An industry report on mergers and acquisitions activity landedon my desk recently. One sentence
caught my eye: “Since agency buyers evaluate deals and set pricingbased on projections of growth and profitability, valuations anddeal activity suffer when agency performance is weak.” Translated:Agency health creates the climate for M&A. Hard economies andsoft markets notwithstanding, agencies can boost their financialperformances by optimizing their internal performances. This meansfine-tuning everything that influences top-line growth, from howclearly leaders define and articulate their visions to howemployees work together. That's not to say producers should beoverlooked. Producers who counsel their clients, providing answersand applying ingenuity, will close more business and build trustand confidence. If “optimize” means to make something as good as itcan be, agencies should:

Pinpoint areas within the agency that either help orhinder sales. New business stems from vision, values,communication, collaboration, and many variables. You have to knowwhat's fueling success–and what's holding you back–before you cando something about it.

Invest time and energy into execution. It's notenough to identify obstacles to growth. Agency leaders needactionable ideas so they can make the adjustments for optimization.These ideas can take the form of a strategic plan or something lessformal, but they must have structure. And people across the agencymust own them if there's any hope for successful execution.Be obsessive about follow through. The bestathletes have follow through in their biomechanics; the same istrue for agencies. At the core of follow through is accountability;without it, optimization will crumble. Here's a secret aboutaccountability: It need not be purely punitive. Motivate yourpeople, celebrate their triumphs, and you'll see accountabilitysoar. While these methods optimize the agency for top-line growth,they also increase bottom-line growth. When you identify and act onall that could be improved within your agency, you are sure touncover ways to operate more profitably.

A very good thing, according to the publishers of the industryreport referenced earlier. After all, “projections of growth andprofitability” are the twin determinants of an agency's health andvalue.