Episode 334: Automation Without Documentation Creates Chaos

Welcome back to the Scale Your Insurance Agency Podcast, the show built for independent agency owners who are done being the bottleneck in their own business. I'm Daniel Metcalf, and every week I'm joined by my co-host Mike Stromso, one of the most respected operators in the independent agency world. Between the two of us, we bring you the real levers that move a $3 to $20 million agency from successful but maxed out to systemized, scalable, and running without you holding it all together. Here's what we focus on. Mike brings the people side, leadership, team development, niche sales mastery, and a three-piece system that helps agencies build a business worth owning. I bring the machine side. AI, automation, and workflow design that frees your team from the operational drag, eating your margin and your time. Together, we're building a framework that can grow an independent agency 4X to 9X without burning out your people or your checkbook. If you're an agency owner who's tired of growing by hiring, who knows you have a capacity sitting on the table but can't figure out how to unlock it, this is the show for you and your weekly edge.

Greetings everyone, it's Mike Stromso, and welcome to the next episode of the Scale Your Insurance Agency podcast. The subject that I want to share with you today is critically, critically important. But it's one of those subjects that a lot of people don't want to talk about. Not only they don't want to talk about it, what we're finding in many independent insurance agencies, not all, is they're not willing to do anything about it. But I know that's not you. Thank you for showing up today. Because that's 86% of all success, according to Woody Allen and many others. You showed up today, so let's get to work on helping your agency. Because my core message right now is when technology does the work of machines, people finally get to do the work of humans. And what we want to do, our encouragement in this podcast is to position you, to position your team, to position your agency to do more of the great human work. Because it's my 100% belief that the human aspect will never go away. It's just going to look different into the future. So what is at the core of that existence? What is at the core of machines doing machine work? All of the technology, the automation, the AI going on in your agency. What is at the core of all of those operating parts of your system doing the right work? It's quite simple. It's just one item. And it's that that I want to speak with you about today. Because here's the way it's been, but not the way it should be for your future agency. And I've got to add this in. There is a difference between growth and scaling. Let me repeat that one again. There is a difference between growth and scaling. Growth are things of the past. It's the way we've always done it. The way we've always done it is the way we've always done it. And if you keep doing it the way you've always done it, you're going to get the same result. Scaling is doing things the way that you plan your future agency to be. So plan for your future agency to look like this. You know, maybe six full-time producers that have full pipelines that are operating at the highest level. A marketing department that is filling the pipeline. Great account managers, great processing, great AI and automation. That's your future agency. You want to create your agency based on your future agency and operate it like that in the present. You want your future agency to operate in the present. That's how you scale. And so the missing piece, because people are operating in growth mode, not scale mode, in today's environment, is that most agencies, they run on tribal knowledge. Most agencies, not all, run on tribal knowledge. And so if you're operating on tribal knowledge and somebody gets sick, somebody gets in a car accident, God forbid something else happens to them, what happens to that tribal knowledge? Gone, right? That is why it's critical that you document every single critical operating process and workflow to become part of your entire agency operating system. It's critical to your existence. Let me tell you the story about an elite agency that I was just collaborating with this morning. That agency grew 300% in the early days of their UPP experience. Phenomenal. Incredible. Kudos to them. But then they hit a bit of a bottleneck, including the owner being part of that bottleneck. But the great thing about this owner, she didn't take it lying down. She stood up and did what she had to do. So a number of months ago, they made a decision. And that's a huge part of it. They made a decision to move their agency forward, to scale the agency. And that decision was they partnered with one of our UPP team member experts and made a decision to document every critical piece of their operating system. Now, what I'm going to say next, I don't want to alarm you, but she told me this morning that they currently have over 400 SOPs within their agency business. And this is a multi-million dollar revenue agency, by the way. Kudos to them. And that's our encouragement for all of you. Don't let it be daunting. It doesn't need to be. It's simple like that. And that's how we did it more than two decades ago in our own agency. I found the philosophy. I found the way to do it. I called a team meeting. I was excited. I said, team, all we need to do is have every person do one a week. That's where we started. And they got so excited once it started, you know, the snowball effect going downhill. They started doing two a week, et cetera, et cetera. In a pretty short period of time, we had over 500 documented SOPs or processes or tasks, whatever your word is. So it is possible, especially with today's automation and technology. So don't let your agency depend on tribal knowledge for the future of your operation. Because I'll tell you this, and I've experiencing