Episode 313: Your Agency Is Successful... and Stuck

Another amazing week of multiple conversations with independent insurance agency owners and where they are in the industry and where they are within their market. And from the outside, many of them look extremely successful. And then when they chat with us, we find out that they're extremely stuck. Welcome to the Scaling Your Insurance Agency podcast. I'm Daniel Metcalf, along with my co-host Mike Stromso. And today Mike and I are chatting about your agency is successful and stuck. So, Mike, I want to start it off this week by talking about how can an agency look successful from the outside, but then actually be stuck once we get a further look on the inside.

Well, the thing that the independent insurance agency industry lends to itself is when an agency starts growing, they get to a million in revenue, they get to two million in revenue, and there may be people out there that are less than that, but it's the same thought process. The commissions continue to be deposited every single month. Sometimes whether you do anything or not, right? So, you know, there's that level of comfort. But but I think everybody wants to grow. They want to continue to prosper, they want to get better, they want to get bigger, and they want to get to the next level. And that's fantastic. And I know, Daniel, that's why you and I both get out of bed to help them do that.

Every day. Yep, absolutely.

So you know the commissions keep getting deposited every month and things keep rolling along, but you know, they also wake up and sort of thinking as they're having their coffee, dang, I just don't feel like we can get over that hump. And I remember, I remember when I was having my coffee and had that same thought until I got to the point where I encountered somebody and I said, Wow, this is an opportunity. And that's the other thing we were just talking about, Daniel. The industry is full and ripe with opportunity, right?

Yeah, I mean, when we look at the inside with the with the agency owners, when they're saying that they're stuck, it isn't due to a lack of opportunity. Right. Right? It is not due to lack of opportunity. We're seeing that headlong. It's in the way that they've designed their agency for the best of their abilities as hitting that ceiling based on the design.

Right. Right. Right. Um and so, yeah, that's what I was getting to back in the day, you know, when I started, my big takeaway from those days, it's always better to listen to somebody else who knows how to take you there than to try to do it yourself. And once I started listening to other people who knew more than I did about a given subject, that's when it all changed for me. Daniel, shall I say, I got out of my own way.

Sure.

And I allowed uh the redesign of my agency to unfold before me. And I started identifying the things that I needed to do, that I needed to, you know, make a decision on. Yes, we're gonna do this. Yes, I'm, you know, I'm gonna authorize that. We're gonna invest here, we're gonna invest there. But once I started doing that, everything began to change. So that's kind of what we encounter with a lot of agents that we're working with, is they may be at that point, but they, I don't know, is paralysis analysis a good term?

Well, maybe. I mean, yes, there's some analysis, paralysis. I think most of it is that they're just working harder than ever. And yeah, you know, they're still feeling, you know, they're still, you know, they're working hard as ever, they're trying to build out a leadership team, they're trying to find different systems, and so it's not like they're lacking in any motivation or time or you know, or access to technology by any standpoint. It it's just more of less of how do you free yourself up to say this is where the design has to stop. I've hit a ceiling, doing it the same way over and over again is not gonna help me scale. How you know, what's a different way of looking at this, right? It really becomes that inflection point.

Yeah, absolutely. And and it's about you know, the redesign also includes, you know, maybe updating our identity on who we are as an organization, because you know, in scaling, the difference between growth and scaling, growth is linear, sure, and it's doing the same thing over and over and over again that we've done for X number of years, last five, ten, fifteen, twenty years, versus scale is identifying this is where we want to be in the future. This is our our BHEG, if you will, or our big goal in the future, and it's operating within the context of that goal now in the present, right?

So that's what we deserve. Yeah, how do you look at yourself in the future and say, hey, I'm at two million now or three million now, and I want to be at 10 million in the next you know 18 to 36 months. You know, that that is a certain mindset, right? That is the leadership mindset that if you truly want to scale, is it isn't just the linear part as you're as you're stating. And and we've we've recognized that with some of the agencies we've been talking to. Like, they truly don't want to scale. They're like, oh, that's that that's that's gonna take a whole different shift. That's gonna take a an extremely different way of looking at things. I just was hoping that there was an easier way for me to get from two million to three million over, say, the next 18 months or 36 months, right? Um, and that there was some kind of magic bowl where I could do that for say 10 hours less a week or 20 hours less a week or whatever it might be. And and there's plenty of opportunities to do that, but when we're truly talking about scale and what we have in front of us, you know, people are gonna start getting annoyed with us, right, Mike, of the for the first time in human history, we finally have a tool set, right? We finally have a tool set in artificial intelligence, um, agentix right around the corner, if not here already, uh, automation that can help scale to those levels if you're willing to take the journey.

Yeah. And technology, that technology and the automation powered by AI, allowing it. And that's part of our redesign identity.

Okay.

