Filed Under:Life Insurance, Life Products

The keen insight of Al Granum

As his photograph is being taken while sitting at his desk in a suburban Chicago office in early April, O. Alfred Granum, CLU, eloquently recites from memory Myra Brooks Welch's famous poem, "The Touch of the Master's Hand."

It is something he has surely done on many occasions, but it is nevertheless an impressive feat that instantly commanded the attention of the other three people in the room. In doing so, he is making a point about how in every contact with every other person, we have an opportunity to lift them up a little, or knock them down a bit.

Al Granum still likes to lift people up. "The world is full of bad news. Let's try to be as affirmative as we possibly can. I'm sure I fail more times than I succeed, but at least I'm trying."

The memory of the 87-year-old insurance industry legend remains sharp as a tack, whether it is recalling the meaning behind a present given to him by his parents upon his appointment as a general agent in 1963, how lucky he was to emerge unscathed when a Japanese kamikaze pilot crashed a damaged airplane into the USS Nevada near Okinawa during World War II in 1945, or when discussing in great detail his biggest claim to fame, being the creator of the One Card System (OCS).

Though long retired as a general agent for Northwestern Mutual -- he stepped down from his post in 1986 -- Granum still comes to his Downers Grove, Ill. office almost every day -- "It gets me out of the house," he says, and is still working to help new agents make it big in the business. He keeps in touch with many of his former agents, spends time teaching new recruits and still does some industry speaking.

He built a truly legendary agency in Chicago, earning the No. 1 ranking at Northwestern Mutual for volume in 18 out of his last 25 years while breaking numerous volume record benchmarks. For more than one year, the 45 people in his agency produced an average premium which was the highest known in any large agency in the world.

By his own recollection, he is the only person ever to be honored with the three top industry awards -- the John Newton Russell Award from NAIFA, the Solomon S. Huebner Gold Medal from The American College, and induction into the GAMA International Management Hall of Fame in 1983. He is also a lifetime member of the Million Dollar Round Table (MDRT).

Granum was kind enough to spend a morning with Life Insurance Selling, providing keen insight into what has driven his tremendously successful career.

From the beginning

Al Granum grew up in the small town of Amery in northwestern Wisconsin. His first job -- other than splitting wood for his home's wood-burning stoves, was in a local canning factory, earning 14 cents an hour. He learned early that "anyone who wanted to eat was expected to work."

His parents were big motivating factors in his life, always encouraging him to evaluate all the opportunities available to him. While he was accepted into Harvard, the lack of a scholarship to the prestigious Ivy League school made the University of Wisconsin the choice. There he graduated Phi Beta Kappa with simultaneous BA and MA degrees in insurance.

Granum graduated in 1943, right in the middle of World War II. He then spent three years assigned to the battleship Nevada, seeing nearly all of the ship's combat action before being discharged in 1946. That brought him back home to Wisconsin, where he started as an agent for Northwestern Mutual in his hometown of Amery. He moved to Chicago to work for his predecessor as general agent, John Jameson, prior to being appointed general agent in 1963.

The need for a system

While under Jameson, Granum saw an opportunity. "My assignment from Jameson was to work with younger people. Over the first 10 years, I was able to require every agent with whom I was working to keep great detail on referred leads," Granum says, noting that everything was compiled manually as computers for such tasks were still a long ways off.

The opportunity he saw was in developing a method to generate leads, which would become the basis of the OCS.

"I was uneasy during my years as an agent," Granum says, "over the fact that everybody gave lip service to the desirability of getting referred leads, but there was no system for getting them. The best way to get someone to listen is through referred leads. I could spend all the time in the world mastering a magnificent presentation, but I still need someone to talk to. It was on that basis that I put my foot down."

By processing good records on more than 50,000 referred leads, it soon became apparent that it took 10 leads (suspects) to generate three prospects (who participated in full fact-finding), and one of those would become a client. The famous 10-3-1 ratio was born.

"As results came in, we had a record to point to," Granum says. "From the time I began to require agents to keep their records, it became apparent certainly within the first year that there was a correlation -- nobody was dramatically different from the 10-3-1. Anybody who was able to get 10 leads was able to get three [to provide full fact-finding] and then one [new client]."

The ratio itself is not hard to believe, but what was somewhat surprising was the fact that the ratio stayed consistent regardless of the agent's experience. "The traditional thinking in the industry was that with more experience, the agent would do better. That wasn't necessarily the case. The 10-3-1 stayed about the same no matter how experienced the agent became," Granum says.


Another interesting finding was that many agents would find themselves hitting a premature plateau instead of continually growing their business.

As a new agent, the only clients you acquire are new clients. As time progresses, an agent's business mix changes from all new clients to mostly new and some existing clients. As more time passed, the mixture might change again to mostly existing clients and just some new clients. Granum refers to this in the OCS as "premature retrogression," pointing out that if an agent does not continuously add new clients to his book of business, he runs the risk of waking up one day to discover he is back where he started -- trying to build up his business through the acquisition of mostly new clients.

