Trap #1 – How Much Not Having a Clear Plan is Costing You

Is your agency getting good results? Well, I've got some good news. Got some bad news. Good news, you're getting good results. The bad news, these good results could very well be traps that are holding your agency back from becoming its best version possible. On the next seven episodes in a new series I'll be releasing, I'm going to talk about seven good results traps, how to see them, how to avoid them, how to escape and break free from them. 

Welcome to the Agent Leader podcast. My name is Brent Kelly. I am your host. It is a pleasure to be with you on this episode, and I'm super excited to kick off today, a seven part series for agency leaders. If you're an agency leader and you're looking to take your game, your agency, your people to the highest level to become that best version possible, you are absolutely in the right place.

You are absolutely going to love this series. A seven part series that I'm going to be kicking off today. One of the things that we've learned, I learn as I go out and travel and speak and work with agencies, is the fact that many agencies are getting good results. They're getting good results. In fact, when I was recently at an event, I would ask the entire group of leaders, how many of you think this is a great business? They raised their hand. How many of you are getting really good results right now? They kind of look around because it's a subjective question, but they like, yeah, I guess I'm getting pretty good results and let's face it as good as good results are. What we see and we find is that these good results are often the things that are most holding agencies back from what they really want from true freedom, from that best version possible that we talk about.

And so on the seven part series, I'm going to address seven specific traps or gaps or blind spots, whatever term you want to use that often hold agencies back from that best version possible. In fact, I love the term blind spot because if you've driven a car and you probably have, we know what a blind spot is. It's the thing you can't see. So what I really want this podcast series to do above all is to help shed light into an area or two or more that you go, you know what? I thought we were doing pretty good here, but I realize we're nowhere close to what's possible. And by the way, caveat, no agency is perfect. Your agency isn't perfect. This business is hard. As much as there are good results, and we'll talk about the good results trap, we have worked with agencies like yours for 40 years as an organization.

We have all been part of agencies that do coaches and consulting for the Sitkins group. So we've been there, we get it. It's not easy. But from an outside perspective, and we can shed some light on some of these potential blind spots, it's going to help you gain awareness. And to me, when you have awareness in certain areas, you then can create or take the best actions. So we're going to talk about all these areas over the seven weeks, one by one as we go through these because as I said before, running an agency is hard and obvious. Problems are - get this - obvious, obvious problems are obvious. In fact, I'll give you an analogy of this and why this series and these episodes are important because the things that we often work on, they're not bad things. In fact, in many cases they're important things, they're good things.

But I think sometimes we miss the point of potential deeper issues or deeper things that are happening in our agency that will have a longer lasting impact. So here's my analogy to this. If in your living room there was a large hole in your wall, you would probably say, Ooh, I don't like that hole in my wall. We need to fix it. Now, by the way, makes sense. I wouldn't like a hole in my wall either, and you probably should fix it. But this is an idea of something that's very visible. It's obvious, but guess what? It doesn't actually have any structural issues, most likely to have a hole in your wall. It just doesn't look good. It's annoying it. So we jump on those kind of things first. Now, at the same time, hopefully your house, but what if you had a true crack in your foundation?

Something that is hard to see. In fact, maybe it's not even always visible unless you're in the right place or again, you've got the right light to shed on it, and all of a sudden you see this crack in your foundation. And guess what? For the next several months or maybe even years, you might be okay, but at some point it's going to cause a major problem, a major issue, which will be much more time consuming, much more expensive for you and your family. Again, using this analogy. So this is a bit what we're going to be doing through this series is shedding light areas where there may be cracks in foundation, that these are important issues, and so often the urgent will supersede the important, right? The urgent will supersede the important because it's what we see first, it's what's going on. We're just reacting to stuff.

Sometimes we feel like we're a bit in survival mode. So I want to give you some time to go a bit deeper. In fact, I want to take it an extra level as a gift to you, the agent leader podcast listener. And this is something we have not done before. So please hear me. This is a big deal. We're excited about this. We want to help be a guide for you, the Independent insurance agency leader, to become your best version possible. So here's what we're going to do. If you go to sitkins.com/bookacall we will conduct a personalized individualized assessment for your agency based on key areas, then delivered to you a plan, a summary that you can use in any way that you want. That's it. So go to sitkins.com/bookacall, and you'll set up this call, and then we'll walk you through the process.

