Life and health insurance agents often find themselves delighted to see their businesses growing and thriving. At the same time, however, they may feel uncomfortable and suffer from the unfamiliar territory of growth.
Moving from a small business to a mid-sized one often comes with more challenges than many agents realize.
The ability to recognize the typical growing pains, however, is the first step in addressing those challenges. Then, taking a few proactive measures to steady the course will allow the agent to manage and move through them faster.
Growing pains vary from practice to practice and producer to producer. But most insurance agents will find at least a few of their own among eight typical issues.
8 common growing pains
- All systems go (or not). Insurance practices in the throes of growth can often be overwhelmed by vast numbers of informal or undocumented project, operational, and accounting systems. As a result, the agency's profit growth may not necessarily be keeping up with its volume growth. While smaller businesses may not need the biggest, most advanced computerized systems for every area, they do need size-appropriate, documented project and accounting operational systems.
- Inconsistency. Service output and account management may be inconsistent if the firm is understaffed. Quality suffers when agents move from case to case and account to account, as individual responsibility for outcomes is more difficult to assume and assign.
- Leadership lag. Often, agency owners will hire followers but find themselves lacking leaders. Individuals with strong initiative and problem-solving skills can serve as needed professional peers and even mentors to the lead agent.
- The free spirit. Often, insurance agents are strong entrepreneurs with creative ideas and free-flowing thoughts. From the managerial side, however, they can be difficult to follow and may create a perception that there is no room in the business for other strong talents.
- I can('t) see clearly now. If employees have not have participated in crafting the firm's vision, they will find it very hard to step up and grow into the next level.
- Outgrown clothes. In the case of an insurance practice, the clothes are the organizational structure. When definitions of roles, expected outcomes, and accountability are weak, agents can become unhappy with the performance of others. They may even inadvertently stymie accountability by failing to link responsibility, outcomes expected, and accountability.
- Limited resources. Many, many growth practices require professional finance, operations, marketing, and human resources professionals but cannot afford them.
- Malaise. If there is no clear plan of action to address growing pains, agents can lose focus and energy. Those who have worked hard to bring the practice to where it is may feel burned out, and the prospect of putting out even more energy to keep growing is not a motivator.
Help for the pain
A growing insurance practice won't be able to reduce or eliminate all pain immediately -- and a business that doesn't experience some of the typical challenges wouldn't be normal. Exercising a few preventive measures and adopting a mindset of a mid-sized business owner, however, can smooth the transition significantly.
- Work to actively involve more key staff in performance improvement planning and strategic planning, with
- Conduct a strategic planning event. Then, assign improvement initiatives to key staff. This will help them take greater responsibility, and allow the agent to better evaluate leadership qualities. Create a budget and work plan for each initiative as if it were a client case.
- Provide an opportunity for all employees to participate in creating the vision for the future of the practice in a way that helps them own it.
- Analyze current staff for strengths, capabilities, and challenges. Challenge key staff to develop their own professional development goals, and provide opportunities for them to increase their responsibility for and awareness of their own career progress, strengths, and challenges. Couple this with improved performance review processes.
- Offer (or require) leadership, communication, and team-building training to high-potential staff. Make sure they learn how to provide corrective feedback. Follow through by coaching for improvement.
- Develop a leadership transition manual that spells out the criteria for success at each level of advancement. Link criteria with performance reviews, and reward and promote those with job as well as emotional intelligence.
Undertaking these types of systemic changes -- and changes in outlook, mindset, and perspective -- is not easy or fast. Many business owners ultimately decide they are entrepreneurs, not managers, but many others adapt and rise to the challenges inherent in growing businesses. Agency owners who are committed to taking their businesses to the next level often experience up to 40 percent annual revenue growth. It's up to the individual.
Sandy Blaha is a Denver-based exit and succession planning expert who specializes in the leadership succession component of the process. She can be reached at sb@sandyblahaperformanceconsulting.com or 303-260-6480.
