evolved significantly within today’s market. There are new solutions and approaches to help agencies reach their goals.
Talent Management: Picture Your Future Agency
If your goal is to double the size of your agency within five years, then the next question is: Who will help you achieve that growth? Talent management should be a continuous focus. That means constantly looking for that next resource, that next producer, that next support administrator — not waiting to hire until there’s a hole to fill.
The key is to use your financial forecast to build the future infrastructure of your business. For example, if you’re running a $10 million agency today and want to be $20 million in five years, what does that larger firm look like? What team members will you need, and what will their roles be? What talent do you already have in-house, and what staff will you need to hire? Start asking those questions now and never stop recruiting.
Organic Growth: Treat Your People like Shareholders
According to MarshBerry’s experience, top-performing firms are focused on selling new business to the tune of 15% per year if they hope for 20% growth. There’s no way around organically growing your firm if you want to reach a goal like that. Back to the “simple plan” point, there are no shortcuts or secret plays to achieve success. It’s about getting new business and plenty of it — executing on sales goals.
At your agency, do producers understand how the business is performing? Just like a publicly traded firm, you should report financial results to your producers and key employees. Treat them like investors. Let them know how you’re doing as a business and what they should expect in the future. There are certain metrics to share that will shine a light on how their performance can impact your firm’s overall success. There are core concepts that must be executed to be a true high-growth organization.
Compensation: Building a Motivated Culture
There’s no such thing as a plug-and-play compensation program that works for every agency. There isn’t one single compensation structure that is guaranteed to produce more sales and create the best culture. It just doesn’t exist.
Compensation must be structured to align with your growth goals, and with your company culture. The program must speak to who you are as an organization.
Compensation programs should help drive your people to execute on goals. They should feel rewarded for their hard work, and challenged to improve their results. Your team should feel like a team.
Compensation can be a true motivator — or the ultimate de-motivator. Most people do not respond neutrally to their compensation; they’ve got an opinion. Firms should understand what triggers their staff’s performance, and what their people consider fair and reasonable. Organic growth depends on a team that wants to win.
Get Your Game Plan for Growth
You’ve got a goal to double your agency’s size, grow by 15% — whatever your objectives, it’s time to get real about what best practices will get you to that end goal. Too many agencies talk about organic growth or promise they’ll perpetuate, but with no plan in place, they’re not even in the game.
It’s time to get in the game. Network with industry peers who can share their lessons learned, and find out where you stand with benchmarking data. Get tools to help you vision your org chart of the future so you can hire the right people to propel your organization forward.
This is not a sales pitch. It’s a reality check. Ask top-performing agencies how they got to the top. There are no secrets. It’s simple strategy and a commitment to execution.
Interested in learning more?
Register online at www.MarshBerry.com/360 for the MarshBerry 360 in a city near you. Use code MB4-AAA for $425 – a 50% discount!
This article was provided to us by MarshBerry & authored by: Phil Trem, Senior Vice President – MarshBerry | 440.392.6547 | Phil.Trem@MarshBerry.com
