We all like to describe our agencies as our “families.” For some of us, the agency actually IS our family because our husbands, wives, siblings, in-laws and other family members work together. For other agency owners, we like to treat our employees as if they were family members and the result is that we have the same issues and problems as real families.

Eventually, whether for a short time or for a prolonged period, our little ‘family’ doesn’t seem to get along. These family members are more reluctant to quit (and it is almost impossible to terminate them) to resolve the organizational problems that they create and/or foster. The agency has become “dysfunctional.” Unfortunately, without an earth-shaking event, this situation tends to perpetuate itself and everyone (including the customers) notice the tensions. It is no longer fun to work together.

Many agents have called us in as intermediaries to solve organizational problems caused by parents, children, siblings or family-like employees. In every case the agency owner takes blame for being a) too hard, b) too soft, c) too flexible, d) too inflexible, or e) all of the above. They have no idea why the family-employees haven’t taken the agency into account as a high priority. “After all,” they claim, “the agency is everyone’s career and its success benefits all and its failure negatively affects all.”

What the owners fail to realize is that “owners are from Mars and employees are from Venus” (to paraphrase a very popular book title). In almost every case of inter-agency friction, the cause has been ego differences. Egos have destroyed more businesses (and started more wars) than all other reasons, combined — by far! Ego differences begin with communications problems and escalate when one protagonist doesn’t understand why the others can’t listen to reason. Each protagonist is certain that they are in the right and that they are only thinking of the best interest of the group. And each protagonist dismisses the others as having personal agendas.

And, most of the time, each protagonist is, in fact, trying to do the right thing for the best interest of the group. The problem is that as we become more family-like in our business, the lines of authority become fuzzy and everyone tends to believe that the business is a democracy.

The time to eliminate family dysfunction in an agency is through clear lines of authority and segregated responsibilities of each family member (whether real family or pseudo-family) at the outset of the relationship. As each family member is hired, they should have a clear understanding of their roles, expectations and limitations. This rarely happens. Family members most often come into an agency and grow into an eventual role or position. Other employees are certainly hired for specific roles. But as they become further involved in the agency, roles become blurred and, like family members, these employees fill whatever role is needed by the agency. In either case (family member or trusted employee) the stage is set for potential dysfunction.

By the time family members or agency staff begins disagreeing without the opportunity of an owner’s or manager’s arbitration and decision-making, the die is cast.

A dysfunctional agency need not dissolve or sell itself to end the internal disputes. There are ways to clear the air and get back to the business of insurance. But it first requires the agency owner to create a discipline that is rarely in place in a dysfunctional agency. That discipline will arrive in one of two ways, positive or negative. The negative approach is the natural tendency for agency owners who become fed up with the sniping and friction normal to a dysfunctional agency.

The owner who has, for the longest period, ignored the communications problems, hoping that all of the problems would resolve themselves, reaches the end of the rope and becomes an instant dictator. A dictatorship, regardless of the negative ramifications, is certainly a way of avoiding business dysfunction. The dictator is the first and final word in all situations and everyone in the agency understands that in the operation of the business. But you must have been a dictator for the long period for this management technique to work. You can’t have been a liberal manager, having an easy-going, laissez faire attitude until problems get so bad that a change must be made to keep the organization alive. Family members and other agency employees have been hired and have been working under the personality type of the owner for years. Changing that personality just grows the differences that may have caused the dysfunction in the first place.

A better way of addressing a dysfunctional on-going agency is for the liberal agency manager to add a level of discipline ORGANIZATIONALLY, rather than PERSONALLY.

The discipline that is best used and most acceptable is through the Strategic Planning process. When you introduce strategic planning to the agency you will use all of the protagonists in the design of the agency’s Plan. Instead of dictating a solution, the process encourages communications, cooperative goal-setting and creates an environment in which staff members, family and others, MUST work together to enjoy personal benefits.

The role of the owner is the coordination of the process of Planning. That process eliminates the ‘us and them’ concepts so common in the dysfunctional organization. Instead staff members begin to realize that the efforts of others reflects directly on their own results and compensation. When you count on someone else to make you successful, you tend to use that person’s strengths and overlook their challenges.

Of course, the planning process, like the dictatorial decision-making, begins and ends with staff members who are competent and desirous of the success of the business. If you believe that a family member is causing strife because of a lack of ability to succeed in the business or a genuine hatred of the business, no organizational or management approach will solve the problem. That person, family member or not, needs to be doing something else. You know when this answer is the correct one when the departure of the individual causes immediate and long-term cessation of the negative feelings in the agency. If that person leaving does not cause an immediate positive change in the agency atmosphere, that person was not the problem and you must seek further solution.

But, if the problem is capable family and staff members genuinely disagreeing with each other’s positions and fighting for their beliefs, Strategic Planning as an organizational approach will solve the dysfunction and return the agency to equilibrium. As an aside, it will also assure your attainment of short (one year) and long term (five year) goals and will advance the agency much faster than ‘seat of the pants’ planning that most agencies employ to manage their growth. Most agency owners feel that planning is too hard and that “fate” determines whether the agency will grow or shrink or earn a profit or lose money in a given period.

Four decades of experience tells us that planning businesses are much more likely to grow and prosper than ‘seat of the pants’ agencies. Adding the solution of internal strife in a dysfunctional agency is simply an additional benefit that may initially overshadow the real benefit of Planning. Call us to be sent Planning preparation documents explaining how to Plan in detail.