Tag Archives: agency

6 Tips on Recruiting Analytical Talent

The well-trailed difficulties in recruiting data scientists or other analytical roles, followed by the equivalent challenge in retaining them long enough to recoup your investment, have been likened to “talent wars.”

There are hotspots around the UK, but it seems all areas to some extent share this experience. London is perhaps the most challenging place to retain your talent. In my own experience, it has been easier to recruit in South Wales and Bristol (the latter being particularly good for having a pool of analytical talent), while much harder in Bournemouth and Edinburgh, for example. Several factors can improve your odds, including how you advertise, whether or not you use an agency and especially how clearly you explain the role.

Here are six tips:

Role description

Providing clarity on the role and what you expect from candidates is harder than it sounds in this sector. So many terms that you might use (like “analysis,” “insight,” “intelligence,” “data,” “modeling,” “reports,” “presentation,” etc) are open to interpretation, and some very poorly skilled candidates use this language to describe what they can do. For this reason, I recommend avoiding technical jargon as much as possible (apart from specifying any exact software in which you require expertise). Seek to describe the role in terms of the outputs you require the person to be capable of delivering. For example, do you want a candidate who can produce analytical reports or someone who can influence marketing leaders and present information that is sufficiently persuasive to change strategy or guide design of a new campaign or product.

Advertising and Agencies

Advertising your role is another conundrum for the would-be hiring manager. Given the high fees charged by some recruitment agencies, for little visible effort, it’s not surprising to see the growth of companies investing in their own recruitment portals and greater use of LinkedIn by recruiting managers. The latter approach has the advantage, for well-connected professionals, of both tapping into their existing networks and approaching those who both understand the language they use and may be best placed to know analysts ready for a move. However, the novelty factor has now worn off, and with so many recruitment consultants also bombarding LinkedIn users it is harder and harder to get your message across.

I would certainly encourage use of your own company advertising (to tap into fans of your brand) and LinkedIn as a first step. However, despite all the charlatans in the industry, I have still seen real benefit from specialist agencies that genuinely know this market. Having recruited analysts for more than a decade now, I’ve found these informed specialist recruitment agencies few and far between and those I trust to be even rarer. However, among this rare breed, I am happy to recommend MBN recruitment. The firm always understood my brief and provided viable appropriate candidates as well as pragmatic advice on salary and approach to wooing the undecided.

Motivating and Retaining

As all insight leaders will be only too well aware, even though finding the right analytical talent in the first place is challenging, it can be even harder to keep them motivated, engaged and ultimately retain them long enough to see their potential realized and value added to the business. Every journey starts with a single step, as the Chinese proverb goes, and it is really important to start well. For anyone who has not yet read it, taking the approach recommended in “The First 90 Days” can be a recipe for any new hire (especially at a more senior level) to hit the ground running and make the right first impression.

On-Boarding Coaching

I’m also conscious that leaders of insight teams are even harder to find, so many organizations are needing to appoint, to the growing number of these roles, candidates with strong generic competencies but little or no experience of customer insight. Coaching at Work magazine recently published an article on on-boarding coaching and its growing popularity. Laughlin Consultancy can see a need for trained executive coaches with a background in customer insight leadership to help support this population to be as effective as possible through their first 90 days and so are providing that service.

Performance Management

Continuing motivation and engagement of analysts could be a blog post topic (if not a book) in its own right, but for now suffice to say that there is a natural tendency for this population to be more cynical. Marshall Goldsmith described most performance management systems as an occupational hazard at best, and there is a need to flex the company policy to better work for these skilled people. I was struck when reading “Punished by Rewards” as to the importance of not relying on bonuses or internal recognition systems to bribe them to work hard or give a high score in the next engagement survey – rather being genuinely interested in the work that they do and reclaiming the essential importance and nobility of that craft. For performance reviews, I would also recommend taking the approach recommended by Nancy Kline.

Competencies and Career Paths

One final recommendation, to achieve motivated and retained capable analysts, is to invest in a clear career path for them. People, especially analytical people, want to understand clearly how their skills match up to the ideals for each role and potential routes for their development if they can improve and “up-skill.” I have seen skilled analysts become very motivated by simply having clearly documented competencies for different technical roles and seniority within them. When you add to this clarity as to potential career routes through that matrix, it can lead to conversations and planning that result in those analysts staying for many years not just months.