From a leadership perspective, most importantly, and that's why we're, you know, love working with leaders talking through this process and leadership teams talking through this process, because that new identity is we're going to allow the technology automation powered by AI to do the work of machines so humans can get back to doing the work of humans, which is building the trust, continuing to build the depth of you know, trusting human relationships and and all that humans, only humans can do, right?

Right.

Right.

So that that redesign is part of that is the new identity and the new way of doing things in our agency. Yes, we've done it like this before, but that's okay. Now we're gonna take a step into the future. And, you know, there's always two options, right, Daniel? We can do things the way we've always done and stay where we're at now and stay stuck, like you said, and that's that's okay. If that's the choice, that's the choice. Or we can look at maybe a different way of thinking about things, about leading our teams in a different way, and leading and coaching them to the new way of thinking into the future, which is really designed, like you said, to free up their time, to give them back, you know, five, ten hours a week. Instead of, you know, an agency that we were talking to recently had a department where you know one of the team members said, I just want to go home at five o'clock and not think about all the stuff that's undone on my desk. Remember that one?

Yes. We hear that more than once. That that is not the first time we've heard that from their um team members. Absolutely. Absolutely. So let's let's let's break this down for everyone real quick, right? So, okay, I'm an agency, I want to scale, I've been doing the same amount, we're somewhere close, growing five, 10% every year, or somewhere like that. But you know, um, I I know I'm successful, but I want to take it to the next level. What is the what is the the leadership shift that has to change?

Well, the leadership shift is is the redesign is identifying all of the things that the human side of the capacity are going to do, and identifying all of the things in the agency that the machines are going to do, that the automation technology powered by AI is going to do. And we have to get comfortable allowing it to do so to free up our time so we can get back to building those relationships. And what we encounter, you know, in the executive and leadership coaching levels is that independent insurance agents, they have a servant's heart to begin with. And their greatest desire, back to Maslov's hierarchy of needs, right? Their greatest desire is to serve others in the way that they want to be served. Okay. And so they they sometimes think, well, you know, I'm gonna let go of this, I'm gonna allow the automation and technology to do this, is gonna get done right. You know, and so it's having trust and confidence in the leadership team and trusting the process. I think that's that's an important thing right there, Daniel. And and I I know that's easily said and maybe sometimes not easily done, but trust the process and trust those who are creating the process and implementing the process. And I think one of the most important things is, and we've talked about this a lot, over-communication, right? So so vitally important. I mean, you've got to you know learn to over-communicate what's going on so everybody has that understanding and training.

All right, so let me try to still it down from what from what I heard. So the so the first step really is getting that layer leadership mindset that we need to design an agency intentionally where we start to where we start to figure out how the work is going to happen. You know, how are we going to be able to bring on new customers? What are the new customers we're going to bring on? Where's the revenue gonna come from? How do we get the most profitable revenue? What are some of the things that we're gonna stop doing? What are some of the things we're gonna start doing? What you know, and when we write this all down and figure this all out, then we have to start to identify the next step. Is now we're gonna identify where are the where are the items within this new way of we're going to do things where scaling is the goal, not just um growing, and identifying where are the places that the humans are going to work and where are the places that the machines are gonna work, and then how do we bring them together at the end so that they're all working towards that same scaling mindset, toward that same scaling process, same scales. So that comes down to things like we've talked about before, Mike, right? Gotta come up with your niche, right? Gotta find out, gotta come up with your niche that you can be the best at in the entire world compared to your competitors at that particular time. And have we maxed out all of that niche? And that niche can be in personal lines, commercial lines, does your you know, uh health, could be benefits, life, it doesn't matter, right? It it's more or less about what you can be uniquely great at in this specific area. Um then it's looking at how can we make our ability to collect, store, analyze, and move data as quickly and as efficiently and as revenue impact as possible in order to best serve our clients, both our current and our new and our and our niche. And then from there, how do we find the right A players who are going to help us do those first two areas, right? And are willing and able to work with technology and open to using this new toolkit that they have right that's available to them to the best of its ability and embracing it. Those three by itself is what the leadership design and mindset has to look at if you're going to scale.

How work happens, right?

How work happens, correct? Because our jobs in the independent insurance agency space is to help other people prepare themselves and protect them from financial loss, right? From from those, from those um uh different types of ways that we can be affected as humans, right? We can be affected where we will have some type of financial catastrophe. That's what insurance is for. And it's our job to make sure that we set set our clients up for success, that they will not have a financial calamity because they have this insurance product that will keep them from doing that, right? So, how do we set up our work to be able to be more human with them so we can spend more time with them, so that we can be the best uh analyzers as possible for them and represent them as great as possible when there's something does come up. That is where that is what a scaling agency is going to look like, where then the machines do all the work that are necessary to move the data from one place to the other, um, do the repetitive tasks, make sure the calendar is set up correctly, make sure we can analyze and identify areas of um missing uh uh protections, right? Of oh, you know, hey, this is information that's not accurate or correct, or all these other things that would take us a lot of time away from our clients, we can use those tools to be able to help us quick be faster, more efficient, drive drive more revenue impact for both ourselves and our clients, actually.

