With the success of the Best Practices Study over the past decade or so, we all now have a very clear understanding of what "good" and "average" look like. Agency managers continually analyze and measure and quantify. These are all good efforts and all critical for gauging one's place in the agency universe and for measuring and tracking progress.

Here's a thought: The Best Practices metrics are helpful, but the difference between the good, the bad and the ugly agency can ultimately be summed up in a single word--people.

If you have an agency populated with mediocre employees, you have a mediocre agency. Do you have great people? Then you likely have a great agency.

In a nutshell, this was perhaps the single most important concept in perhaps the most important business book in a generation, "Good To Great," by Jim Collins: Get the right people on the bus, get the wrong people off the bus, and then leave it to the right people to drive the bus where it needs to go.

It never ceases to amaze me how unwilling many agency owners are to take this advice to heart.

I was asked by an agency owner a few years back to meet with a contentious 50-year-old producer who refused to be held to any new business goals whatsoever, and openly ridiculed the agency owner for trying to hold any of the producers to such an arbitrary standard.

After thinking how miserable and pointless that meeting was going to be, I asked the owner what he thought the realistic probability was that this troublesome producer could be "righted." He thoughtfully responded, "zero." Today, three years later, the producer is still there--still a thorn in the owner's side.

Do you have a problem employee who cannot be righted, despite your best efforts? What are you waiting for? Do you not see the impact your indecision is having on your organization?

A client of mine loves to tell the story of the day he fired a million-dollar producer who made life miserable for everyone who dealt with him. This producer (also a shareholder in the agency) seemed to take great joy in bullying his support staff, company underwriters and fellow employees.

But, with a million-dollar book, he felt bulletproof--and, for many years, he was.

After a particularly ugly exchange with a customer service representative, he was summoned to a meeting with his partners and given his walking papers. To this day, the agency president refers to this as one of the most satisfying days of his career, and the day the agency began becoming great.

For many years now, Roger Sitkins, one of this industry's most effective sales trainers, has encouraged producers to periodically "trade down" the smallest accounts in their books of business--that is, to replace the bottom 10 percent of accounts (typically very low in profitability and very high in hassles) with new business that tends to be much larger, more profitable and more fun.

Might not we do the same thing in our agencies with the bottom 10 percent of our employees? Can you imagine the impact replacing the bottom 10 percent with new hires would have on your agency?

Anyone come to mind in your agency who clearly needs to exit at the next bus stop?

What, then, about getting the right people on the bus? One of my partners is fond of asking agency principals: "Are you getting more than your fair share of the best talent available in your market?" This, more than any metric you might find, likely answers the question of whether or not you have a great agency.

For today, do this:

Forget the soft market, forget your loss ratios, forget the profitability of your small commercial department, forget the contingency mess, forget all the issues (the same issues that you'll be facing in a decade) and ask yourself this basic question: "Am I getting more than my fair share of the best talent available?"

If not, maybe you've got more pressing issues than your margins, markets or contingents.

A small number of clients come to mind (the great ones, really) who do not struggle to find the best talent available--it comes to them via their reputations as great places to work. We know an agency well whose mission is simply to become the best possible place of employment for insurance professionals--particularly producers.

They figure if they can do that, all the other "stuff" will take care of itself. It does. They are a great agency.

I see a lot of strategic plans that deal with all the typical issues that most strategic plans deal with. Wouldn't it be an interesting exercise to plan strategically around this one single question: "What can we do as an agency to become the greatest place to work in our community?"

However, be careful not to fall into the trap of thinking that creating a great place to work is primarily a question of compensation--it is not. Greatness speaks more so to a dynamic environment with excellent leadership, management, systems, markets and opportunities.

Create this kind of environment and you're likely to create a truly great agency.

Special Reports /

An Agency's Most Critical Metric Is Great Employees

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