You'll talk to one of our coaches or consultants, and then at this point, we will run an assessment and deliver you a plan that you can use whatever way you want to use it. But we'll give you some different options here. There is no cost to this other than time the investment of time, which by the way, to me, this is one of the best investments of time you can possibly use. So there'll be in the show notes, again, sitkins.com/bookacall, right? Book a call. Alright, so let's dive in to these traps. What do they look like? What do they mean? And we're going to start with trap number one. So again, step by step, we're going to go through this trap. Number one, well, what is it? Here's the trap. Number one, there is no clear strategic or financial plan. There is no, here's some keywords here Clear strategic or financial plan.

So oftentimes we confuse tactics with strategy. We confuse tactics with strategy. And by the way, tactics aren't a bad thing. We need to have tactics in our agency, but so often we are so deep in the business and we're trying to survive every day that we haven't taken a step back to go do we truly have a clear strategic and financial model. In fact, this is your agency's business model. This is your agency's business model and your current business model. I've said this in this podcast before, your current business model is perfectly designed for you to achieve the results you're currently getting. Now, again, those results for you could be pretty good. They might be kind of good, they might be average, they may be okay, they may be bad. Whatever they are, your current business model is perfectly designed for you to achieve the results you're currently getting.

So part of this is taking a step back and going, is our business model leading us to the place that we ultimately want to arrive at? By the way, when you start to do a bunch of tactics and no strategy or don't take the time to have strategy, what can happen is that you climb a bunch of ladders only to realize you hopped on the wrong ladder, right? You're climbing up trying to do a bunch of stuff, you get to the top or somewhere near the top, you look around and go, gosh, I didn't even want to be here. So we often see that with agencies that look back and go, I've been running so hard for three years, five years, seven years, 10 years, 15 years, that now I'm kind of here and I don't know if this is where we want to be, right?

So taking some time to work on the business is important. The late great Jim Rohn, I love this phrase. He famously said this, that if you don't plan your life, and I'll add business, if you don't plan your life, there's a good chance that someone else will. And guess what they have planned for you? Not much, right? So get control back by having a business model. One of the most powerful questions that I ask agency leaders is this. In fact, if we were talking one-on-one, I have a good idea that you can give me a number of answers when I ask you this question. You ready? Here's the question. What's frustrating you today?

What are some of the frustrations you're dealing with? And I can tell you, in working with agencies and asking this question, you'll hear a bunch of things. Well, this is frustrating me. My people are frustrating me. Our systems are frustrating me, our use of technology is frustrating me. Our lack of growth is frustrating me, not be able to replicate or repeat processes, whatever it is. A lot of different frustrations that we get, and it's normal because we've got these things in our head. However, when I ask agency leaders, please tell me what you specifically want. What do you most want or desire as the spice girls famously said, So tell me what you want. Tell me what you really, really want. I'm sorry, couldn't help myself, but what do you want? It is a much more difficult question because I think it's easy for people and agency leaders to talk about their frustrations, but that oftentimes is playing defense.

The question of what you want allows us to think about specifically the type of offense that we want to play. And to me, a strategic plan and a model starts by asking you yourself, your agency team, your agency leadership team asking three questions. Alright, here are the three questions. Number one, where is my agency today? Where is my agency today? This is a truth question, by the way. This isn't we're doing okay, or am I right? Where truly is our agency today? Question two, where do we ultimately want to go? That's a vision question. You hear about that in other places. Vision, vision. But where do you really want to go? And then of course, the last question is the question around the plan, the model, the strategy. How will we get there? So three questions to consider. By the way, when I ask that question to one agency leader, now if you're a smaller agency and maybe you've got one person that really leads this model, this is a little bit easier.

But when you get 2, 3, 4, 5 more people that are part of leadership decisions, leadership execution, and different levels, and I ask these three questions, what's really interesting is I often get different answers from two different leaders. So where are you today? Now again, there could be specific metrics and we'll talk about that with KPIs or it could be just an emotional sense. I think we're doing really, really well. And then I'll talk to the other agency leader goes, ah, we're really struggling. I'm like, wait a second, you're on the same team here. Where do you want to go? Again, I may get one answer from one agency leader and a different answer from someone else. Well, I think in three years we're going to be doing this and doing this. Well, I don't really think that's the case. And then of course, the last question is really hard to answer if we can't agree on the first two is, where do we want to go?

What's our plan? What's our model? Which is a huge challenge to get everyone on the same page on board to move forward accordingly. So these answers seem simple and they are, or the questions seem simple. The answers when you add multiple people to them become very cloudy in many questions. So here's what I want to do to help you go further in this trap. This first part is having clarity. I want to give you more questions to consider. Again, you could write these down, ponder them a little bit. They're just little things you can make checks on. I don't know if you want to give yourself a rating, you do whatever you want, but I want you some give you some questions to ponder. And this is something I would strongly recommend that you talk with your agency leadership team about to see if you may be stuck in the good results trap.