I hope those tips are helpful to you. Please do share what has worked for you, too.

The Dangers of Public Segmentations

Recently, it seems that developing public segmentations of your customers or citizens and then sharing it for all to see is becoming fashionable.

In part, this is to be applauded and welcomed.,/p>

The trend highlights a key tool within the customer insight toolkit, encourages greater focus on understanding people and embraces the need for greater transparency. However, there is also an inherent risk, that readers fail to understand the purpose, design and limitations of such segmentations and thus unwittingly apply them where they will not help.

This reminds me of a time many years ago when psychometric segmentations were very popular in business circles. Myers Briggs (MBTI) and many other profiles were enthusiastically applied and team members categorized into their “type.” Sadly, all too often, this perception about some important differences between team members was filed away following the team-building exercise and never used again. Screening interview candidates via psychometric segments was also “flavor of the month” at one stage, although I hear it being much more rarely used now (or only as part of a mix of “facts” to be considered).

Perhaps part of the problem can be a misunderstanding of the role of segmentation. As posted previously, segmentation is just one of a number of statistical tools available, and each segmentation will be designed to achieve a particular purpose. For this reason, more than one segmentation of customers may be entirely appropriate and insightful for a business that is able to handle such complexity (though most business leaders dislike this idea).

But let’s return to reviewing some of those recently published public segmentations. The first one I want to consider is the Consumer Spotlight segmentation published by the FCA.

While this appears a useful segmentation to help the FCA understand and focus on more vulnerable segmentation with regard to financial understanding or access, it is also important to recognize its limitations. A 10-segment model will only ever be appropriate for understand macro attitudes and behaviors. My own experience of segmenting consumers within different product markets tells me that both attitudes and behaviors can vary widely once you drill down to specific needs or products. So, it’s important to realize that this segmentation has been designed to focus on dimensions like vulnerability, detriment and financial risk. Thus it is most relevant for the FCA itself, to help target communications.

A second example is a commercial business taking such a public approach to sharing a segmentation. It is the Centre for the Modern Family segmentation funded by Scottish Widows.

This is another interesting segmentation, as it seeks to highlight and track changing social attitudes, family structures and pressures on modern families of many different types. However, once again it is important to realize the limitations of this survey. It is an attitudinal segmentation, constructed from a combination of “qual and quant” survey results, interpreted by an expert panel drawn from academia, social care and commerce. As such, this is a subjective perspective evidenced by self-reported attitudes and behaviors. Although such an understanding can be very rich, the inability to overlay this segmentation onto customer databases means that actual behavior cannot be verified or targeted actions or communications executed (often a drawback of attitudinal segments).

My final example is from the UK government. There are two I could have chosen here, as they have also recently published a segmentation on “climate change and transport choices,” but I’ve chosen to highlight the segmentation exercise published in regard to the problem of digital exclusion.

Once again, it’s encouraging to see this segmentation exercise being undertaken and the transparency regarding approach and progress. However, it does also appear to run the risk of a number of other “hybrid segmentations.” That is the risk that certain differences highlighted in various research studies or other sources are “cherry picked” to construct a patchwork quilt of apparently rich understanding that is not evidenced on a consistent basis. This can be seen in the infographic embedded in the above article. Even constructing a behavioral/demographic framework for a segmentation on that basis and then consistently surveying each segment runs the risk of masking important differences because of the averaging effect of artificially constructed segments. It will be interesting to see how government advisers and agencies avoid those risks.

I hope you found that interesting and are also engaged with the level of focus on segmentation in today’s government and media. If these are approached carefully and interpreted appropriately, they should be another driver of greater influence and seniority for customer insight leaders. That is our cause celebre.

Agencies: Grow Sales AND Develop Staff

You’ve done the hard part building a successful insurance agency. But production has plateaued. So you focus on growth and spend less time in the office. This prevents you from overseeing your staff, and you begin to worry about what’s happening back at the office.

It’s the biggest challenge owners of agencies face. How do I drive growth and lead my organization?

