August 9, 2014
‘Agency 2020’: Can You Get There? (Part 1)
by Mike Manes
This diagnostic will help agencies fully critique themselves and prepare for the strange new world that is rushing at us.
It’s been 45 years since astronauts Neil Armstrong and Buzz Aldrin first walked on the moon. “That’s one small step for man, one giant leap for mankind,” Armstrong said. Many consider this to be mankind’s greatest adventure. Today, you should begin planning for the greatest adventure in your agency’s history. Now is the time to prepare for what I call “Agency 2020.”
This is your mission: to survive and prosper in tomorrow. It’s a Star Trek mission. Your challenge is to seek out new life (future consumers) and civilizations (niches and affinity groups), to boldly go where no man (or insurance agency) has gone before.
This preparation is merely one “small step” to fully critique, improve and prepare your agency today so that it can explore strange new worlds – the global and virtual marketplace – that will be prevalent in 2020. In other words, you need to prepare your organization for the one “giant leap” required for future prosperity.
To give you perspective on the world of 2020, consider this statement from a July issue of The Kiplinger Letter: “The next big phase in computerization: connecting all objects of all sorts … buildings, industrial machinery, appliances, medical devices, vehicles, roads, containers, apparel and much more. In an ‘Internet of Things,’ 26 billion objects will communicate with others by 2020 … up from a piddling 1 billion things doing so now.”
Other sources suggest even greater connectivity – with some predicting 50 billion or more “things” talking to each other daily. That is seven times what the world’s population in 2020 is predicted to be (7.6 billion people, according to infoplease.com.)
That connectivity will be transformational. Everything will be in flux: industries, delivery systems, communications, smart data, products offered and not offered, risks, pricing, value-added services, insurance (healthcare, loss control, underwriting, risk management, safety, etc.), banking and education and even everything about how, what, where and why clients shop and buy.
When one thing is different, it’s change. When everything is different, it’s chaos.
The year 2020 will have chaos, and in chaos there’s great opportunity.
If my first few paragraphs have confused or upset you, don’t worry. We’ve already walked on the moon! Anything is possible. To do great things, you merely need a purpose and a vision, a commitment to both, a plan and the discipline to live the commitment you’ve made. Join us in this exciting five-year mission.
Let’s start at square one. As the American businessman and writer Max Depree notes: “The first role of the leader is to define reality.”
This article offers a simple process to follow through on Depree’s advice. Questions are asked, and you merely answer them – honestly and completely. Today you are establishing your starting point for your trip to tomorrow. Remember, if you misrepresent on the front end – you will not reach your planned destination.
This process will be simple. Some questions are included under each category below. This is an essay test. But it’s essential that you answer as truthfully and as completely as possible! Ask, ponder, challenge, reflect and ask again.
- What is your culture? In other words, what is tolerated? What are your house rules? As the leader, do you control and direct the culture, or does the culture dictate to you? Be honest.
- What is your reality – i.e., history; financials; SWOT analysis identifying your strengths, weaknesses, opportunities and threats; marketplace presence by way of customers served and carrier relationships; demographics and geography; viability (is yours a Rust Belt or Silicon Valley organization); etc.? Also consider where your world is heading.
- Is passion or pessimism the rule in your environment? Is your team passionate in what they do? Are clients passionate about what is being done and how you serve them? Do your team members see themselves as victims or victors? Is your team committed to the adventure called tomorrow – or are individuals looking to jump ship at the first opportunity?
- Are plans in place for the perpetuation of leadership, key roles, books of business, market niches, offerings, opportunities, relationships, technology, etc.?
- Are you low-tech (suicidal), medium-tech (terminal in the long run) or high-tech (viable and vital and the only acceptable option)?
- Is your team adaptable – willing and able to embrace technology, the virtual world, social media and innovation as it occurs? Do you have a balance of generations – Greatest, Boomer, X, Y and C – and the wisdom and perspective each can offer? Is there balance in your management and operations, or are you fragmented?
- Are you paperless, client-defined and -driven, connected, tech-committed and -focused, virtual and balanced in the new world of “Tech-Knowledge-Y”? Are you really?
- Are you “owned” by yesterday and its traditions – office buildings, eight hours at the desk, hierarchy, producer- and product-defined and -driven and based on seniority rules, that family is more important than performance, etc.? Be honest.
- Do you know your customers as individuals, in niches, as parts of an affinity group? Are you willing to serve them as a “niche of one?” Every consumer in 2020 has unlimited options!
- In your current system, do products and services dictate your focus? Or do the wants and needs of your clients and prospects dictate what products and services you offer?
- Are you structured based upon Peter Drucker’s 1993 concept of “price-driven costing?” (That is, determining what your customers think a service or product is worth and then designing it accordingly. ) Do you control or influence the price of what you sell? Can your clients afford your product offerings? Are you constantly striving to bring your cost down?
- As markets innovate and become more competitive, can you profitably deliver what you sell at a price the market is willing to pay? Do you block markets to protect your client or your agency? Do you and your clients have a conflict of interest in the world of “hard” and “soft” markets? Can you retain clients if your offering was quoted net of commission and you had to work on fees, not commissions? Be truthful.
- Do you know your clients – their wants, needs, values, expectations and fears? Or do you merely know their purchases? What is important to them? What is their risk-taking tolerance, and what are their available resources?
- Do you sell products/services/commodities? Or do you facilitate your clients’ buying what they want and need? Are you more focused on closing a transaction or creating a positive experience?
- Do you have a formal system of client-relationship management? Do you tailor solutions for clients’ problems, or are you merely the checkout counter once they find what they need? Can you anticipate their future needs?
- As an intermediary between your clients and the marketplace, do you stand closer to the client … or the carrier? Who “owns” you? Are you addicted to existing products, commission streams and delivery models? Or are you willing and able to take “the road less traveled” and find the future as it will be?
(Suggested reading – Unbundling the Corporation, by John Hagel III and Marc Stinger, Harvard Business Review, March-April 1999)
This brief inquiry was designed to create “chest pains,” because “chest pains” will often change behavior. This article is not intended to be an all-inclusive study but rather a reality test of your leadership. Are you willing to see your agency and the marketplace as it really is — or only as you want it to be?
If you don’t get the starting point right, the end game of Agency 2020 is impossible to target accurately. You can’t get there from here!
First, test your resolve, your commitment and your discipline. If these are real, go back and answer the above questions more honestly. Future articles will provide a process that will facilitate your “small steps,” or tactics, as well as the “giant leaps,” or strategies, so necessary for success.
Subsequent articles will cover:
- A process for discovery of 2020 as you project it to be
- How to maximize the efficiency and profitability of your agency today
- How to answer the one question that is all-important for each stakeholder: What’s in it for me?
- How to design a blueprint for your Agency 2020 initiative
- And how to facilitate the transition of all stakeholders from where they are today – to where they are willing and able to be (and must be) tomorrow – whether those stakeholders are inside or outside of your organization
Don’t panic or become discouraged. Remember, we’ve already walked on the moon!
Commit to 2020 – and be disciplined to your commitment! One day you’ll be ready to declare your purpose and vision – your organization’s leadership role and success in 2020!