Again, the idea that we're doing pretty good, which is good. However, because we don't have very clear answers on some of these that maybe there's a much higher level that we're missing out on and we don't ever want to have regrets. So here are some questions to consider. Do we have a clear, visible, and memorable vision or mission statement that we all rally around? This comes back to clarity again. Do we have a clear, visible and memorable vision, vision or mission statement that we all rally around? And by the way, I'm not going to spend the time on this podcast to go deep into mission and vision statements. There are tons of things on 'em. Yes, we help agencies with them. But here's what I will say on vision and mission, and we've struggled with this internally, is that they're way too complicated. They're way too just pie in the sky stuff that isn't clear effective or memorable, right?

Very simple. In fact, one of the things that we've talked about at Sitkins is, well, what do you do? We help agencies escape or avoid the good results trap. That's again, maybe that's not going to be our overall mission, but as far as a line or a tagline, it's memorable, right? People go, oh, what do you mean by that? Right? So for you and your agency, what is it? What's clear? What's visible, what's memorable? That your entire team, and this is important, can rally around? Because going back to the questions I even asked earlier on, where's your agency today? Where do you want to go? How are you going to get there? As a parent of five kids and a husband of one amazing wife, our kids know that if mom and dad aren't aligned on certain areas or questions, they can split us. They can conquer and divide, right?

Mom says yes to this, dad says, no. Dad says yes to this. Mom says, yes, we're going to find weak points. We're going to find the vulnerable areas that we can tap into to get to what we want. We understand why kids do that, but your agency team does that too. If we're not aligned, then it's going to be really hard for us to march forward together. And by the way, as a leadership team, it's absolutely okay that you disagree. Just don't be disagreeable. There's a difference. We can disagree. Hey, I don't think we should do this, but by the way, when we walk out of whatever room, if we're going to call a play, whether it's a virtual room or a round table room or we've got meetings or planning session, we walk out of that room. We need to be aligned together even if we didn't like all the answers.

And when you get multiple people part of an agency, large leadership teams, you're never going to agree on everything. But we can't be disagreeable, and we also need to be aligned as we walk out of that room. So that's the first question to consider. Here's another one. Do we have a clear strategic plan that aligns with our tactics? Now, what do I mean by this? Do we have a clear strategic plan that aligns with our tactics? Are we doing a bunch of stuff just to do it? Are we doing this stuff that aligns with the strategic plan? Now, we actually look at this backwards at Sitkins because so often agencies start with process. Like, here's the new process. I went to a workshop, I read a book, I had this thought, and we're going to install a new process this week. And what happens is, what friction?

We run into a wall. People don't buy into it. Why? Well, a big part of it is we've never established the culture of why that would matter. So to me is do we have a clear strategic plan that aligns our tactics? So if our plan, we talk about our plan, our plan, and why we're doing the plan, and the importance of the plan and the outcome of the plan, when we begin to apply tactics to accomplish the mission of that plan, you may not get a hundred percent, but you got people that go, oh, yeah, that makes sense because these tactics align with our strategic plan. So ask yourself that question. Here's another question, do we know or do we guess our KPIs or key performance indicators, whatever term you want to use, do we know or do we guess our key performance indicators? Now, I've said this in the podcast before, you can't manage numbers.

You can only manage behaviors. And I believe that we talk about managing behaviors, but we must know our numbers. And I can tell you in talking with many, many agency leaders, you can tell very quickly who's got a grasp of this and who doesn't? I can ask an agency about revenue or retention or revenue per relationship, or revenue per employee, or a closing ratio. There's a whole bunch of different stats you could look at. And the ones that know it go, yeah, our revenue is we're at 3.41 million, we're at 7,562,365. Maybe it's not that specific, but they know their numbers really well. And then I have other agencies that go, I think we're around whatever. How many producers hit your goals? I think about maybe half. I don't really know. We're trying to lead a team based on guesses, right? Versus having certainty in key areas.

And again, it doesn't mean we manage the numbers, but we need to know the numbers. What are the outcome stats, the revenue, the big picture, our organic growth rate, our profitability that we look at? What percentage are outcome stats? Do we know those? And of course, what are the performance stats that are going to drive to those outcome stats? And I've done some other podcasts talking about that. This next question is in conjunction with this. Does our financial planner model ensure adequate profit? Does our financial planner model ensure, ensure keyword adequate profit? Now, this may seem a bit silly, but oftentimes in business, and this happens is that we make money, we spend money, and then whatever's left over is the profit, and we hope that we have a good profit. Now, this is a bit of a joke, Roger Sitkins says all the time, but there's also truth within the joke.

