My father once told me, “If it isn’t broken, don’t fix it.” My dad was a pretty smart guy, but my dad lived in simpler times when ‘tried and true’ business methods worked year after year. Those times are long gone.

Automation, the global economy, and the Internet are changing almost every industry – including the insurance industry. Every businessperson from bookstore owners to insurance company presidents has a choice – be aware of the changes in consumers and the industry, or fade from the scene. When seeking to continue and upgrade your business, the new mantra must be, “If it isn’t broken, BREAK IT!”

The difference between 20th Century Strategic Planning and 21st Century Strategic Planning is that, in the 20th Century, once a company established its Mission and Vision Statements (where it wants to be in the future), the principal part of the planning process was involved in what to do in the next year to help move the business in the direction of the Plan. A changing industry requires more time and thought be put into an annual review of the top of the Plan – Where does the company expect to be in five years and how (Strategies) can it change to fit that plan?

The components of Planning remain the same, but the importance is now on the long term goals of the company more than on the tactical (annual) operational plan. If you continue to concentrate only on the annual planning process, you may succeed on a regular basis only to find yourself obsolete within a short time. This morning our local newspaper announced the closing of two clothing stores that had been a fixture in our area for over 30 years. Both owners announced their retirement, but for different reasons. One said that his stores had been losing money for the last few years to department stores, discount chains and, finally, to Internet sales. The owner was retiring rather than changing the way he did business. The other store’s owner also announced his retirement, but claimed that he continued to be profitable. He also felt the pressure and found it more difficult to stay the same every year and continue to make money. At 70 years old, he determined that closing was better than changing.

Unfortunately, we see examples of the business owners above in insurance agencies every year. Some agents don’t even know they are losing money every year. They just know that they are taking less out of the agency. Others see the handwriting on the wall and, rather than change as the marketplace changes, they “bail” and sell out.

Neither of the business owners cited above or the agents described were strategic planners. If they were, we would see more energized agency owners perpetuation their businesses internally and staying involved to exercise their entrepreneurial spirits to change their businesses as the market changes – using Strategic Planning as the conduit and framework for those changes.

Here are the components of Strategic Planning. Like any chain, one weak link will sever the entire line and ruin the Plan. Pay attention to the Plan and it will serve you better than you could imagine (until you actually try it for a few years).


A Mission Statement defines the position in which the business wishes to be five years from now.


The ABC Agency will be a $5 Million revenue P&C and Financial Services insurance business serving the State of (Your State). It will generate no less than a 20% profit through a fully automated centralized service center, four sales offices strategically placed throughout the state, and an Internet presence generating no less that 20% of the agency’s new business.


The Vision Statement differs from the Mission Statement because it defines how the company will be viewed by several significant entities. While the Mission Statement answers the question, “What will we be in five years?” the Vision Statement answers the question, “How will the agency be viewed by our Owners, Employees, Carriers, Customers and Prospects in five years?”


 In 2020 ABC’s owners will view ABC as a multi-divisional business with divisional managers responsible for profit centers.

 In 2020 ABC’s employees will view ABC as a professional business investing in its employees through training and career-pathing for whom they are proud to work.

 In 2020 ABC’s carriers will each view ABC as a partner in the distribution of either general or specialized insurance products. ABC will be a strong, profitable and growing producer for each of several carriers who respond with high authority levels and mutual respect.

 In 2020 ABC’s customers will view ABC as a large but personal and professional insurance counselor. Each customer will feel that they have a personal relationship with ABC’s staff and that ABC has been an insurance problem-solver, rather than a sales agency.

 In 2020 the focused prospect base of ABC will at least know ABC as a strong and professional insurance business dealing primarily in insurance for that prospect’s business or personal needs.


Strategy development involves taking the key phrases of both the Mission Vision Statements that are not already a fact and developing the areas that have to be changed in the business’ operation in order to accomplish the goal of the Mission or Vision.