Solve it by implementing these three steps:

  1.  Focus on what you do well. You can’t do everything, so don’t!  Focus on tasks that add the most value. Most people, when they first assume a management role, want to make all the decisions. It’s a management style called “command and control.” In today’s flat organizations, it doesn’t work. The business world moves too quickly for employees to wait to be told what to do. Successful organizations hire the right people and divide up roles and responsibilities to maximize each individual employee’s contribution. It applies to the agency owner, as well. You need to identify what you do best and focus on that task.
  2. Empower your employees to act. It’s your job as the organization’s leader to create an atmosphere that fosters initiative over order taking. Make sure your employees understand that you will stand by their decisions. Don’t be quick to correct the way they are doing something if the method they use solves the problem. The more you micro-manage, the more you send the message to an employee that you don’t expect her to make a decision. Move responsibility down to the lowest level in your organization. Your front-line employees know what’s going on. Give them the power to solve the problems facing your organization and get out of the way.
  3. Be patient. It’s natural to try to solve a problem or issue you see at the office. Hold back. Wait. Allow your staff to figure out the solution. It’s not easy….especially when you watch someone make a mistake. But over time what you will discover is that an employee will own a specific task she feels responsible for.

Well-run companies don’t depend on one individual. They institutionalize employee development enabling knowledge transfer among the existing work force. At many organizations, managers are required to develop their replacement and can’t get promoted until their designated successor is deemed ready. In other words, part of their job is to make themselves redundant.

Analyze what you do daily. Ask yourself what part of your daily tasks you could transfer to someone else in the agency. Then spend the time training your staff to assume your additional tasks.

This will free you to focus on the most important business issues affecting the agency. Inspire your people to be great!

6 Excuses Why Your Agency Didn’t Grow

It’s a brand new year. I hope last year’s numbers were where you wanted them to be: solid growth, increased revenue and expenses under control.

But for those agencies that didn’t add to their book, there’s always an excuse or six. It’s easy to rationalize why things didn’t go your way. Of course, sometimes, it really isn’t your fault; maybe you lost a major account for reasons beyond your control.

This column highlights a half-dozen common excuses and suggests ways to slap them down.

No time to sell. No producer ever has enough time to sell; yet it’s their most valuable commodity. There are innumerable ways to gain more selling time, including: wiser time management; more selective prospecting and quoting; using instant digital communications; shifting small, no-growth accounts to a skilled in-house agent or a less busy outside producer. Enact these approaches, and others, to extend the clock in your favor.

Not enough commercial prospects. Be preemptive. Work mainly with new business leads that align with your personal interests, plus pricing and underwriting strengths. Count the approximate number of prospects within each niche you want to target, and broadly pre-qualify them, before doing any actual solicitation. If you don’t, your sales results may not be adequate to offset your time and marketing expenses.

Our personal lines rates are too high. Competing head-to-head with direct marketing carriers isn’t entirely about price. Professional advice, a local presence, smart proposals, regular communications/reviews, plus a competitive premium, all generate appealing value. Besides, rates are fluid; they go up and down, relative to the competition. Focus on the elements that are within your agency’s control instead of lamenting about what is not.

No one has heard of our companies. If you tout your leading carrier as your agency’s brand, you are making your job harder than necessary. You are not your carrier. Besides, agency carriers never advertise as much as direct and captive-agent companies. Instead, concentrate on building your own brand through social media and traditional means. Adequately market and sell your agency, and people will buy from you — not the underwriting carrier.

Inadequate sales training. You can’t expect serious sales from unskilled salespeople. So, provide continuous sales training to every producer and front office staffer. To help, there are state association-sponsored programs such as the American Insurance Marketing and Sales (AIMS) Society’s CPIA designation for producers, plus a variety of sales training sources for in-house client reps. There are also independent vendors with worthwhile training tools (including my own Agency Ideas resources).

Too many rivals. Endless rivals, on all levels, challenge today’s independent agencies. Retailers, banks, captive and direct marketers, traditional competitors and more are all shooting for your business. Plus, the digital universe reduces the barriers of entry to anyone with an insurance license, a website/app and a willing policy writer. It can seem like you against the world. Don’t use this as an excuse. Instead, think of it as a clarion call to stop being a generic office and start being different — in terms of both marketing and sales.