I've experienced this a lot in the last year. If you try to add automation technology all powered by the full suite of AI available in today's marketplace, if you try to add all of that into your agency and there is not documented processes and workflows in place, you know what's going to happen? It's the dreaded C word. Chaos. You will have more chaos. If you add automation technology powered by AI on top of non-existent documented processes and workflows, you will create more chaos. I would love to know how that works out for you. No, don't do that because I know how it works out. And I don't, we don't want that for you. Okay. Elite agencies, like the agency that I was just referring to, they run and operate on documented processes and workflow systems. So let me give you some examples because I show up here every week to help you. So if you don't have something to write with and write on, I encourage you to pause right now and grab something to write with and write on. Because you don't want to think it, you want to ink it. And then, most importantly, find that one person on your team who's going to own getting everything documented. It should not be you if you're the founding owner or leader. Unless it has to be. And so I'm going to give you the list of things that should be documented as far as systems in a high-achieving scaling independent insurance agency. Ready? Here we go. First of all, nothing happens until somebody sells something. Learned that years ago. Nothing happens until somebody sells something. So your entire sales process must be documented. I mean, the word that always comes to my mind should be roadmapped. So you should have a roadmap from the very first touch until the close. And generally speaking, it takes five to twelve touches to close somebody, and sometimes more in today's world, right? So your sales process, what the intake looks like from the first time that they reach out to you, whether it be phone, email, text, an online web form, whatever that might be, each of those must be documented and what it looks like. What happens once the info comes in? What happens to it then? And I want you to start thinking about being an automated or AI first operation. So be thinking about it now. It may not be reality yet because you got to document your systems. But start thinking about being an AI forward-thinking agency. Can that intake be automated? And if so, how? But document it first. Because a good, if you hire an outside company or partner with a vendor for your intake, they're going to want to see your documented system so they can do what they do. So that's why you need to get a document. So document every part of the sales process, from intake to quoting, to presentation, to proposal, to close, to onboarding, and all of it. And what the follow-up and the continuation of the relationship is going to look like. The entire sales process. That's number one. Number two, I just touched on it, new business onboarding. New business onboarding. And I'll recap for I'll recap all of these for you at the end. New business onboarding. So once somebody agrees to partner with you, agrees to have you protect their business or their home and everything that's important to them, what are you doing to welcome them into your agency? They just put their trust in you. They just put their confidence in you. They may have left a relationship that was 20 years to go with you. What does your documented system look like as far as your new business onboarding is concerned? I remember when we built ours, it was over two years. Strategic, very strategic, all with a desired outcome. But document it. What do you want your client to experience? What's going to cause them to say, wow, where did this agency come from? That's part of your system. And it should be a great mix of online and offline. Online and offline. That sweet mix. That's number two, new business onboarding. Number three, the continuation, the relationship continuation, also known as renewals. And that's a new term that I learned from a great industry friend of mine. I love it. Continuation of the relationship. I mean, because let's think about that for just a minute together. Isn't that the one thing that we have that will never go away is our relationship based on trust and our ability to help them make the right decision, like when a claim happens? That's something that technology and AI will never be able to do. That critical judgment, that critical thinking moment, that's a human moment. Okay? So the continuation of the relationship or the renewal process, that's number three. Is your renewal process from the moment 120 days out, or maybe even 180 days out for more complex commercial renewals? Or those seem to be every month for 12 months, right? But whatever it is, is it documented? Is it planned? Is it strategically and intentionally documented? And more important and importantly, after you get it documented, is your team trained on all of it, all facets of it? How often? Is it role-played? Documented, trained, role-played. Documented, trained, role-played. The power of three. And let's go back to our agent from this morning that I've referred to a couple times in this podcast. She said one of the greatest things that has happened since they created all those SOPs, everything has become intentional. Everything has become intentional. And intentionality is huge. Because to transform your operations, everything must become intentional. That is number three, the relationship continuation or renewal process. Number four, claims advocacy. So, how well documented is your claims process? And ladies and gentlemen, believe me, I know. Talking with many of our member agents and agency leaders, today's industry is a lot different than it used to be. There are carrier partners out there that say we will not talk to you, the agent. I mean, I'm going to say it because I'm not holding anything back at this point in my