“A fully automated centralized service center” is the basis of at least one Strategy, since the agency does not have one now.

Strategy: ABC will enhance its automation each year with the goal of having a fully functional automated service center by the end of 2020.


While a Strategy defines what must be changed in order for the agency to accomplish the Mission or Vision position within the five years of the Plan, it does not specify what the timetable for change would be if all five years of objectives were to be defined at present. Long Term Goals actually define the intent of the strategy in segmented terms from the businesses current position. It is expected that the Long Term Goals will change over time (since the industry will not remain static for five years), but defining five years worth of Long Term Goals from the agency’s present position carries a number of benefits: 1) It forces the management team to better define and focus the main points of the Mission and Vision, 2) It adds the first Reality Test to the Planning Process, and 3) It adds a cost and value perspective on each of the points of the Mission and Vision.


ABC’s Service Center will be centralized and fully functional on a totally automated (paperless) basis.

2020 – Integrate telephone system with database to pull customer file to screen upon initial customer call

2019 – Add optical scanning system to database to eliminate paper files

2018 – Add integrated quoting facility to website to permit quotes to be issued on all common policies

2017 – Have web access, e-mail and fax-on-demand at every workstation

2016 – Convert to a single database management system and Create Website


The Tactical Plan takes the lowest level of every strategy and defines the Annual Objective that must be accomplished in order to progress the Plan in accordance with the needs of the Mission and Vision. Each Objective must have an “owner” (not necessarily an agency owner) who will be responsible for coordinating the objective and reporting its results on a monthly basis.


Objective: Retain Web Designer, train in-house Web Master, and create an active website by 6/30/16.

Objective: Develop Specs and solicit bids to accommodate conversion to new database system by 12/31/16.


The Objective states the goal of the objective by the end of the year in objective, realistic and measurable terms. However, it does not address “HOW” the objective will be accomplished. The Action Plans define how the objective is expected to be accomplished. A single Action Plan may suffice for one objective, or a series of Action Plans (simultaneous or in quarterly sequence) may be needed to assure the desired results for an Objective.


Action Plan:

Quarter One: Interview, identify costs, and hire Web Designer.

Quarter Two: Web Designer and Objective Owner to design and propose a web design to management.

Quarter Three: Web Designer creates website and trains Web Master for maintenance and updates

Quarter Four: Web Site goes on-line.


While the Action Plans tell management “How” the Objective is to be realized, the Monthly Benchmarks represent the expected position of the Objective if the Action Plans succeed as expected. These Benchmarks are the measuring sticks by which management determines if the Action Plan is working and, if not, what changes need to be made. The Benchmarks are reported upon by the Objective owner on a monthly basis.


January: Identify and interview four Web Designers.

February: Request bids for web design from at least two finalists.

March: Select Web Designer.

Reality Testing must be applied at every level of the Strategic Plan. The question asked in Reality Testing is “Is it reasonable to expect myself or my team to accomplish the task in question considering all normal workloads in the agency?” If you need to add a $1 Million piece of equipment in order to accomplish a goal and you do not have (and can not get) $1 Million, that part of your Plan is obviously not realistic and must be changed. Reality Testing keeps a Strategic Plan from becoming a fairy tale.

The most important part of the Planning Process is the monthly follow-up after the Plan has been set. Hold monthly meetings with the purpose of reporting the results of each objective versus its benchmark, and you will keep your goals in the minds of every employee in the agency every day. If you do not hold the meetings, the Plan will be lost as normal crises occur in the agency and you will find that you have no Plan at all.

Changes to Benchmarks, Action Plans, and Objectives can only be made on a quarterly basis. The reason for this is that any Action Plan needs at least a quarter of effort before being evaluated and/or revised.

Every year, you will have to re-evaluate your Mission and Vision in light of the changing economy and insurance agency industry. This is very healthy and will assure you that your business stays current with the changes in the world. Planning is a way of focusing on the most important goals of your personal and business