As an inveterate ‘car guy’, I take pride in my vehicles, and pay more attention to things automotive than is healthy. Back in the day, I devoured Road and Track as soon as the mailman dropped it off.
One article had such an impact on me that is has stuck for 20 years.
Two of the regular contributors were at a local road course watching the cars ripping laps, when a stranger in a new sports car drove up, got out of his car and started watching too.
After watching in silence for a while, the newcomer commented: “Man, I’d love to race. I just don’t have the budget or the time.” Not really a novel thought, right?
Unfortunately for him, his comments fell on sensitive ears. The response was:
“Hey man, budget racing isn’t that expensive. As a matter of fact, if you sold your wanna-be race car, you could be on the track next weekend.
“We all have the same amount of time. 24 x 7, 365. If you want to do something bad enough, you’ll find the time.”
Thoroughly embarrassed, the newcomer got into his fancy car and drove away. Hopefully, if racing was important enough to him, he did find the time and a way to fund his passion.
At the Crossroads.
Earlier this month, a link referred me to a blog post written by Kevin Trokey from Q-4 Intelligence titled An Open Letter to Independent Insurance and Benefit Agencies.
This post was one of the outcomes of a meeting between almost a dozen consultants in the insurance vertical.
The opening section is called An Industry in Crisis. Kevin sums up the state of the industry thusly:
“Profits are being attacked, growth is a struggle, future revenue streams are uncertain and the result is a level of panic not seen before.”
The next section delineates why Independent Insurance and Benefits Agencies are an Industry Worth Saving, but follows with a pointed condemnation of the underperforming agencies in the industry.
The meat of the article is then presented, with an exhortation to act now and avoid focusing on the external industry and economic drivers. The author believes that the real industry challenges are common and being ignored. Issues like:
- Carriers limiting the numbers of appointed agents
- Reduced and in some cases eliminated commissions
- Agency leadership efforts concentrated in production and less so on leading the business
- All summed up and as a root, a “lack of systems and processes.”
I was intrigued with much of the post. So current and timely. And then I saw the byline dated June of 2013!
Earlier this year, Ryan and I also reviewed the McKinsey report “Agents of the Future” on one of our podcasts. Four years after the original publication, that research has proven to be amazingly prescient as well.
Both of these works are over four years old, and yet things haven’t changed much.
My good friend Steve Anderson was one of the signatories to the Open Letter, so I called to get his take on the piece, and why we were four years down the road with no discernible progress. The funny thing was, his response was so similar to the comments of the Road and Track writers mentioned above.
Four Years On.
“Why haven’t most agencies moved to address their shortcomings? We all have the same amount of time, but it is a matter of priority. Adjusting what they do to work on one or more of these items isn’t a priority. In addition, in many cases, they are overwhelmed with the scope of the changes required.” said Anderson.
I’ll go one step further. It isn’t just agencies that aren’t stepping up. Far too many insurance companies are also ignoring the existential threats they face.
Of course there are notable exceptions. And if you’re a regular here at Agency Nation, you’re thinking about the necessary changes that will enable to continue to compete in a changing environment. But remember:
Thinking isn’t Doing.
You may recall my escalator analogy. If not, catch up now.
If each of us, TrustedChoice.com included, isn’t working at our limits to internalize and respond to all of the changes taking place, we’re moving backwards. And in a world where the most aggressive challengers are moving ever faster, that is direct track to irrelevance.
Rather than focusing on continuous incremental improvements, too many agencies, associations, companies and yes, even insurance technology organizations are taking their victory lap, even though the race isn’t close to being finished.
Why? Because we’ve seen this movie before. “These insuretechs don’t understand (take your pick):
- how complicated our industry is.”
- our customers don’t shop on the internet.”
- how much our customers value being able to walk in.”
- that our customers want to pay in cash.”
- nobody expects to get ahold of us on weekends.”
- how difficult it is to give great service the way we do.”
- IA carriers won’t work with an organization like them.”
“They’ll fail too.”
This time is different.
