Strategic Planning Tips: Why Strategize?

Plenty of Agencies Have Succeeded Without Any Real Strategy, So Why Bother?

It’s a question of potential. Without strategic planning, what is being left on the table? What opportunities are being missed? Can pure optimism and raw skill generate thriving agencies in the midst of the softest market in insurance history? I really don’t think so. So assuming your agency wants to truly thrive, consider these basic ground rules for strategic planning.

The Dos and Don’ts

1. NEVER do strategic planning unless the agency owner has personal accountability.

A great way to make the situation worse rather than better through strategic planning is for the leader to delegate jobs, responsibility, and accountability to everyone but themselves. Even if the owner does take on jobs and even responsibility, when you own the business, how do you show accountability? Employees don’t get a bonus or maybe they get demoted or fired. What happens if the agency owner fails? How is he or she held accountable? There has to be a tangible method for holding the owner accountable to their partners and/or employees for strategic planning to work in most agencies. Examples include paying large “fines” to charities along with public acceptance of failures followed by (hopefully) proof the owner will work harder.

2. NEVER do strategic planning if the agency owner has to be the winner and key developer of ideas.

A real leader is a person that develops other peoples’ skills. This will never happen if the leader has to take credit for everything. This problem most often shows up in goal setting. In the book “Winning Ways,” the author Bo Schembechler described a great example of this. He noted how he has watched so many company executives follow him on the stage after a speech to announce to their employees all the goals for the upcoming year and somehow expect those employees will actually buy into the goals. As he states, this is a ridiculous assumption. If employees do not build the goals, they won’t buy into the goals. And if they don’t buy into the goals, the odds of achieving those goals are minimized.

Additionally, when an agency owner simply announces the agency’s goals, these become unquestionable goals. No matter how unrealistic or even how damaging a goal may be employees are not going to question it. I see this often with revenue per person goals. There are a lot of ways to achieve higher revenue per person while losing money. But if the agency owners state some revenue per person goal, that’s the goal their people will try to achieve regardless of the harm done.

3. DO have a plan for the strategy session.

I have witnessed strategy sessions that were treated as brainstorming sessions. Don’t confuse the two. A strategy session has an agenda and goals (for the session, not the company) preplanned. In other words, the goal of a strategy session may be to develop a plan to increase sales by marketing, current producers, new producers, target marketing, or others with each getting an hour allotment of time. But leave it to the group to develop reasonable growth goals and budget goals for each category.

4. DO include people who have the knowledge, skill and position to participate.

5. NEVER do strategic planning in your own office.

The office is the owner’s castle. No matter how hard people try, the owner thinks like an owner in their own castle and the employees think like subjects in that castle. Go to a neutral ground where everyone will think with less bias.

6. DO complete a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis first and share this with all participants.

Consider whether an outside person would be beneficial in conducting this SWOT analysis because they may be better able to see the forest for the trees. Additionally, the third-party should have the analytical skills, experience, neutrality, and focus to do this job better simply because it is their job to do it well. Additionally, they should not have the distractions that every internal person will have.

7. NEVER do strategic planning without completely open communication.

I really cannot overemphasize this point. If the agency has a team of people to help create a strategy, but those people do not know the agency’s strengths, weaknesses, opportunities and threats and are not going to be permitted to know some of these key factors, how are they supposed to offer smart ideas? Even if they are not directly told their ideas are not practical or acceptable (because the owner knows something they don’t), they will become dispirited when they do not see their suggestions acted upon.

Moreover, they’re going to know key information is being withheld and this leads to an environment of mistrust (definitely not open communication). And if the employees feel they are not trusted, they are right to believe the strategy session should not be taken seriously. It’s really a joke.

If information must be limited, then limit the point of the strategy session to a topic in which complete information can be shared.

8. DO create a Strategability Plan (Strategic Plan with Accountability).

Build this plan upon your strengths, minimizing or overcoming your weaknesses, realizing your opportunities, and building defenses against the threats. This may sound like a lot, but often a good offense creates a good defense and vice versa, so it is not as difficult as it may seem.

As part of this plan, list your goals, who is accountable for achieving those goals, the reward for achieving the goal, and the consequences of failing to achieve the goal. It makes no sense to have a plan that only incorporates rewards, unless the agency owner or leader is willing to take 100 percent responsibility for everyone else’s failures and inadequacies. If your leadership is that strong, then a plan that only incorporates carrots will work just fine.

Strategic planning today is more important than ever because times are tougher now than ever before. Those agencies that combine strategic planning and complete owner accountability are riding these tough times higher than everyone else. Is it time for you to follow their lead?