Over the past 15 years, insurance agencies have experiencedinflation in two distinct forms. First is the tremendous exposuregrowth thanks to the booming U.S. economy. Agencies' salesincreased substantially because their commercial customers' salesand employee counts were increasing, and people everywhere werebuying bigger homes and new cars. Second, agencies alsoperiodically benefited from increasing rates. Collectively, thesefactors fueled huge increases in agency revenue and profit growth.True to John Kenneth Galbraith's quote, "Inflation does notlubricate trade but by rescuing traders from their errors ofoptimism or stupidity," these inflationary factors rescued theindustry. Inflation, like always, hid an ugly reality: manyagencies forgot how to sell.

Many agency owners fell into a peaceful, easy feeling that allwas well because revenues and commissions were growing. But thetruth is, these inflationary factors tricked many owners andproducers into believing they were much more successful growingtheir agencies than they really were. Many thought the expensivesales consulting programs they joined were actually working.

But the bubble has burst. Real organic commission growth todayis more difficult to achieve than possibly anytime in anyone'scurrent career. Between exposure declines and rate decreases,staying even can be a huge achievement. In some geographic areas,especially within certain industries in those geographic areas, notdeclining by 5 percent is a huge achievement.

For agency owners who choose to focus on building their agency,however, all is not doom and gloom. The first step to get out ofthe gloom is to remove the uncontrollable losses from the equation.When an agency loses business because its customers go out ofbusiness or because it lays off half its employees, the agencycannot control these factors--although the most innovative agenciesare taking steps to help their commercial clients improve theirbusinesses which simultaneously decreases the agency's own exposurelosses.

After removing these uncontrollable factors, how is the agencydoing? What is its retention rate on the remaining accounts? Howmany new, quality accounts are being written? If retention is goodand new account growth is good, all else being equal, the agency isgoing to be well positioned when the market rebounds. It's alwaysthe darkest before the dawn, and dawn is near for hardworkingagencies that have never lost focus on the essentials tosuccess.

This leads to the second step: Focus on the essentials tosuccess. Successful agencies must be adding new quality accounts.Even this may not stem commission declines in some locations, butif quality accounts are not being added, the result will besignificantly worse. On the other hand, if the agency focuses onincreasing the number of accounts, rather than only looking atcommission goals, when things turn around the agency will beperfectly positioned.

Focusing on account growth goals is an old, tried-and-trueprocess, yet most agencies today focus on commissions. This is akey metric for measuring true agency success. To track accounts,create categories by account quality, like "A, B and C," or"Platinum, Gold and Silver." Set new account and retention goals byproducer and by account type. If the agency focuses on sales inthis way, commission growth will take care of itself and successwill follow because the focus will be at the account level, whichis better aligned with the true heart of an agency. The focus willbe on sales, not dollars.

Most producers who actually do have goals have commission goals.But producers do not sell commissions. They sell to clients, oneclient at a time. By focusing on account growth, one account at atime, the goal and reality are better aligned. Even better, thefocus goes to the client and the client's welfare, and everyone inthe agency knows the effort is being made client by client. Moneygoals are not personal; account goals are. When we make the goalspersonal, client by client, the collective energy is much moresignificant.

Furthermore, when inflationary factors return, they will nottrick agency management. Measuring success by account growth givesa truer picture of the agency's actual success. To top it off,younger producers will especially benefit from this personalized,integrated goal focus. This is a simple approach. No extra moneymust be spent. Combine this approach with your current salesstrategy if possible, and add in your value-added services.

Another essential to success is strong leadership. As I'vementioned before, the most critical key to strong leadership is tohold producers personally accountable, on a daily basis, forachieving their goals. Many agency owners keep hoping theirproducers will finally catch on and do it themselves. They keephoping that since the producers are grown up, they'll fixthemselves. But it doesn't work that way.

Think about this. Athletes are paid millions of dollars annuallyto play games, and every single player has at least one, if not ahalf-dozen, coaches to train, motivate, measure and hold themaccountable. If someone at that level is not adequately motivatedby millions of dollars to play a game, why expect producers to holdthemselves 100 percent accountable to achieve your goals, when theyalready may be achieving their goals?

If an agency is to build organic sales, producers must be heldaccountable daily for prospecting, following agency procedures,training, learning and selling. In many agencies, accountabilitysimply does not exist. At most, some goals are set--but then what?What accountability do the producers have for daily prospecting?Following agency procedures? Training? And, of course, selling?What are the consequences if they fail in any area? Accountabilitycannot exist without consequences. This is where real leadersdistinguish themselves. If you don't know where to start, startwith one small step and see where it leads. The opportunity is ripefor those willing to step up and lead.

The veil of inflation has lifted. To thrive today, adjustmentsto the new market environment are required. Work on changing whatyou can control. Focus your agency on account growth and showleadership by making people accountable. The results will bepowerful.