For the Manager: Why try to develop producers?

Do you ever get the feeling that trying to successfully develop producers is like banging your head against a brick wall? Many agency owners wonder how many times they have to spend $100,000, $150,000 or even $250,000 on producers that never make it before owners find ones that do. With the industry success rate of developing a producer at around 20 percent, why deal with the turmoil and problems a poor producer creates?

Many agency owners are familiar with this frustration. They redily understand the stress and toil a new producer takes on as an agency owner. To break this endless cycle of trying and failing, agency owners have only two other options: Give it up or do it right.

Give it up
Giving up may go against a sense of propriety, but it is a perfectly legitimate strategy. In business, some strategies just do not work because the time, skills, money or tools are unavailable. In those situations, the reality “is what it is,” and giving up makes plenty of sense. If the appropriate resources are missing, it does not matter if someone gives 100 percent. Without the necessary resources, he or she will still not succeed. The better strategy is to focus on goals that fit the specific skills, resources and tools that are available. Most agency owners seem to believe they should be developing producers, which is great if the tools, abilities and resources are available. If the agency does not have those ingredients, then no amount of effort is going to achieve success. I find agency owners are much calmer, happier–and often wealthier –when they quit fooling themselves about trying to develop producers if they will not or cannot do it right. Do it right The other end of the spectrum is to commit to doing it right. Agents who choose this path also seem calmer, happier and wealthier. However, this option requires a huge commitment. The following is a brief summary of the four key ingredients to doing it right. 1 Proper pre-employment testing: Choose a test that determines whether the person can ask for the sale, period. Although the “nice guy” stuff is okay, it is meaningless when it comes to making sales. 2 Proper training: We now have some of the best producer training programs ever available in the industry, and these programs are a great place to start. These programs alone, however, are not enough. Too many owners send new producers off to a training program, and that's where training ends. Successful training is an ongoing process. New producers usually require training for a minimum
of 2 years. “Once-and-done” is simply not enough. 3 The three Ms of mentor, monitor and manage: Successful producer development requires agency owners to commit to mentoring, monitoring and managing new producers. Rare is the agency owner who got into this business dreaming of the three Ms, but the three Ms are absolutely critical for developing new producers. Sure, there are producers who can succeed without the three Ms, but those producers are generally members of the 20 percent success rate. Can you bet your future on those kinds of odds? Study after study has shown that new producers do better with a mentor. A mentor is not a boss, nor a trainer. A mentor provides technical guidance and is a resource for professional growth. A mentor helps monitor the producer by assisting him or her with setting and accomplishing specific goals. A mentor also provides timely and helpful feedback. Managing is the biggest part of the commitment and in most agencies, managing new producer development is an area in which management exerts the least effort.

For successful producer development, someone capable of managing producers must be put in charge. That person must actively manage the entire process and hold the producer accountable for achieving specific goals. Equally important, the manager also must be held accountable for the successful development of each producer.

If an agency does not already have a person capable of managing new producers, bringing in an outside sales mentor/manager can be a very successful strategy. Even if an agency does everything else correctly, if management does not put someone in charge and that person is not capable of doing the job, any success will be mostly luck. 4 Owner execution plan: One of the major problems with “doing it right” is that doing it right is a long-term process requiring a long-term commitment. The hard costs are spread out over time and much of the cost is ambiguous. The rewards, too, are distant because a new producer is not going to generate significant returns for at least a year or two. After the initial excitement wears off, it is easy lose the commitment and urgency for doing it right. The key to staying committed is to create an execution plan that establishes immediate accountability and rewards for the agency owner. If an agency has partners, an execution plan is much easier to implement. This is because the owners can monitor each other's successes and failures and hold each other accountable. Single owners have it tougher because they have no partner pressure and they have no one to whom they
must answer. The outside mentor/manager mentioned above may help in these situations, but even the best outside person is rarely the complete solution. The agency owners still have to be intimately involved, and the only way that happens is if he or she has his or her own outside advisors or peer groups holding them accountable, or they personally have put some “skin in the game.” Some examples of this include owners who commit to paying $5,000 to a charity if they are not 100 percent compliant with the execution plan every 6 months, or pledge $20,000 to a charity if they fail to successfully develop a new producer after 24 months. You might be wondering why an owner would have to put up a bond like this when they already are investing $150,000 in the hiring and development of a new producer. The problem is the length of time it takes to develop a producer. People need immediate rewards–or they need to avoid immediate pain–to stay engaged in this lengthy process. I have found that when such plans are created with agency owners, rather than trying to depend on self-discipline, which is most often the case, the success rate for new producers
climbs exponentially. Both strategies–giving it up and doing it right–are legitimate strategies, and agency owners following either strategy are more successful than those in the middle. The middle strategy is a great way to ensure immense frustration and financial loss. Choose to either give it up or do it right and you will sleep better and make more money.

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