ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

The Team Approach - Heaven or Hell?

Many larger agencies struggle with pressures from successful producers who would like to organize a ‘team’ around him/her. The claim is that, if supported properly, the producer and his team could be even more productive for the agency. Many of these producers are already owners of the agency who have a difficult time dealing with a central customer service department who has to manage the service of all producers in the agency. The larger, more successful and productive producers feel that they deserve preferential treatment and that, rather than ego-driven, this treatment simply makes sense to throw more support to more productive sources of business.

As a team is created and matures, a producer gathers a support team around him. Eventually, (s)he may add additional producers to the team either concentrating on a single, significant line of business or writing common business, but a for a full cross-section of commercial lines clients. If the team is successful, a Team Leader arises, the producer or a Service Leader, who directs the efforts of the team. The Team becomes a mini-agency within the larger organization.

The Team approach is a great one IF the Team Leader continues to be growth oriented and is dedicated to the best interest of the entire agency. What happens to the team if (s)he doesn’t?

The Team approach is a great one for production within discipline specialties. However, in many cases, a team leader has portrayed himself as a generalist writing all lines with one or two predominant specialties. That means that each team will write whatever it can (as if it were a small, specialized agency).

The problem arises as teams grow independent. Once the service staff, marketing staff, admin staff realize that their ‘bread is buttered’ by the Team Leader more than by a staff manager, they tend to perform according to the Team Leader’s standards, rather than to the common standards of the organization. You will soon find that the central managers (CL, Marketing) will feel rather powerless. The long-term results (especially for Teams that move to different locations) is that they tend to split off from the agency and form their own entities (in friendly or adversarial transactions).

The way to avoid an eventual split-off of teams is to centrally concentrate service, admin, automation and finance with specialists for each team but central management (to whom the staff reports and who pays and evaluates the staff) and with production concentrated by Team based on areas of specialization (any team can write other disciplines, but the service of those disciplines continue to be managed centrally by agency professionals concentrating on those disciplines, rather than by Team specialists. In this way a Contractor Team writes contractor business with specialist marketers and service reps. However, the marketers are controlled by a central Marketing Manager and the service reps are controlled by a central Services Manager. All non-specialty business written by producers in the Team goes to the general Services Department for daily management, leaving the specialty Team concentrating on its specialty.

This doesn’t have to look different than the Teams look today. The main difference is the management of the service and admin staff centralized instead of in the hands of the Team Leader. The specialists (csrs, AEs, marketers, etc) can even physically reside in the Team area but they are managed by the CL, PL, Marketing Managers to permit handling of overflow work by others within the appropriate department.

In order to avoid eventual schisms that may destroy an agency, each Team Leader must acknowledge that they get more from the agency than it would cost them to run their own agency. That must be demonstrated through specific allocations of expenses, rather than the same bulk allocations that the Team Leaders acknowledge are both fair and less than they could operate their books of business outside the agency. Never let a Team tailor automation, service procedures or marketing procedures. That role belongs to the agency central management. However, the Service and Marketing Managers earn their money by serving the Teams (who, by the way, are integral to the evaluations of those central managers). There must be a mutual synergy that keeps the Team Leaders and central managers tied together.