existence. That's a bunch of BS. Why do we exist? Because as independent agents, we work for you, the customer first. We're not beholden to any one insurance company. We work for you, the customer, first, to find you the best value for your insurance dollar, to protect you, to guide you, to be there when you need us the most, which is claims time, by the way. It is what it is. Still, I encourage you to document your entire claims process. Be the advocate for them when they need you the most. And that starts from moment one when you learned about the claim. Simple to do, you can take away right here, starting today, right now. Make sure step one in your process and system on claims advocacy is send them an immediate text to all decision maker parties or all parties involved that are your clients. Send them a text with the claim number and the contact information for the adjuster so they have it in their phone. Step one. That's what we got to in our agency. Critically important. I mean, is these devices, they're with us all the time. Are they not? I mean, in many situations, they're on our bedstand when we're sleeping, our nightstand. Okay. Number four, claims advocacy. Number five, account management. Or I put in my notes a roadmap. So once you've onboarded them, once you've gotten them to the point where they're with the account management team in the agency supported by a processing department, which is supported by technology and AI, great. Okay. What does that relationship look like? And it's going to be in combination with your marketing department as well. I mean, thinking back, and I'll have a specific episode on this exact subject coming up in our series. One of the things that changed our agency forever. Forever. Was when we brought on the person to our team, Andrea Wyatt, who built our marketing department, because we were flying by the seat of our pants prior to that, piecemeal in here, piecemeal in there, vendor here, vendor there. She brought it all together, created the brand and everything else. But it was planned and systematic. And then we our monthly newsletters went to a whole new level. Our monthly communications, our nurturing emails and all of that. Twenty-seven times minimum. We connected with our customers. Twenty-seven times. We were Toma beyond Toma, top of mind awareness and Toha, top of heart awareness. The door was always open. We were always a welcome guest, never an annoying pest. We had raving fans galore because of the way that our accounts were managed and the touches and the nurturing and the caring and all of that. So that was number five, account management. And I'll recap these again. Number six, marketing. Marketing. Marketing. So what does your marketing plan look like? What does your marketing plan look like? And I intentionally said that word plan because you should have a documented marketing plan. And the difference between a marketing plan and say a marketing program is the plan also includes your desired outcome for those touches. So what does that look like? I mean, if you're sending out a piece as part of your welcome kit process in your marketing plan concerning a line of business that you don't have, like, you know, uh cyber uh or EPLI or an umbrella or boat or whatever, right? What is the desired outcome? Obviously, it's to be to gain that policy as part of the entire account. Okay. So a marketing plan has all of that. The desired outcome. So it's your framework for your entire marketing effort within your agency. Okay. So that is number seven marketing. One, two, three. Excuse me. That's number six marketing. Number six marketing. Number seven as far as your agency operating system and it's documented by processes and workflows. Recruiting. Recruiting. Recruiting. Attracting and recruiting. And when I say attracting and recruiting, I'm talking about team members. Your next A player. How systematic are all of the methods in your ongoing attracting and recruiting system within your agency? How many do you have now? And how many can you employ as far as building out that system? It's critical. It's critical. Because the day that you will need a new team member is going to happen on the day that you least expect it, and it's the least convenient. Believe me. And if you've been uh following this podcast for years. Thank you, by the way. You should always be recruiting. You should always be recruiting. Okay. So your recruiting system for your next great teammate or teammates should be ongoing and forever pursuing. And multiple ways. And I just updated how we teach that within UPP. And we have a specific method that we recommend. Quite possibly I'll have a podcast on that coming up. Because it's vitally, vitally, vitally important. If there's one thing thinking back over all of the years that we've been serving independent insurance agents in UPP, the people attracting and recruiting, probably definitely top three, where agency leaders are constantly challenged. Okay. So number seven is recruiting. Number eight, leadership. Leadership. People are silently waiting to be led. And this just happened last week. It happened with a multi-million dollar revenue agency last week. And we were talking about their leadership meetings, and we were talking about their leadership team. And there were some bumps in the road concerning all of that. And as I asked a few questions and started to questions and started to uncover things, what I learned is there was a lack of structure in their leadership meetings. A lack of structure in their leadership meetings. And you may be thinking to yourself, Mike, what are you talking about? What I'm talking about is the agenda. Who is leading that meeting and following that agenda? What the expectations are of the leaders in that meeting. What is the criteria that they should be discussing in those meetings? And does everybody show up prepared for those meetings? That's just a small portion of what happened. And a lot