EARLY in my insurance career, my company sent me to its Deming Management Program in Chicago. I greatly admired Dr. W. Edwards Deming and had studied his teachings. Knowing my company could improve by using his methods, I was disappointed when the speaker's first words were, "Dr. Deming does not believe in goals and numbers." This was a misinterpretation of Deming's teachings.

Employees need concrete goals, but Deming believed that focusing only on the end goal is inadequate--even destructive. He felt a company should measure the entire process. By managing incremental progress and adjusting as necessary, a firm increases its odds of achieving its ultimate goal.

Deming's model can be applied to agencies. Most set annual sales goals for their producers, but is that sufficient to ensure a producer's success--or the agency's? Deming would argue that it is not. Agencies should help employees achieve their goals, and measure each aspect of the sales process.

Consider the following components of an agency's process:
oProcedures. Many producers work below 100% of their capacity because their agencies lack procedures and systems to ensure compliance. Agency staff is less efficient and has less time to help producers place business

oTraining. Few producers know coverages well enough to forgo technical training, and most don't have enough sales training to maximize their results. Many get no sales training at all. How much is poor or inadequate training costing your agency?

New producers--especially those hired on a draw--often fare worst. Too often they are offered no training or mentoring. At most, their supervisors may review some arbitrary year-end goals with them. This is unfair. These producers may waste up to two years struggling to succeed, while a lack of support makes success virtually impossible--and the agency could waste $100,000 to $300,000 in the process.

oNew production support. Without prospects, producers can't make sales. Why not measure prospect pipelines as well as sales to ensure producers have enough qualified people to call?

Here are some ways to measure production compliance:
1. Measure prospects and "centers of influence" by producer each month. (Measure by industry and account size).

2. Measure hit ratios and retention by producer each month (measure by industry and account size).

3. Measure procedural compliance and sales training progress by producer each month.

4. Measure technical education by producer.

Deming taught that a company's entire process must be designed to support the end result and be continually monitored to ensure it is working. Analyze your current production system. Identify areas in which progress can be measured, especially that of new producers. Your employees will thrive and your agency will prosper.

I work with several agencies that have adopted Deming's methods and their results are remarkable. I assure you that if you don't begin to think like Deming, your competitors will.

Chris Burand is president of Burand & Associates LLC, an agency consulting firm. Readers may contact Chris at (719) 485-3868 or by e-mail at [email protected].