Ten Ways to Build a Strong AgencySep 05, 2019
The Agency's Best Version Pyramid
“Close your eyes and imagine the best possible version of your agency. That’s what you really want to become. You’ve got to let go of any part of your agency that is an obstacle, anything that’s holding it back from becoming the best agency possible.”
The concept of the Best Version Pyramid made its public debut during our recent ProFitNet meeting in April, and it is something I’m going to continue to develop for all the major areas of agencies.
The ideal way for me to explain the behaviors and strategies around becoming the Best Version Possible (BVP), is to use a pyramid, which I refer to as the Best Version Pyramid. As with any pyramid, it starts with core, foundational stones and ends with a capstone.
The first is the Agency’s Best Version Pyramid (ABVP) consisting of 10 “stones.” As I define the various stones, I’ll share each one’s purpose and desired results. You’ll see that there are four rows, or levels, of this pyramid: Strategic, Model, Leadership and Capstone.
The strategic level
The ground level or foundation of this ABVP comprises the following four strategic stones:
- High Performance Teams (HPTs). These are the teams of producers and their service partner(s) working together to obtain and retain Ideal Clients only. The goal is to free up the producers to invest 80% of their time and energy on sales, plus the sales-related activities of Continuations (not renewals), Relationship Management, and Pipeline Building.
- Unique Selling System. This is the unique and appealing sales approach that separates your agency from all “me too” competitors. No more practice quoting or unpaid consulting. You have pipelines that are overflowing with Future Ideal Clients only and have a closing ratio exceeding 75%.
- The Client Experience. This is your approach to overall servicing and value creation that constantly under-promises and over-delivers. Rather than renewing accounts, you continue relationships. In doing so, you cultivate raving fans who constantly send you referrals and introductions. They simply can’t live without you!
- Technology. Your entire staff utilizes and embraces technology, starting with your agency’s management system. You’re constantly training your team on using the system to drive increased productivity. Furthermore, you provide the latest tools and apps that will help enhance production and differentiate your team in your marketplace. If you have a tool such as Rough Notes Advantage-Plus, you’ve named an in-house “champion” who is responsible for making the most of it.
The model level
The model level consists of the next three stones, which essentially are the numbers or end results we seek.
- Two Percent Team Development. This focuses on investing 2% of your agency’s operating revenues on the training and development of your team members. You realize this is the only way your team gets better. Studies bear this out. According to the Association for Talent Development (ATD)—formerly the American Society for Training & Development (ASTD)—the professional services firms that invest in their teams at the 2% level enjoy increased productivity (revenue per employee) and profitability (30%+).
- Financial Model. These are the numbers that drive management decisions and overall results. Our model is 30-40-30: 30% Operating Profit (the bottom line becomes the top line in planning); 40% Service and Administrative Expenses; and 30% Sales Expenses. Whenever I speak to groups, I’m often asked what it takes to achieve a 30% operating profit. My response: You can only spend 70% of your operating income.
- Key Performance Indicators (KPIs). It’s critical to have a rolling three-year plan for your agency’s KPIs. The core KPIs are: Revenue per Employee; Spread per Employee; Revenue per Relationship; 80/20 Analysis; Revenue per Validated Producer; Sales Velocity; Retention; Net New Organic Growth; and Operating Profit. All plans start with where you are today (your current numbers) and where you want to go. Understand that all these numbers are the direct result of your Performance Drivers (the strategies and behaviors that are normal within the agency).
The leadership level
The third level is the agency’s leadership, consisting of two stones.
- Internal Communications. I’ve never seen an agency over-communicate, but I’ve sure seen a ton that under-communicate. The key is to consistently keep everyone in the loop and focused on the most important issues. It’s also about having a one-page business plan that everyone understands and has committed to. For example, are you holding monthly state-of-the-agency meetings? If not, what about quarterly meetings? Semi-annual meetings? Okay, did you have a Christmas party where you even mentioned vague plans for the agency? BFO: The only way everyone in your agency can be on the same page is if your business plan is on one page.
- Mission/Vision. As the good book says, “Without a vision, the people will perish.” The same can be said for agencies that lack an overall vision and mission. It really comes down to the “why.” Why are we doing this? Also, what do we want to accomplish? How will we know if what we’re doing is working?
The fourth level is the capstone—the 10th and final stone, which forms the pinnacle of your Agency Best Version Pyramid.
- Culture of Accountability. Does your agency hold people accountable to do what they said they were going to do? This presupposes that you’ve actually had those discussions with your team members. Do you have a Reverse Performance Management process in place? What about specific Performance Agreements - not employment contracts - with your producers, service team, and all other agency personnel?
This much I do know: Left to our own devices, most of us will do the wrong things. Remember, what’s inspected is respected, and what gets measured gets done.
The bottom line
To know how your agency rates on the Best Version Pyramid, I suggest you do a quick reality check. Go back and look at the 10 stones, and then rate yourself on each one using a scale from 1 to 10, with 10 being the best. A score of 5 means you’re solidly average, and 1 or 2 is absolutely unacceptable. What is your overall Agency Best Version Pyramid score?
Here’s your rating according to the Sitkins Scale:
80+ = Excellent! You’re doing a great job; just continue fine-tuning.
60 – 80 = Pretty good. But don’t get complacent and start coasting.
40 – 59 = Mediocre. You’re an average agency with average results; watch out for regrets later in your career.
20 – 39 = Going downhill. You’re staying busy with Hysterical Activity on the Way to the Grave. You confuse activity with results on a daily basis and are famous for saying, “Boy, am I ever busy! I just don’t know what I accomplished today.”
0 – 19 = Come on, really?
As you strive to become the Best Version Possible, use this Agency Best Version Pyramid as a guide. Above all, keep in mind that nothing changes if nothing changes!
If you're wondering how you can get your agency to its Best Version Possible, check out our training programs or schedule a discovery call with one of our Sitkins Coaches.
Roger Sitkins, CEO of Sitkins Group, Inc., developed The Sitkins Network and The Better Way Agency program. Insurance professionals with diverse levels of experience have benefitted tremendously from his training and leadership. To learn more, visit www.sitkins.com.
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