For The Manager: The skills an agency owner needs to be successful

I know many industry outsiders, as well as a plethora of company people, think agencies should hire pure managers, and that they do not need to have a sales background. The reality, though, is that sales are an agency's lifeblood. Consequently, management must both understand sales and be empathetic with producers-without being too empathetic, which many an agency owner is.
People who have never sold have a tendency to be too harsh with producers. Additionally, management must have the respect of the producers, and producers tend not to respect management that cannot sell. Finally, because things occasionally go wrong, it helps to have an owner who can step in and increase sales when revenues otherwise would go downhill.

The upshot is that agency owners, to be successful, need to have generated on their own-not been given or inherited-at least $300,000 in commissions. In larger agencies or those where the producers are more successful than average, the owner may need to show $500,000 or more in personal production. When considering owner candidates, I strongly encourage making these production minimums a requirement.

If an agency already has an owner(s) who no longer produces an adequate amount of commissions or otherwise is contributing inadequately, I strongly encourage the agency to investigate options for parting ways with the owner and use his or her compensation for more productive purposes. (Exceptions might include situations in which the owner's production is deliberately low for tax or perpetuation purposes.) Toward this end, all buy-sell agreements should contain some kind of minimum production requirement, so the agency can more easily eliminate dead weight.

[Italics on] Management contributions. [Italics off]An agency may find itself with an owner who is a better manager than producer, which could be a competitive advantage if the manager also produces at least $300,000 of commissions. Otherwise, the value of the management contribution is greatly diminished-again, because of the importance of sales to an agency.
Measuring management contribution is much more difficult than measuring production. Therefore, a job description is quite important for a managing owner, especially in partnerships where one person is a great producer and the other functions as the agency's manager. Quarterly meetings can help ensure that managing owners are fulfilling their roles. This may sound awfully formal, and maybe a few agencies don't have to go that far. But measuring managing owners against their job descriptions at regular intervals helps keep them on track and accountable, just as measuring commission growth does for the producing owner.

If management responsibilities are divided among the owners, then create job descriptions for each. For example, one owner could be in charge of the agency's financials, another of sales, and still another of the office. Then each should report to the others (or the agency's board of directors, if it has one) at least quarterly. Believe it or not, this process works even for the smallest agencies, and it goes a long way toward preventing hard feelings, which can arise if one owner feels he or she is contributing far more than the others, relative to the rewards each is getting. Once such feelings develop, it is hard to put the genie back in the bottle.

[Italics on] Leadership. [Italics off]Agency owners-all agency owners-have a leadership role to play. This role includes treating employees, clients, companies and peers with respect; attending agency meetings; and following through on commitments made to employees and partners. For example, if an agency owner sets up weekly sales meetings, he or she needs to be there every week on time.

Agency owners need to set examples. This means showing up for work on time and working a full eight hours every day. Insurance agencies just do not have a place for part-time owners. They also set a bad example. Most agencies are not so big that they can afford people who do not pull their weight. The staff understands this, and they understand the negative impact it has on them: Their workload is greater, and their raises may be smaller than they would be otherwise.
Showing up on time may sound like common sense, but a lack of punctuality seems to be a significant issue for some owners. They apparently feel their ownership status confers on them the privilege to set their own hours. Life does not work that way for a leader, and thinking so will always result in the agency achieving less than possible. A staff and even partners, however, will give more leeway on these issues the more the agency owner produces. So again, we are back to production.

[Italics on] Teamwork. [Italics off]Agency owners need to get along with and respect their partners. I have seen instances in which partners were not well-matched; but because they both brought recognized value to the agency, they worked professionally as a team. That is tough to do, and I greatly respect such owners.

I have also seen some fantastic examples of teamwork. To some extent, owners in such an agency were simply lucky to have found each other, but they usually put a lot of work into their team too. So an important job skill for an owner in an agency with multiple partners is the ability to be a team player-with the possible exception of the owner who is such a great salesperson that his or her production outweighs any delusions of grandeur, or any inability or unwillingness to play well with others.

[Italics on] Partners who are not pulling their own weight cause problems. [Italics off]Even if the agency's buy-sell agreement does not enable the other owners to force such a partner out, it is still important to address the issue somehow before too much resentment builds.

Those agency owners carrying most of the weight, however, should keep in mind the remote possibility that they are still better off with the underperforming partner than without. A number of rock bands, for example, are obviously carried by one star, who sometimes begins to think the others are not contributing enough relative to the division of the spoils. So they split off, and none of the members, including the star, ever achieves the same degree of success again. In some agencies, the workload is not always proportional to the rewards. But before breaking up the agency, consider carefully whether in some way the underperforming owner contributes enough to make the venture worthwhile. If so, focus on teamwork and try to get as much from each partner as possible.

An agency owner has a complex job, especially if he or she has partners. The more complex something is, the more likely it will eventually break. Simplify things in your office by clarifying what an agency owner is supposed to do and let everyone know. Create a standard of accountability-and then live up to it!