Many current agency owners assumed control of their businesses through an internal perpetuation from a father, other relative or senior partner. Far too often the transition was difficult and LATE.
Late, in these terms, means that the former owners outlived their productivity. Those former owners worked hard to make the agency grow and prosper. Their successors developed during the owners’ tenure and knew that they were going to eventually take control and ownership. However, the former owner began to relax (having “paid his dues”) and let the younger members of the firm carry more of the load. In many cases, those owners had produced and controlled the agency’s largest accounts, and their time was being spent in public relations efforts to assure the continued renewal of those accounts. However, when the owners were generating those accounts, they were working hard on new business and agency improvement all of the time. When they began to lay back and “enjoy” their lives, the intensity decreased and their level of performance for the agency dropped.
Those former owners RIP’d (Retired In Place). When they were in their prime, they would gladly hire new employees who would put in as much time, effort and dedication to the growth of the business as would the owners, themselves. Once they were RIP, however, anyone who came to the agency with an offer to fill the same role, as the current one assumed by the owner would probably NOT find a ready job offer. When the transition of ownership occurred, the new owners were faced with one of two types of predecessors, one who was looking to cash out and one who was willing to convert management and ownership to the new owners, but wanted (or needed) to stay in the agency in some advisory capacity. In some cases, the old owner stayed for years, draining the agency’s funds and efforts (since they always had things for others to do), but no longer adding value to the business.
The agency’s current owners loved their predecessors and appreciated them for the business that they built and transitioned, but by the time those prior owners left, the new owners (and the rest of the agency) were happy for the departure.
Now many agencies new owners have matured through their productive time in the business and are making the same mistakes that their predecessors made – with the same, stifling results. Few owners even realize that they have fallen into the same traps as their predecessors. Every time they lower their sales objectives or relinquish some responsibility, they always rationalize their continuing value as the agency’s manager or director.
Here is how to know if your time has come to say ”SAYONARA”:
1) If you had to take some significant time off, would you hire someone at the same salary you are drawing who does the same things that you do?
A) If so, you are probably still quite productive and would look on the new employee as an asset who will increase your long-term value.
B) If not, you must ask yourself, “Why would I not hire someone to do what I do? Is my role not productive enough to warrant a dedicated employee (or me, for that matter)?”
2) Do you feel that you have “paid your dues” and should now be enjoying the fruits of your labor?
A) Consider the role of the farmer. During all of the years he earns his living from the land, he follows the same roles. He prepares the field (i.e. hires and trains his staff), plants the seeds (i.e. markets and solicits prospects), waters, monitors and weeds for maximum production (i.e. sells insurance, enhances agency automation), and harvests his crop at the appropriate season (i.e. generates profits), once again preparing the soil for the next season (i.e. plowing some of the profits back into agency development). What would happen if after 20 years or so, the farmer felt that he had paid his dues and would become the manager, telling others how to farm the land?
B) Even if he is a good manager and trainer, he cannot multiply his land to support others in the same role that originally supported him. Once the new farmer knows how to prepare and plant, to water and weed and to harvest, he no longer needs the original farmer. The yield of the field, sufficient for one farmer, would starve two farmers. In addition, if the original farmer is a poor manager and spends his time off the farm, the new farmer will not take long to feel abused about performing all of the labor without benefit of ownership.
C) Who says you ever complete the “paying of dues”?
3) After all these years, can your ego stand to no longer be the “top dog”?
A) Even those agents without a super-ego will build an owner’s ego during their tenure in office. The President of the United States is not asked to stay on in an advisory capacity because the new President must be free to exercise his own agenda and power. Having an old owner remain in place can only work if the former owner takes a productive role whose compensation and accountability is defined and measurable.
4) If you want to stay, is it because you have nothing else to do? Is it because you need the additional income? Is it because you feel that the agency cannot succeed without you and would endanger the payout to you?
A) If you have nothing better to do and, while willing to transition the agency, you must continue (or retire to a rocking chair), this advice is already too late – GET A LIFE!! The agency has always been a means to an end, not an end into itself. Even if you have a short time left before the ownership transition, find some hobbies or find a new choice of career. Whether hobbies that fulfill personal desires or interests that fulfill cultural or civic responsibilities, you must keep as active as you are physically capable of in order to maximize the rest of your life. No, retirement from ownership is not the equivalent of a death sentence.
B) Even if you need further income, you have choices either within the insurance profession or in new career dimensions, since you will have cash or an annuity from the sale of your agency.
C) No, the agency will not fall apart without you any more than it fell apart when you assumed control. If, in reality, the agency will be harmed by your departure, you have not properly prepared your successor for the transition.
Does all of this mean that you must leave and sell your agency down? No, but if you intend (and are invited) to stay when the transition takes place, be sure that your compensation is in line with your responsibilities, and that you are accountable and can never be accused of soaking the agency after the sale.
Finally, it is always a good idea (and a reality check) to ask the new owner if he would like you to stay and what role you should play (have ideas of roles, goals and compensation should he ask). This gives him the power to invite you to stay or go, as he sees fit.