Granum says he thinks this is because new clients at the time acquired tended to be relatively young as a group. More experienced agents aren't always willing to go after young, non-wealthy prospects.

"It's a fine line. You can't say to agents, 'Don't try to get your foot in the door with a middle-aged successful person,' but the bulk of your new clients are going to be relatively young. With an agent that is plateauing, the answer almost always is that the agent is not doing anything about client-building," Granum says.

"It starts with facing the truth in your active clients. If you do your part, you keep up-to-date and serve him well, it's reasonable to expect that he'll buy from you again. Is this a client? Yes. Is he still active? I don't know," Granum continues. By helping established agents figure out which of their clients are truly "active," Granum was able to help the agent realize he might have a serious shortage of them.

"If they are happy with the number, fine. Once in a blue moon he's happy with it. But almost always the agent who does that is absolutely flabbergasted to find out how few active clients he actually has," Granum says. "I was in a position to tell every agent how many lives they had sold. If they had sold 1,280 lives, and you find out how many active clients they had, they'd be darn lucky to have 60 or 70."

This was often a wakeup call for an agent, who might then be much more interested and serious about following the OCS to solve this problem. "He is softened up to the fact," Granum says. The OCS -- particularly in its original manual form but also updated to work in a computerized format -- has helped thousands of agents create and track the kind of consistent activity that is required to be continuously successful.

Progressive expectations

"I have for a long time really believed that the most difficult and important job in the industry is intensive supervision of the new people," Granum says. "The window of opportunity is not very long. It's important to have somebody who is capable of keeping them on the track. The agent will hate the individual or say they hate them until they begin to get results. Then they appreciate what was done."

Granum immersed new agents in the OCS right from the start with a philosophy that following the system was best for both the agent and the agency. "It's been my experience that the agent who can do it has the best chance to survive, and the agent that won't do it doesn't have a good chance at surviving."

New agents had measured hurdles to clear, from accumulating efficiency point totals in certain time increments to MDRT qualification. Up to three chances were possible to hit the benchmarks, but some agents never made it to a third opportunity. "None of this baloney about, 'Let's try it again, and on and on,'" Granum says. "If they can't do it, we shake hands and go our separate ways."

He said the expectations with a different organization may not be as stringent, but makes no apologies for having held new agents to a high standard. "If you decide to affiliate yourself with our organization, we accept the responsibility to put you on a track which gives you the best chance to succeed," he says.

"Over a 25-year period, I recruited an average of 12 agents a year, but I contracted only eight a year. At the time I terminated, there were 42 active agents. Forty-one were MDRT [members]. Thirty-two of them are still prosperous and in the industry this many years after I terminated."
Two of his agents, Dave Hilton Sr. and John Cruikshank, became Presidents of the MDRT. To this day he takes many of them out to lunch on their five-year anniversaries and always writes them a note on their birthdays.

Post and plan

Granum is a strong believer in ending the day by looking forward to tomorrow -- especially when it pertains to agents using the OCS.

"I personally feel there is great merit in looking at the suspect cards. I preach 'post and plan.' By that I mean at the end of the working day, post the record, take a look at the appointments lined up for tomorrow, and challenge oneself, 'What point count can I get out of that meeting?'"

Spoken like a true over-achiever.

Creating and publishing a system was not what Al Granum had originally set out to do. "My objective all the way along had been to try to do a good job," Granum says.

The first edition of his book, The Science...The Art of Building A Life Insurance Clientele, came out in 1968. Because of his agency's success, word got out about the system, and National Underwriter promoted the text. The subsequent Building a Financial Services Clientele, a guide to mastering the OCS, is now in its 10th edition.

For more information visit

Disclosure: Building a Financial Services Clientele is published by The National Underwriter Company, a unit of Summit Business Media, the parent company of Life Insurance Selling.

Naturally, everybody has respect and high praise for a living legend like Al Granum. But who are the people in the industry whom he holds in high regard? Life Insurance Selling asked, and here are three people that quickly came to Granum's mind:

Conk Buckley, CLU, ChFC, FLMI, of American General Financial Group in Kansas City, Mo., recently selected as GAMA International's 2009 Management Hall of Fame inductee --"I have a lot of respect for the work he has done and is still doing in training second-line agency leaders who really are the foundation of the future."

Charlie Smith, CLU, ChFC, CEO of the Cumberland Financial Group LLC, a former managing director of Prudential's highly successful Palm Beach Agency, and GAMA International's 2007 Management Hall of Fame inductee -- "When the GAMA organization was in trouble, he retired early and took over the job of CEO of GAMA International. He lived part of the time in Florida and part time in Washington, D.C. and really straightened out the organization when it needed strong leadership and help."

Dr. Larry Barton, Ph.D., president and CEO of The American College in Bryn Mawr, Pa. -- "Dr. Barton is a wonderful leader -- impressive in every way."

Granum says his exposure to people like Buckley, Smith and Barton "has been very, very important to me -- the most significant plus in my career, I would say."

Brian Anderson is Editor of Life Insurance Selling.

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