But even if you don’t have a written plan, the most important requirement to ensure your business thrives is strategic perspective – a strategic view.
It’s more than a sales plan or a budget. In fact, you need a strategic view to ensure than your sales plan and your budget will take you where you want to go. A strategic view ensures that you solve problems so they stay solved. A strategic view increases the chances that changes you want to make, get made and stay made. Solving problems without a strategic view is like rearranging the deck chairs on the Titanic. Making changes without a strategic view is like whacking away at those individual alligators with no thought to draining the swamp.
The first and last imperative is a view of your business that is strategic, even while you are managing all the everyday issues and problems that require immediate attention.
Your next duty to your business is to be accountable, and to hold others accountable as well.
As a business owner, you’re accountable to your customers, of course, but also, your employees, your carriers, your vendors, your community. The list is long. And while it may go without saying that the buck stops at the top, what does that really mean? Does it mean that you must make every decision, every time? Must you solve every problem personally? Do you reap all the benefits, and suffer all the pain?
Accountability is about setting standards, creating the environment where they can be met and then insisting that they are met. Accountability requires measuring results and recognizing those who achieve them, and those who don’t.
Everyone wins – you, your employees, your customers - when everyone in your organization, owns their own job. For a thriving business, accountability is a strategic imperative.
Your next duty to your business is to ensure your competitive advantage in a marketplace where the consumer thinks of insurance is a necessary evil or, worse, a commodity like soap powder or breakfast cereal.
Your competitive advantage is what you do better than anyone else. Maybe it’s special services or access to special markets or in-depth knowledge of a specific niche. Whatever it is, it’s special and it’s definable. When you – and everyone in your organization – can talk convincingly about why customers should buy from you instead of the insurance agent down the street, or the direct writer on line, then you have something extraordinary. And that’s what it takes to stand out from the crowd.
For a thriving business, competitive advantage is a strategic imperative.
You have a duty to ensure that your business functions effectively.
Not just efficient or productive but effective as both a sales machine and as a service to your customers. Building and maintaining an excellent organization is not just what your org chart looks like, but how well you function as a team to deliver on all your promises. It’s about the people and the business infrastructure that supports them. Excellence makes you a business where the best people want to work and that has a compounding effect.
In a world of on-line sales and outsourced customer service, organizational excellence gives you a competitive advantage and, for your business to thrive, it is a strategic imperative.
You also have a duty to grow your business. But growth for its own sake may not take you where you want to go and uncontrolled growth can cause more problems than it solves. You have a duty to continuously improve every aspect of your business.
The Japanese have a word for it, kaizen, meaning “change for the better,” always looking for ways to make processes better, more customer friendly, more productive. It’s not about procedural audits or manuals, though. It’s also not about change for the sake of change.
It’s cultural. It involves everyone from the CEO to the part-timers who sort the mail. It means welcoming – encouraging – everyone to look for ways to improve their jobs and the jobs of those around them. Not so everyone feels better but so that the business thrives and grows profitably.
Continuous improvement is a strategic imperative.
A business must show a profit in order to survive. Right? Well yes, except … or unless…. Privately held businesses don’t always measure profit in absolute, quarter-by-quarter terms. Whether you’re buying or selling or maintaining a lifestyle or building a legacy, you have a duty to ensure the value of the business.
Business value is more than just a matter of income and expenses. The financial strength that results in a profitable income stream depends in part upon intangibles that are the intrinsic value of your agency - your culture, the professionalism of your organization and the management of the business.
Make no mistake. Value is a function of earnings. So pay close attention to revenue and expenses. Measure the profitability of each department and each producer. Keep a close eye on cash flow. But focus on business value, in the context of your strategic vision and goals, as the real indicator of success.
Business value, as well as profit, is a strategic imperative.
For as business that thrives in the New Year, consider the strategic imperative. First, last and always, a strategic view to keep you focused on the important things and help you deal effectively with the urgent things. Then, accountability, competitive advantage, organizational excellence and a commitment to continuous improvement. With these you build business value as well as profit, and thrive. You keep the alligators from breeding and you sleep better at night.
If you need help with any or all of the strategic imperatives, let’s have a conversation. Call or email firstname.lastname@example.org. Visit our website www.transformationadvisors.com.
In future articles we’ll talk about some of the general and specific issues that keep you up at night. In the meantime, visit our blogs and join the conversation. Tell us what’s keeping you up at night.
Strategic Management for Independent Insurance Agents & Brokers: http://www.transformationadvisors.blogspot.com
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