So maybe it's not a joke, but it certainly is truth. He'll always talk to agencies. He goes, Hey, how do you ensure? How do you make a 25% profit? We'll just use that as an example. 25% profit. How do you ensure that you make a 25% profit? You kind of wait for the answer because you only spend 75%. That's it. You only spend 75%. So part of does your financial planner model ensure adequate profit is you start with the bottom line. The bottom line, in fact, becomes the top line. What is our profit goal? And by the way, when we work with agencies, we don't include contingency. That's a bonus. It's a great bonus. But let's talk about operating profit without contingency. What does that look like for you and your agency? You should have clarity on exactly what that needs to be. This also includes organic growth.

What does that look like? And by the way, one of the metrics or stats that we look at at Sitkins, which is super powerful, is GrowFit. GrowFit is not a popular term because it's an internal term. It's Sitkins. But growth fit is your organic growth percentage, plus your operating profit percentage, right? So if your operating profit is at 20%, your organic growth is at 15%, you're at a what? 35% growth fit. Our goal is to get agencies well past 40 into 50, which it gives very feasible if you keep some of these things in mind. Alright, so that's another question. Here's another question. Are we realizing our agency's full value? Are we realizing our agency's full value? And this comes back to profitability and clarity. I don't think agencies realize how often, how much money they're leaving on the table. Now, you may not have any interest in perpetuating in the near future, but guess what?

At some point you will leave your business whether you perpetuate internally or externally, right? You will at some point leave your business. And oftentimes we see this, this is one of our frustrations that we see because we see it sitting right there for agencies. There is a huge opportunity to maximize your agency's value, which by the way, all that does is give you options. It gives you options. By the way, it gives you options, right? And I think any agency leader and leadership team, we're looking for options because here's the deal, and these numbers fluctuate. They change. We're seeing different numbers on some of the valuation, still at a pretty high mark, but let's just use 10 x, 10X EBITDA.

And again, it depends. Internal, external, all this. We've seen numbers higher than this. We've seen numbers lower than this. Let's use 10 x every a hundred thousand dollars. Just please realize every $100,000 of unrealized profit is worth about a million dollars in agency value in many cases, more than that. So these things are super important. And you think about this, ah, well, we'll be fine. Yes, you're probably getting good results here, but imagine if you went to your best version possible, what opportunities are there financially as far as agency value? And then here's my last question to summarize some of these things to you, one final thing to think about in terms of strategy and having this model, how much money are your good results costing you right now? How much money are your good results costing you right now? Now, I don't even mean this financially.

There's one aspect financially, but I'm also talking about time and relationships. What are your good results costing you? Because let's face it, when you have good results, what will often happen? I mentioned this earlier, is there a bit of the C word, word complacency that creeps in? Because even if we don't do the things we know we can and should do at higher levels, serve our clients at higher levels, run our processes a bit more efficiently, or be more diligent, have more accountability. Some of these traps I'm going to talk about in the next six episodes, we can do none of that and still do okay? But these good results are truthfully holding your agency back from that best version possible. And it's costing you money, it's costing you time, and it's costing you quality and relationships. And I would add one more. It's costing you purpose in what you do at the highest level.

One of the things that we see with agency leaders and great agency teams, as much as I've talked about financial model and money and money is very important. You can't pay our people, we can't grow, we can't invest all these things that we know at the highest level, but it's beyond that. It's beyond the money Part of this. It's about winning the best agencies. And you asked this, the best producers we talked to, is it about money or is it about winning? It's about winning. And again, nobody's going to be perfect. No one's going to have an undefeated record. But I think we all deep down our soul strive for higher levels of growth. And we all know either consciously or subconsciously, when there's a gap between what we know we can achieve and should achieve, what we're actually achieving, it causes frustration, right? So we want to help you avoid that frustration. Again, as a reminder, if you want to get a personalized assessment, we've never done this before, please take advantage. We'd love to have a conversation with you on this. And again, if it leads the fact that you take our best version possible plan and go out and try to do something on your own, great. If you want to use us as a guide to help you execute at the highest level,

We love that opportunity. If you want to take your plan and go, I don't like any of it, that's up to you. But we want to give you options. So if you're looking to escape any potential traps that are your good results traps, if you want to escape any good results trap, if you want to execute a simple and proven plan to enjoy the freedom of a best version possible agency, again, go to sitkins.com/bookacall. Again, we'll set up a call. We'll conduct an assessment. We'll deliver your plan. With that, I can't wait to do episode two on the second trap. We're going to talk about the good results trap on my next episode. Until then, I wish you and your agency all the best in your success. Thanks for listening.