Management by the numbers

Management is both an art and a science. Most agency owners forget about the science part. That is because owners typically are not formally trained in management techniques. Interestingly enough, the “art” side of management is difficult to learn for most people, while the “science” side is often easy to understand and implement.

When managing staff, a typical error made by owners/managers (called manager from now on) is to be reactive to issues rather than proactive. For example, imagine if a good, long-term employee makes a couple of mistakes that management notices. When exploring why these errors occurred, the employee blurts out to the manager that he or she is swamped with work. This is all news to the manager who then works to resolve this “new” problem.

The key to the “science” part of management is to develop and implement a system. The system consists of procedures, as a way to monitor progress and performance and steps to correct things when off target. The agency manager files the procedures that the staff will follow, and monitors the activities and makes adjustments to make sure the workflow meets the agency’s goals.

Perhaps the easiest part is the monitoring of the activity. Unfortunately, it is often not done correctly or even not done at all. With a properly running automation system, there really is no excuse not to monitor activity. It does become more difficult if the agency is haphazard in entering data into the system. However, Excel spreadsheets or even handwritten reports work just as well.

What to do
The big picture is that management needs to track what the producers and staff completed, what they are working on now and what is planned for the future. The key is to choose useful metrics that management can track and the staff can use.

Reports need to be run on a regular basis, some weekly and some perhaps only once a month or even quarterly. These reports need to be reviewed by management first and then passed on to the staff for their action. Consistency in running the reports and following up with action is imperative.

What to track
There is no universal decision on what information to track since much can be based on management’s philosophy and the talent and personality of the employees. However, there are some fundamentals that most agencies will use, such as renewal lists, new business sold, etc. When tracking data, there also needs to be a way to use that information, such as action items for the employees, comparing results, or follow up on corrective action.

The typical CSR might fill out applications, help with marketing, handle service calls from the clients, review policies and renew business. A good CSR or agency management system will automatically record this work, so all of these activities can be tracked. It is important, however, not to create a lot of work just entering data on the “real” work that is being done.

Producers typically develop leads, make calls to screen prospects, go out on sales calls, market quotes, and provide service to the client. These activities can be tracked in the agency management system, a contact management database or some other software, such as Excel. A good sales meeting requires a good review of the “numbers.”

Present the numbers
It probably works best if management collects the data and runs the reports. Producers, however, might have their own system, so they will have to forward their data to management. Management should scan the reports, highlight any discrepancies or areas of concern and look for areas of success. The reports should then be forwarded to the employee for their review and action.

It is recommended that some reports be run weekly, such as suspense items. This can be done on Monday morning, so that they are reviewed by management and forwarded to the staff early in the day. This way, both the staff and management have a good idea of what needs to be focused on and how much work there is for the week. Renewals are typically run monthly. Management should scan to see if there are any red flags before forwarding the reports to the producers and CSRs to handle.

The agency’s regular staff meeting is an opportunity to talk in general about results, especially successes. Problem areas are an opportunity for management to see if they need to be involved in providing support or making a decision. Individual corrective action should always be done in private. However, for the sales staff, public presentation of new sales results is often a good motivator.

After the data is collected, reviewed and shared, management needs to follow up to ensure the employees are properly responding. Numbers are great for seeing what is happening but numbers by themselves do not create action or resolve problems. Follow up is where the “art” side of management becomes important.

A final thought
A good chunk of management is evaluating employee performance by reviewing data associated with employee activity. A system to collect, review and distribute this data is easy to set up and needs to be consistently followed. Reviewing the numbers is an excellent way for management to be proactive and solve issues before they become serious problems.

Bill Schoeffler and Catherine Oak are partners at Oak & Associates. The firm specializes in financial and management consulting for independent insurance agents and brokers. They can be reached at (707) 935-6565, by e-mail at bill@oakandassociates.com, or visit www.oakandassociates.com

Topics Agencies