If you feel it's an unfair criticism, then why are so many producers/agencies afraid to discuss their compensation with clients?

And therein lies the primary problem that's led to our leadership crisis. Nobody has had to lead. When financial rewards are as high as they have been, a lot of sins get covered up. Who wants to do the hard job of leading when they don't have to?

And therein also lies the need for leadership to step up like never before. The high financial reward is evaporating as we sit here. It's up to your agency leaders to ensure the financial reward continues. It's up to those same leaders to ensure the very survival of your agency.

Don't get me wrong, I'm not down on our industry; quite the opposite. I believe, in our role, we're in an extremely unique position to have an unbelievable impact on the businesses of our clients; an impact so significant that, for those who deliver, it deserves an increase in compensation. However, I'm very negative on agencies that feel entitled to excessive compensation for mediocre value. I'm even more negative on leaders who've abandoned (or never embraced) their responsibilities.

Let's take a look at three of the most critical aspects of leadership and examples of how they are, all too often, lacking in our industry.

Effective Leaders Ask a question

Owners need to be sellers of vision and direction, but, all too often, they're buyers of excuses.

I talk to many agency owners who recognize how much they need to fundamentally change their business model. They recognize that quoting insurance and fixing the occasional service issue has become woefully inadequate and they see the need to dramatically expand their value proposition. Unfortunately, too many of them lack the backbone to bring the necessary change to the organization.

It's common to see agencies whose struggles are directly attributable to not having firm expectations and accountability for how their producers perform. They usually know change is necessary, but they also know their producers wouldn't go along with it.

And this is a massive failure of leadership: letting a group of underperforming individuals run your business into the ground rather than require them to do what is necessary for the survival of the whole company. Clearly, leadership isn't running this show. And no one is being done any favors here because if the agency doesn't survive, neither do the producers.

Effective leaders listen to everyone around them. They listen to their team, they listen to their clients, and they listen to the market. It is the leader's responsibility to see the most complete picture, make the hard decisions, and lead the team to where they need to go.

“Leading” the team only as far as they are willing to go is a failure of leadership.

Effective Leaders Ensure their Team is Prepared

In most areas of the agency, leadership does a pretty good job of providing the tools, resources, and skills training necessary to allow their team to be successful. Unfortunately, the area where they almost always fall short is in the one area that makes everything else possible: a well-defined, buyer-focused sales process designed to bring in new clients.

Agency owners will repeatedly take the position that as long as the producer is producing, they don't care how it happens.

The clients and prospects belong to the agency, not the producer. Not only is it the right of the agency, it is the responsibility of the agency to determine how the sales conversation takes place, how client expectations are set, and, ultimately, how those expectations are met. Agencies need a consistent process that allows producers to deliver consistent results while still allowing them the flexibility to be themselves. One that:

• Differentiates – Allows them to stand out from the same, tired sales process of their competition
• Educates – Provides for continued improvement and development of producers and can be taught to new producers
• Scalable – Meets the needs of veteran as well as novice producers, and also meets the needs of sophisticated buyers, as well as the mom-and-pop's
• Repeatable – Allows for consistent execution and results
• Delivers Value – Educates the buyer and allows them to make the most informed buying decision possible

Effective leaders understand a well-defined sales process is the foundation on which a successful business is built. Everything from agency profitability to client satisfaction is the direct result of an effective sales process.

Effective leaders reward the right behaviors

In most agencies, producers are being paid too much for renewals and not nearly enough for new business.

Producers are hired because of their ability to generate new business. It's a difficult job and one that should have a very high financial reward. However, they should be hired to ALWAYS be generating new business, not just producing until they decide they want to simply sit on a book of business.

Instead of having a compensation formula that rewards continued production, most agency compensation plans encourage producers to focus on renewals. As a result, producers quit producing and the result is an overpaid and under-qualified service person.

Effective leaders are clear about the behaviors in every role that drive the necessary results and build a comp plan that encourages those same behaviors.

I know most of my criticisms won't be popular nor are any of my suggestions easy. However, the truth can be harsh and nobody ever promised an easy job when you became a leader.

There is a crisis in our industry, which means there is a crisis in your agency; a crisis many won't survive. But for those who stand up and shoulder the burden of true leadership, unprecedented rewards are waiting. Now, go lead your agency to places your competition isn't willing to go. You have a whole team waiting for you to do your job.