Are excuses that important? 

As Jeff Goldblum’s character Michael famously said in The Big Chill, “I don’t know anyone who could get through the day without two or three juicy rationalizations. They’re more important than sex. . . . Ever gone a week without a rationalization?”

Excuses are normal, everyday occurrences. It’s common to imagine them. Just don’t let them interfere with the growth of your agency. Let your endless competitors get lost in the rationalization maze instead.

This article first appeared in Insurance Journal

A Bizarre but Common Strategy: Hiring Incompetent Producers

Hiring incompetent producers is apparently the strategy of a group of agency owners who told me that my advice that no producer is better than a bad producer was:

  1. Just wrong
  2. Too harsh
  3. Short-sighted

I have seen some consultants make the same case, so I thought I should have an open mind and reconsider my position.

The consultants’ point was that every commission dollar sold is worth (pick a multiple) 1.3 or 1.5 or 2.0 times. That makes every commission dollar a commodity. From the agency owners’ perspective, one way to build value is to put as many commission dollars on the books as possible because the value is same regardless of whether the sales are profitable or unprofitable. The value is not affected by whether the sales are personal lines or commercial, whether the accounts carry more or less E&O risk. All sales carry the same value, in this perspective.

Some people will argue I have taken the consultants’ and agency owners’ point too far, but that is impossible. Remember, their point was that poor producers, meaning unprofitable producers, still have enough value to justify keeping them. This means that even if the producers’ sales have a negative 20% profit margin, which is common, the consultants and agency owners believe these sales have the same effective value as books of business with a 20% profit margin.

The strategy of adding sales without regard to profitability is quite relevant if the agency can grow fast enough and sell itself quickly enough. More than one such flip has made an agency owner wealthy. The key is how long the producer is with the agency before the sale. Let’s say that at the end of five years a producer has generated $150,000 of commissions. The profit on this book is (using industry standards for agencies with $1 million to $2 million in revenue):

incompetent

 

This excludes all administrative wages such as the bookkeeper, receptionist, claims and so forth. It excludes ANY owner compensation. It understates the CSR compensation, too, because the average commercial CSR makes much more than $35,000. If we include these real additional expenses proportionately, this book likely is still losing money in the fifth year, anywhere from $10,000 to $30,000. Losses in the prior years were even greater as the book was built.

Over five years, then, the agency has likely lost between $75,000 and $150,000 net. Using $75,000 and a one-times multiple and an agency sale in year five, the agency still nets $75,000 (($150,000 times 1.0) – $75,000) = $75,000.

But if the agency hangs on too long or the five-year loss is too great, this strategy fizzles. So to make this work financially, the agency owner has to have a firm and fast exit plan.

Why not hire quality producers initially? Then the agency gets profit and value simultaneously. Besides, who in their right mind would pay the same multiple for an unprofitable book as for a profitable book? Let’s use an EBITDA example. If the profit is $25,000 and the EBITDA multiple is six, then the value is $150,000. What is the value of a book with a loss of $25,000 and a multiple of six times?

Why would someone pay the same multiple for a low-profit book as for a high-profit book? Maybe the thought is that books all average out. But why do they have to average out?

A poor producer cannot take an entire book, even most of a book, with him if fired. If the producers were so good, they would not have been fired. So agency owners can eliminate unprofitable producers and reassign their books to staff or other producers at lower commission rates, which is common when books are transferred between producers. This is a key secret to the success some serial acquirers have achieved. They completely understand that poor producers are unnecessary so when they buy, they fire and they keep the business but make it profitable. Even if 20% is lost, that is 20% losing money vs. 80% making money.

I truly feel for agency owners struggling to find quality producers. If it was easy, everyone would do it. Is hiring poor producers really the solution, though?

My experience, and I’ve seen the hard data, is that when agency owners properly prepare their agencies for finding quality producers, use the right interviewing tools and tests and create a quality development/management plan, successful hire percentages quadruple. All the work — and it is a lot of work —  is before the hire, and, given all that agency owners already have to do, finding the time and energy for this key element is not so easy, but it is essential if the goal is to truly build profit and value.