of it was not existent consistently. Consistently. So what we did, we took a step back, maybe two. We rebuilt the structure. We rebuilt the structure. We delivered a brand new updated structure. The leader who owned that meeting committed to reviewing it to implement this coming week. Done. Leadership. Structure of the meetings. Those leadership meetings are critical. Whether you have one additional leader, whether it's a leadership meeting of two or a leadership meeting of six or more, the structure of that meeting is critical to the leadership of the entire organization. Because one of my greatest leadership thoughts of all time, they are your entire organization. Your entire organization is watching everything you do and everything you don't do. And they are listening to everything you say and everything you don't say. And it all trickles down from the leadership. And when the leadership is structurally not sound, it permeates throughout the business. Leadership. And our last one for today, financial management. Financial management. Consistently run into this in today's independent insurance agency world. It's part of the entire agency operating system, and there should be documented processes as to exactly how and who is running the financial management of the entire agency. Let me give you another analogy thought just for this one. If you follow sports, think of your favorite sport right now. Okay? Football, basketball, soccer, baseball, whatever your sport is. Every single sport has a scoreboard. Because everybody wants to know what's the score and who's winning and who won. Because if there was no scoreboard, it would just be an exercise program, right? Same with financial management. What's your ultimate scoreboard? Well, your initial scoreboard is your PL and balance sheet. And if it's not up to date and it's not right, that's a problem. And I run across that all too often. I'll say, tell me about your bookkeeper. Tell me about your CPA. Do you trust your CPA? And I get, uh, on that. But your entire financial management for your business should be documented and it should be systematic. I'm not talking about the details of the numbers. I'm talking about who does what. Every just thing that we just talked about, I'm going to recap them right now, should be present in your agency as part as part of your agency operating system. Here's the recap of your list to get started with. One, sales process. Two, new business onboarding or welcome kit. Number three, the relationship continuation process or renewal process. Number four, claims advocacy system, the entire claims process. Number five, account management. That's after the new business onboarding, et cetera. You're managing the account for many, many years to come. How is that documented? What does the roadmap look like? Number six, marketing. Marketing. Number six is marketing. The entire process and system. Is it documented? What does it look like? Number seven is recruiting. Attract, recruit. Attract, recruit your team members your team members. Okay. Number seven is recruiting. Number eight is leadership. Do your leadership team meetings have structure? Is your entire leadership structure? Does everybody know what the desired outcome of their role is? Number eight, leadership. And number nine, financial management. Is the financial management the ultimate scoreboard of your business? Is that process documented? Are the workflows documented as to who's doing what? Does everybody in your organization know who to go to if they got a question about that? Recently had an agency. Payroll went south. Rutrow. Yeah, it was a big stinking problem. Talking about the situation with the owner, I said, who is the contact for this? And there was some, you know, not smooth conversation. It was not documented in structure. The number one expense on your PL is payable. And it's not documented, and nobody knows exactly who the go-to is? Don't let it be you. You have the list. It's vitally, vitally important. Documenting your entire agency operating system so there is no chaos as you begin to add automation technology and the full suite of AI available to your agency operating system so the machines can do the machine work. So that the humans can do what humans do. The important work. If you'd like to jump on a session and take a deeper dive into anything we've talked about today, or anything that we've talked about in the past, or potentially in the future, somewhere around the show notes, there's a link to a UPB scaling session. I'd love to connect with you. Our team would love to connect with you and learn more about how your agency can be helped to getting to scale in the future. And if you got great value out of this episode today, please share it with somebody else you care about. We are grateful for your sharing the link to our episodes. And we're grateful and thankful for you. What an incredible, wonderful industry we're in. An unlimited future. Our goal here is simple. Impact a million lives. I hope this has impacted yours. I'll chat with you on the next episode. Take care.

That's a wrap on this week's episode of Scale Your Insurance Agency. Quick reminder: everything we talk about on this show is built to do one thing. Turn your time into profit. More revenue, more margin, more freedom without adding headcount to make it happen. If something landed for you today, please share it with another agency owner who needs to hear it. This community only grows when good operators help each other level up. Please subscribe, download, and share our podcast and all your other favorite podcast engines. And if you're ready to stop figuring this out alone, Mike and I are both in the field working with agencies right now. Please reach out. Find us on LinkedIn or on our websites, and we'll tell you exactly where your biggest opportunity is to scale. Until next week, build the system, protect your time, and scale the right way. See you next week.