Every Agency Can Measure and Maximize Its Performance

Clear Roles, Documentation, Communication Among Lessons Shared By Consultants for High-Performing Agencies

Use your agency management system to the max. Measure your productivity. Communicate consistently and effectively with your staff, customers and carriers. And above all, don’t get cheap when it comes to the training.

Do those tactics sound familiar?

Hopefully they do, as they are aimed at improving an organization’s bottom line and should be included in any high-performing agency’s management “bible,” according to a duo of consultants who work with agencies to improve operational processes and profitability.

There’s a lot of redundancy out there, said Texas-based Pat Alexander, an independent consultant who works on agency management systems. “I have to tell you any time I go through an agency no matter at what level it is performing, I can find how that agency is not using its system to its maximum capabilities,” Alexander said. “Maximum operational performance leads to the improved bottom-line.”

How does an agency achieve operational efficiency?

Clearly Defined Roles

“One of the first things you have to do is define the roles in an agency,” Alexander said. According to Alexander, the four basic roles are production, service, processing and financial. Some agencies also have a marketing department and others may have specialty departments based on their niches.

Missed deadlines, finger-pointing and lackadaisical attitudes can all be avoided by clearly defining roles, making sure people know who is responsible for what and insisting upon accountability, she said.

It’s a big job to refine an agency’s processes, Alexander said. The best way to achieve success, then, is by doing one thing at a time. “Figure out what that one thing is, get it. Then take the next thing, get it,” she advised.

“Enter data once and use it as many times as possible,” Alexander said, acknowledging that achieving this with some agency management systems can be tricky. However, systems are improving and agencies should assess how they can put those improvements to use.

“Unless you use your systems to their fullest, you have no way of measuring productivity with your staff,” Alexander said. Because an agency can only manage what it measures, management must determine how it will measure the productivity of its agency and be “ever vigilant in assessing needs, usage and performance.”

New Systems Training

An agency can’t successfully monitor its performance unless its staff and work processes are defined and employees are trained. While staff may have been trained at one time on the management and operating systems, but as things change, they need new training and a new understanding of what’s expected. “You have to implement it. You have to be very firm and say, ‘from this day forward we are going to do this new process.’ Until [employees] hear that and they see that in writing, they’re in denial. Then you have to monitor. I’ve seen agencies go from total chaos to very well run organizations with these processes.”

When resources are low, Alexander said many agencies are reluctant to devote the time and effort to streamline operational procedures. However, while sales is important, “you can’t support sales unless you have the back office to do that. … I find that my most successful clients take that step when they can least afford to.”

The Trinity

Eric Moberg, an agency errors and omissions risk management consultant based in North Carolina, agrees that efficiency is extremely important now. Bolstering sales is one way to work out of the soft market, he said, “but if you don’t lean your back office, you don’t lean your process and you don’t measure it very carefully, your sales results are a not necessarily going to achieve [the] bottom-line that you’re looking for.”

Moberg’s approach to E&O risk management uses what he calls a “trinity” of communication, documentation and consistency. This trinity, he said, can be applied to most everything an agency does and in every relationship it has.

Within each part of that trinity, Moberg suggested agency owners and managers ask themselves some basic questions:

• Communication. How do you communicate with your staff? How do you communicate with your brokers? How do you communicate with your carriers? Are you satisfied with the communication that you have? Are you using the best technology for that communication? If you are using imaging, are you using it the best way it can be used? Are you storing data multiple times?
• Documentation. How do you document files? How do you document communications? Can you project yourself out three years down the road, and if you had to defend yourself in court on a case, would the documentation be adequate to do that? Does staff understand this?
• Consistency. Does everybody do it the same way all the time? Are they prepared to be trained and take the time to make sure that they understand this?

The key to implementing consistent communication and documentation is training. “Training is like breathing, it’s something you never want to stop doing. … You have to put the investment in to train your staff on how to do this. … Training becomes a critical aspect of everything that you do in the agency,” he said.

Review Workflow

Like Alexander, Moberg recommended agencies take time to review their workflow. “Put teams together to look at your existing work flow. How are you doing it today? Is it the best way? Look at your procedures. Are they well-documented? Are they accurate? Or is that procedures manual you spent oodles of time working on four years ago sitting on a shelf somewhere that no one looks at? Is it relevant to what you’re doing today?”

One test of an agency’s level of communication, documentation and consistency, he said, is to what extent someone who sits at an agency principal’s desk or staff member’s desk is able to look at what’s there, take over and go forward with the work.

E&O Essentials

While consistency and efficient use of data management systems can be enhance profitability, they are essential when it comes to E&O claims. Courts, Moberg said, are holding admissibility of evidence to the highest level of technology. Therefore, it is imperative that an agency analyze its processes and how it interacts with the organization.

Finally, Moberg said, it really is about the bottom-line. Streamlining an agency will enhance its ability to sell. “Agencies and brokers exist to distribute the product for the carriers. That’s the simplest way to [put it],” he said. “Are you doing everything to optimize that with workflow?”

Editor’s Note: This article was based on a presentation at the Target Markets Program Administrators Association Eighth Annual Summit in Tempe, Ariz., in October 2008.

Topics Agencies Tech Training Development