100%. And the thing about I was sharing with a group of agents just this morning about the fact that you know insurance is a mystery still to the consumer marketplace, whether it be personal or professional. And so that's where the critical importance of those human relationships will always come into play.

Right.

Because people need to make decisions, they need to make judgment calls as about as how they're going to invest in their insurance, et cetera, et cetera. So it's critically important that people be free to be able to make those decisions. But you know, one of the things that I heard you talking about, Daniel, it feels like you know, people are busy, people are busy, they've got so much going on, but the results are not something that they really have time to focus on. Because, you know, everything's so full. I mean, calendars, inboxes, meetings, etc. So clarity. Clarity is so vitally important.

Yes, clarity is very important. Um where do you think the agency owners are lacking in clarity?

How work gets done, and then showing them and helping them understand what the future design of the agency looks like into the future, so that every team member, I mean, picture an organizational chart as an example, right? And you've got certain people in certain places, you have your leadership team, you have a leadership position over sales, a leadership position over service, you got somebody who's the marketing CMO, chief marketing officer. You've got, you know, maybe a director of welcome as an example who's banning the phones, et cetera. And then you've got people in certain positions from a sales role to a service role to a processor role. And then I would put another box on that org chart, which is AI and automation, right? They have a contributing piece to how the work gets done. But when you show that to your team and then help them understand how it's actually going to work. And that it will work, and that the things that they need to do to serve people, meaning their clients, their prospects, and community members, in the best way, then they'll go, huh. Now I see it from a visual perspective, right?

Okay. Um, I go back to from a clarity standpoint on the ability to measure outcomes rather than effort. Um many agencies we've talked to recently just don't have don't have the clarity in their numbers, not from um yeah, they have clarity in numbers, they have an idea of like, you know, how much new premium they want to add, you know, how much you know, how much more revenue they want to add. Um they have they have some ideas of kind of where where they are from a retention standpoint or the number of policies, those are things that are easy to to look for like from the past. Where I think the biggest shift and mind shift that needs to come from clarity standpoint is on measuring outcomes from a predictive analysis standpoint of hey, our our cross-sell rate right now is X. Um what would it look like if we moved it to Y, right? What if we doubled our cross-selling efforts? Um what if we what if we doubled our cross-selling outcomes? What what would that look like over the next six to nine months? Could we service all of it, right? Could we um do we have the right markets? Do we have the do we have the right if we were able to do it? Using that pre that's also a form of clarity that we have to look at is how do we measure those outcomes? Um because too many times we just look at maybe the premium number or the you know what what that might look like instead of well, where's the profitable revenue coming from? Where's the um where's my ability to to invest in, you know, a couple of different areas, and I'm gonna get the greatest return on investment? And looking at those proactive. I mean, I think the the reactive world of in an independent insurance agencies right now is a dangerous place to be in if you really want to scale.

Yeah. Well, and what you just said, that's great, great feedback, Daniel. Stop measuring effort and start measuring outcomes. And that leads me to think about uh an independent insurance agency that we're privileged to uh serve and work with, having a conversation last week about the two words for this year, the two words for this year in that agency is revenue generation. Because they have shifted their thinking within the agency, within their culture. They've taken on the stance, and I know you're also working with them. Thank you, Daniel, for contributing to their outcomes, right? And so, because of everything that's happened, uh, the owner said, we have more revenue right now than we've ever had, and we're in such a good position. I said, good. The foundation's been refreshed and updated. We have clarity, revenue generation. It's time for the outcome. And so we're looking at the rev revenue generation pockets, and that's where the clarity of something like a dashboard, right, comes into play. Yes. You can see. And so that's that's kind of a combination. And the thing that made me so happy a couple of minutes ago when I was listening to you, Daniel, is the balance within a team. And so your thinking is along the lines of you know, technology automation powered by AI. My thinking is along the lines of the people portion and making sure the technology and the humans play well together for the outcomes.

Right. And that's what makes a good team, right? That's where that's that's where we're that's where we're coaching the the agency owners and leadership teams of those agencies to look at it from that standpoint. How do we get the people, right? The people's mindset, how do we get the culture? How do we build around this? And then what are the right tools and um tools and technology in place that we can those efforts go? And by combining the two together, that's we're going to get the greatest return.