There are so MANY changes taking place in widely disparate areas of the ecosystem: consumer behaviors and expectations, personal and corporate technology, and the efforts of existing and new entrants to the industry.
Too often, I hear from agency and carrier personnel who say something along the lines of:
“Technology is moving so fast. How am I supposed to do A, B and C? I have to run my business. and don’t have time for all of those things.”
The unfortunate truth is that they should have completed implementing A three years ago and B two years ago. Leading insurance organizations are already piloting C.
The fact that they haven’t gotten it done means that they’ve been celebrating the win before the race is over.
Insurance Industry’s 24 Hours of Le Mans?
Unlike some Top Fuel drag races which are are all about speed and over in less than four seconds and a quarter mile, the 24 Hours of Le Mans runs for over 86,000 seconds and the most competitive cars travel the equivalent distance of over six Indy 500s (3000+ miles).
It isn’t highest speeds that win, but endurance over the entire 24 hours that make up the race.
Over the years, this has encouraged not only building robust cars, but also focusing on fuel efficiency. Time in the pits, either fixing mechanical problems, changing drivers or fueling up isn’t time on the track burning miles.
The winning team is the one that travels the farthest during the 24 hours, no matter the time of day, weather, or condition of the drivers, vehicle or team. Make no mistake about it, endurance racing is a team sport that tests all members to their limits.
Driving a car at the ragged edge of control is tiring to both body and mind. Most 24 Hours of Le Mans teams have three drivers. But they can have up to ten members of the pit crew; individuals who are just as vital to the effort as the driver.
The agencies, companies and technology companies that sit back and rest on their laurels are spending too much time in the pits, while our competitors, current or new entrants, continue to turn laps. We don’t all have to work 24 x 7, but just like the best race teams, performance is best when people specialize and there are backups for key positions.
Drivers Pilot; Pit Crews Fuel; Team Bosses Lead.
One of the key take-aways from the Open Letter cited above was that too frequently, agency leadership is focused on production. It makes perfect sense, revenue is the lifeblood of any business.
How successful would a race team be if the driver was responsible for hiring and training the pit crew, negotiating with sponsors and making sure that all cars, spares and personnel got to each race?
And yet, that is the model many agencies and some companies work under. This is because the leadership operates from their comfort zone.
In a static environment, replicating what we did in the past to be successful is a very effective strategy. However, when the environment is dynamic, maintaining course may not work as well.
As leaders in this great industry, it is incumbent on each of us to acknowledge the changes that are taking place are real, and that unlike the past, the threats aren’t going to take their licks and slink away. There are too many companies with dreams of becoming the insurance industry’s Unicorn.
You don’t have to be an expert in the new Customer Experience paradigm, nor do you need to be a technology wizard.
As a leader of your organization, you should:
- Learn about the new consumer expectations, technology capabilities and potential competitors to your organization
- Identify team members in your organization that have the skills necessary
- Hire additional individuals as required to address opportunities, replicate positions and provide backup
- Empower both mid-level management and rank and file employees to identify opportunities and take action
- Educate yourself and your producers and staff; attend conferences
- Invest in new sales and marketing methods
If you aren’t committed to doing each and every one of these items, you and your organization are becoming more irrelevant by the day.
Long Story Short
Top Fuel drag teams are highly specialized and race to win in an extremely competitive environment. So too, the Le Mans teams. And yet their disciplines are completely different.
Put a drag team into Le Mans, and increasing their 5,000 horsepower engine to 5,500 probably isn’t a winning strategy. 25 mph faster for 4 seconds doesn’t change the game.
Make no mistake about it. We are in an endurance race with any number of organizations that are competing for our customers. Redoubling our past efforts without understanding the new insurance environment isn’t a strategy to win.
We all have the same amount of time in every day and each month. If we want to have long term success, we have to start the hard work of remaining relevant to our insurance customers.
The time for celebrating in the pits is over. It’s time to start laying down lap after lap. This is an endurance race, and total distance wins.
Good Racing, Marty
P.S. If you’re serious about applying new strategies to make your organization more relevant in today’s changing insurance environment, give me a call. I’m excited to explore possibilities with you.