By Melanie Otto
The most important role for you as a leader of your agency is learning how to build a machine that generates profit now and in the future. In today’s world, your strategy of how to accomplish that may be different than it was five years ago given workforce changes and the pressures on your industry that exist today. As a business leader, you have many roles to play and many hats to wear. As you lead your agency, four of the most important leadership objectives are your business strategy, how you align your organization, your external presence and talent management and coaching.
Business Strategy
Let’s face it, you are in this business to support yourself, your family and generate wealth, so your business strategy has to address how to generate profit, both short and long term. Crucial to managing both sides of the P&L is recognizing where profit comes from and how it ties to your core business processes. Technology is everywhere today, so evaluating cutting edge digital tools is easier when you know exactly how your business processes work and where improvement is needed. If revenue growth is dependent on new customer sales, then ensure ample resources (hours, marketing and people) are dedicated to achieve your specific objectives. Measuring the success of those resources can ensure efficient use of operating capital and help you know where to adapt if results aren’t being achieved.
Part of your strategy should be how to position your agency in your industry and where you operate by examining competitors, economic trends, technology needs, and talent available. Your strategy guides decision making and investment decisions. Given an ever-changing environment, you can’t just do this one time. Your strategy has to be analyzed based on the results achieved and the changing environment around you. Competitors add to the complexity by never standing still as they too want a competitive advantage, so evaluate their actions and adjust accordingly. Planning some “thinking time” in your schedule should not lose priority over daily operational tasks as you strive to balance operational efforts versus strategic planning.
Talent Management and Coaching
Post Covid expectations of the workforce has created employee demand for hybrid or remote work. Hybrid work may allow you to reduce rent or physical space requirements, but it changes the way business leaders communicate, team build, and manage their culture. A leader who can adapt to the hybrid workforce has to develop a staff that is empowered to work independently yet be available and accountable. The impact of technology is pushing more information into the hands of your team which can provide them with information power and decision-making authority appropriate for their functional level. This can lead to you having more time to focus on development and coaching your staff versus dissemination of information. Employees welcome your investment in development and coaching as it shows them their work is highly valued. And whatever you do, don’t neglect the soft issues as these can lead to a negative culture and an unproductive team. Personal connection makes it clear that you value more than just their work.
Organizational Alignment
Let’s face it, we have a plethora of information available at our fingertips. Deciding what data is useful to manage the business is crucial to not put you and your managers into analysis paralysis. Once you decide what data is useful, ensuring a free flow of that information to your team allows you to hold them accountable while empowering them to aid in aligning their individual function with the overall success of the business.
External Presence
Keeping up with customer expectations is a never-ending challenge, so listening to them and soliciting feedback is important to help you adapt to changing needs. Active engagement with customers, industry groups and the community you operate in aids in promoting your agency. Positive engagement in the community at all levels of your team leads to a strong image for your agency and potential referrals. If your staff and customers are happy, they will portray your agency in a positive light. That’s important because in today’s world, they have communication platforms to let the world know how they’re feeling in a matter of seconds.
Needs of the customer requires understanding and explaining the exposures in a premium range that is manageable for them. Lowest premium isn’t always best for the customer, but in some cases, it may be necessary given their economic situation. Listening and asking questions to gauge their decision drivers is important to retaining current customer and earning the business of new ones.
It’s a challenging time to lead an agency today. Selling to meet the needs of the customer while hitting the drivers your carrier wants is no easy task in the current environment. Strive to balance short and long term initiatives by finding opportunities for both business growth and operational improvement. Value your team and coach them to reach their goals while exhibiting patience to allow time for them to execute on the strategy. Finally, spread your value in the community to increase your positive image and reach.
Melanie Otto is Senior Vice President of Agency Finance at First Mid Bank & Trust. For over 15 years, she has successfully supported insurance agencies with growth capital, debt restructuring, and acquisition financing. Melanie’s consultative approach is highly valued by her customers. To speak to Melanie directly, reach out at motto@firstmid.com and learn more on First Mid Agency Finance’s website at www.firstmid.com/agency-finance/ or reach them at 877.294.8785.
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