There’s an old saying: “Revenue covers a lot of sins.” Of allthe sins it covers, leadership probably gets buried thedeepest.

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We’ve seen the headlines and stories of how a high-flyingorganization can come crashing down as a result of a lack ofleadership. The lack of leadership wasthere all along, but it was ignored; those with misalignedinterests refused to pull back the curtain and now it may be toolate for them.

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It’s not them, it’s you

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Enough about “them.” This is about “you.” And, by “you,” I meanthe typical independent agency. Lets make sure it doesn’t becometoo late for you as well.

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As I see it, here is how the typical agency comes to exist.

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A producer becomes successful and builds a largebook of business.

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— Said producer figures he or she can make more money ontheir own and starts a new agency.

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— They continue to build that book of business and hire acouple of account managers.

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— Eventually, they hire a few producers; most fail, but acouple survive and have marginal success.

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— The producer/owner wakes up one day and realizes theyhave actually built a business; a business they don’t really knowhow to run as a business.

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— But, the revenue pouring into their business covers uptheir lack of leadership, and by bottom line measurements, they aresuccessful — in spite of themselves.

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The financial reward for mediocrity in our industry has been waytoo high. It has built a false sense of security, resulted in veryfragile business models, and covered up a lack of leadership.

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It’s time to pull back the curtain

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The panic in the industry is reaching a fevered pitch. Manyfactors are contributing to this perfect storm: ACA, newcompetitors, technology demands, reducedcommissions, carrier selectivity, and the list seems to grow daily.It is that newfound difficulty in running an agency that isstarting to expose the lack of leadership. As referenced above, thelack of leadership in the typical agency has been there all along —it has simply been ignored.

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It can be ignored no longer.

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Because of what we do, we talk to agency owners every day. Itbecomes very apparent very quickly which ones will survive andwhich ones won’t. Their ultimate demise or survival has little todo with their current size, resources, profitability, or location.Instead, demise or survival has almost everything to do with theirlevel of self-awareness.

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Some won’t survive

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Those who are least likely to survive either spend their energyfocused on things they can’t control or are focused on things thatare too tactical. These are the agencies who:

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— Are hoarse from yelling at carriers for reducingcommissions and eliminating bonuses

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— Bitch about how unfair it is that new competitors have entered their space

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Are on a quixotic search for the nextproduct they must offer to their clients

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— Think some new/revised legislation will turn thingsaround

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— Believe that doing more of what they’ve always done isthe answer

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I genuinely fear for their future.

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Power of self-awareness

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But then we also get to have calls with a completely differenttone, reassuring us that, while the number of agencies/producerswill continue to shrink, the independent agency system has an evenstronger future than it does a past.

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I received a call from an agency owner who is definitelysuccessful from a growth/profitability standpoint, but he isgenuinely concerned for his ability to continue to be successful.He didn’t call to complain about any of the challenges above; hewas calling, he said, because, “I’m a great salesman, but I’m not agood manager or leader of people and I need help.”

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You know it when you see it

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Effective leadership is sort of like quality art; it’s hard todescribe, but you know it when you see it. While it may be hard todescribe, there are certain things that effective leaders ensureare in place.

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— Clear vision of the agency they must become

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— A documented plan of how to achieve that vision

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— Consistent communication with their team regarding thevision, plan, and progress

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— A healthy culture built on trust, accountability, andshared values

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— A value proposition that differentiates them from theircompetition

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An understanding of the ideal client towhom the value proposition is attractive

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— A marketing strategy to get the attention of those idealclients

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— Specific and measurable short-, mid-, and long-termgoals

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— Accountability for results from every role in theagency

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— Processes and procedures to ensure consistent execution(of everything)

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It’s kind of an intimidating list isn’t it? Of course, the needfor the items on this list isn’t anything new; it’s been there allalong. But revenue covers a lot of sins and the overly generousrevenue of our industry has often covered the “lack of leadership”sin. As revenue streams are drastically reduced, they are no longerproviding the cover they once did.

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It’s time to repent, brothers and sisters! Confess to your pastsins and commit to becoming an effective leader. For your ownbenefit, for that of your team, and for your clients.

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Can I get an amen?!

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