All right. Hey, let me throw something in, just uh maybe out of left field a little bit, but it's exactly along the lines of redesign. Uh, we have not one, but two agencies who have taken one of their uh lead producers and they made a an intentional decision, you're talking about that earlier, an intentional decision to move that person to commercial insurance, which is a great strategy, by the way. If you've got somebody who's currently well versed in personal insurance and they can explain liabilities, you know, liability is the uh the ability to protect and you know, liability insurance protects and defends people for everything they're obligated to pay for because of, right? So if they can explain that to a consumer, they can easily make that shift. And a couple of agency leaders have intentionally decided to shift a high-performing producer from personal to commercial insurance. And so what I was thinking about in that realm is back to redesign. And we keep our finger on the pulse of the industry a lot, right, Daniel?

We do.

Yeah, so anyway, I'm looking at some information uh transparently from the Reagan Company, and it's the median new commissions of producers that are tech enabled versus non-tech enabled. And why this is important? Well, first of all, from a knowledge standpoint, second of all, from an awareness standpoint of knowing what some of the best of the best agencies out there are doing, because this is the best practices report. The tech enabled new commissions and producers are 179.09, and the non-tech enabled producers are 104. It's a $66,909 spread. And that's new commissions. Okay? Let's take a look at a comparison. This is the median book size of producers that are tech enabled and non-tech enabled. The tech enabled median book size is 384,355, and the non-tech enabled is 216,000. That's $168,355 spread. So when it says tech enabled versus non-tech enabled, Daniel, give everybody a thought. What does that mean?

Well, tech enabled is any any type, like think of an enabler, right? So by combining technology and people together, you are now enabled to drive more revenue for the same effort, right? Drive more results or outcomes for that same effort. Um because the technology can assist you in being able to multiply your efforts within that same realm. So whether that's being able to analyze 20 policies instead of 10, whether that means that you're gonna you're gonna be able to do 25 follow-ups instead of 10, right? That's that's where technology can enable you in order to drive drive higher commissions, drive better outcomes. That's where tech enablement comes in. And what what we're seeing in in one of the goals that this is kind of in insider football for everybody, but one of the goals that I've been thinking about and trying to design is how do we create the million-dollar commission producer where that is fully fully autonomous with AI and automation or with an AI agent that can help them get to a million dollars in commissions in a year just by by enabling themselves with better tech with better and more technology to be able to design that out, what that would look like. And what would that mean? Because there's a lot of talk going on right now in the software world or in the in the in the in the retail world around the zero employee billion dollar company. Uh or the one to three employee, you know, $100 million company. There's a lot of these different things that are going on in the AI space around being able to do that. What if we could create you know an agency, a you know, a five-person agency that could do it at that at that level? Like what would that be? Right? Uh it's just something that I was very curious. I was just thinking about while we were talking about that, is think about the power that's available to us with agenda coming out and what we can do to help support and and uh provide the service necessary for so many people based on using this technology.

You know, as we begin to wrap up, you know, let's go back to something that we were talking about right before we went on. Because what you were just discussing, isn't it all about readiness?

Yes, you would not be able to do it if if you were not ready.

Right, right. So, you know, I'm looking at part of that study, which is talking about AI organizational readiness. And yesterday when we were working with an agency, uh, we were talking about another study from the big eye that came out, and you know, 68 point something percent of agencies plan to implement some type of technology automation powered by AI. If they plan to, that doesn't mean they're doing it. There's only like less than 10%, I think it was 8.6%, are actually using it. And that's because you know, those other 58 plus percent, they're not ready, right? They may not be ready. So this says technology alone does not create value. Technology alone doesn't create value. Organizational readiness does. And studies consistently show that the success rate of AI implementations correlates directly to, and this is exactly what you and I talk about so much behind the scenes: upfront planning, structural alignment, and change management strategies. And the other one to bring in from the left field is and leadership that's on board with this change management. And that's why we're so grateful to have the one, the only Natty Lewis on board as part of our team, because she helps with that change management, right? Agencies looking to adopt generative AI and everything you were talking about, Daniel, must start with an internal alignment and a clear-eyed view of what readiness entails. I think that's maybe a great synopsis as we wrap today. That's the clarity and everything else, Daniel.

Yep. If you you're going to have to change your mindset, if this is what you want to do, you'll have to change your mindset to get the clarity that this is where you want to go. And can you bring the people within your organization with you on that journey?

Yeah. Leadership. Great stuff, man.

Another great fantastic week. I know we need to wrap it up. Um for all of those agency owners that are out there listening today. If you'd like a private one-on-one session with Mike and myself in what we call our Onyx scaling sessions to talk more about what it would look like for your agency to have the right mindset and leadership along with automation and AI, um, happy to do so. There is a link in the show notes that you can schedule your time with us so that you can learn more about what we're working with with other insurance agency owners with uh on a day-to-day basis. Mike, thanks so much again for another great week, and we will do it again next week.

Uh thank you for all you're doing, and uh let's go help some agents get organizationally ready uh for the incredible opportunities that are before us in the future.

I like it. All right, let's do it. All right, you got it.