ACG - Agency Consulting Group

The PIPELINE

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

Defeating Inertia

THE GREATEST FORCE AGAINST PROGRESS AND CHANGE

Here's the normal routine -

An agency owner recognizes the "handwriting on the wall", feels uncomfortable with the lack of progress in the agency, or sees revenues and/or profits decreasing year by year. The owner intellectually understands the need for creative change in order to "jump-start" the business and get it back on a growth and profit track. He finally commits to change by contacting Agency Consulting Group, Inc. or another recognized "Change Agent" and also commits the funding necessary to identify and implement the changes necessary to progress his agency.

The consultant analyzes the situation and presents a series of recommendations, the results of which will change the agency into an efficient, professional, aggressive, sales-oriented insurance business. Three months later, the agent finds that his organization, who started the recommended changes so promptly, has slipped back into the old routine. There are always reasons - a difficult renewal period, absences, vacations, illness, inability to change systems to coordinate with recommended workflows, and a variety of other crises that are more normal than unusual in the course of agency operations.

The agent has run into the Inertia Wall.

The Inertia Wall is invisible. It is soft and comforting. It is "the way we've always done it". It doesn't stop progressive change. Rather, it simply absorbs it. In many cases, the agency actually believes that it has implemented the changes. However, when the consultant returns to check on the progress, he finds that the recommendations have been altered and turned to coincide with the comfortable processes and procedures that caused the agency to stagnate in the first place. Short-sighted owners may even believe that the changes simply didn't work - until they are forced to re-read the recommendations and realize that the implemented changes have little in common with the defined recommendations.

What causes Inertia to become such a strong force against change?

1. Comfort - The way that you operate is comfortable to you. The only time that you are virtually forced to change is if the current situation is more uncomfortable than the prospect of a new, strange way of doing things. An example is that of a tack stuck in your shoe. If the tack is in your heel and you only hear a click as you walk, it may not bother you enough to do anything about it (even though you know something isn't right). If, on the other hand, the tack penetrates the sole into your foot, the discomfort, itself, will cause you to do something about it. Most agency operations work sufficiently well to avoid E&O claims and, eventually, gets the work processed (whether or not sales and excellent service is a part of the process). You may recognize that something is wrong and a different process could help your business. But it is very easy to slip back into the comfortable routine.

2. Owner's Ego - Once changes are recommended the owner begins doubting whether the pain of the changes (mostly people issues) are worth the benefit. He also begins questioning whether or not the changes are positive. The thought process is, "after all, the way you've managed your business can't be THAT BAD! Maybe we should leave well-enough alone." The owner feels that if it is bad enough to change, it may be a reflection of his management or insurance skills!

3. Employees - Many agents fool themselves into believing that they (the owner) runs the business.

In fact, the long term employees in most agencies operate the business. However, the owner is in the best position to determine if the agency must change in order to continue to thrive. The problem occurs if the need for change is not communicated effectively to the employees or if they disagree with the changes, themselves. Some owners can dictate changes. Others can not. If you are not a dictatorial manager, open communications of the problems and the solutions must be a part of the formula for change. If not, the employees will revert to their own "comfort zones" whether or not you want to implement change. Then the only way to replace Inertia with change is to release the employees who refuse to change in accordance with the best interest of the agency.

What can be done to defeat INERTIA?

1. Use the best advisors you can to analyze the agency for change. Do NOT color their thinking with your personal desires. If you use the right people, they have had much more experience than you in exactly this type of change development.

2. Select from the recommendations judiciously. Do not make a blanket commitment to all recommendations without fully understanding them and believing that they will help you. Even though the consultant my be an expert, he doesn't make your decisions for you. Only select those recommendations for implementation that you would accommodate even if there was no dramatic reason for the change in the first place. That way, you can remain committed to the changes, even if they do not proceed smoothly (there are always "bumps in the road" to overcome).

3. Make your commitment to change publicly to all employees IN WRITING. The Commitment to Change should state that the future of the agency depends on changing with the changing times. It should specifically state which recommendations will be implemented, the time frame and how it will affect the employees. In some cases we have seen agents telling their employees that the reason for the system, procedural or organizational changes is to avoid the long-term result of a deteriorating agency, layoffs. Finally, the written Commitment to Change should offer to meet (individually only) with any employee who may have a problem with the changes. These discussions should center around the best interest of the agency's future. If an employee simply will not agree to change with the agency, (s)he must be given the opportunity to go to an agency that maintains the old ways.

Inertia is a terrible and powerful force. If change is necessary in your agency to guarantee your survival, be careful that the force of inertia does not overwhelm the dedication to survival, growth and profit that drives you to change your agency's operations.