The Bottom Line Contribution of Satisfied Employees

Do you know what's most important to your employees when it comes to job satisfaction? Here's a quick, fun, way to find out.

Why does it matter to you whether or not your employees are 'satisfied?' You just want them to do their jobs. You don't care if they like it or not. Right? Well, you should care. It matters to your bottom line.

Your employees -- producers, customer service representatives, marketing staff, assistants and clerks, accounting staff, and your receptionist --all contribute to the bottom line in very tangible ways. They help you find new customers and keep the ones you have. Knowledgeable, personable and satisfied employees are a very real asset. When you fail to nurture and protect this asset, the cost is high . . . perhaps higher than you realize. 

If employees aren’t given the right tools to do their jobs effectively, for example, or if they’re treated unfairly or are overworked and stressed out, they can become frustrated and unhappy. This has a negative impact on their productivity. 

More importantly, disgruntled employees can be disruptive to the entire organization, sharing their discontent with whomever will listen. Their attitude rubs off on others and brings the morale of the entire organization down. 

Low morale also takes its toll as your staff attempts to provide customer service. You can hear it in their voices. It shows in their attitude. A demoralized staff does not focus on looking for ways to delight your customer. Nor do they attempt to cross-sell accounts or upgrade coverages. 

There’s also a compounding effect. Studies have shown that increasing client retention by just 5 percent can boost an agency’s profitability by 50 to 100 percent or more. But the reverse is also true. Dissatisfied employees can cause retention to drop significantly. Lower retention equates to dramatically lower profits.

Last, but not least, when morale drops, turnover goes up, causing costs to go up dramatically as well.

And by the way... Take the quick management survey and see the number one satisfaction criteria for employees. That's the point of the last blog post. If you missed it, go here.

Share Your Vision

Times are tough. To achieve the best results, everyone on your team has to be working together. But they can't read your mind. It's up to you to make sure that all employees know what your plan is and how they fit into it.

For sustained performance, you need employees that are committed to your vision, not just hunkered down doing what's required to get by. For this you need 'shared vision.' To commit to your success, employees must be able to commit to their own success. Creating a shared vision is all about understanding that people do things for their own reasons. 
Read more about sharing your vision here.

Planning to Plan

How about some different perspective on the whole broad subject of planning?

For those of you who are less than enthusiastic about planning, you might relate to Mike Tyson, the boxer.  He said, "Everyone has a plan - until they get punched in the face."

I think that's exactly why Dwight Eisenhower said, "Plans are worthless, but planning is everything."   He went on to explain this seeming contradiction. "There is a very great distinction because when you are planning for an emergency you must start with this one thing: the very definition of 'emergency' is that it is unexpected, therefore it is not going to happen the way you are planning." What are you expecting if you are going in to a fight with Mike Tyson?

This from Tom Landry: "Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with that plan."

Another football coach, Bear Bryant, said, "Have a plan. ...a plan for everything. A plan for practice, a plan for the game. A plan for being ahead, and a plan for being behind 20-0 at half, with your quarterback hurt and the phones dead, with it raining cats and dogs and no rain gear because the equipment man left it at home."

Bryant also said, "Follow the plan, and you'll be surprised how successful you can be. Most people don't have a plan. That's why it's easy to beat most folks."

And, finally, this from Henry David Thoreau. "In the long run, men hit only what they aim at. Therefore, though they should fail immediately, they had netter aim at something high." 

Do you have a solid plan for coming year and beyond? Let's have a conversation.

Planning to Succeed

Let’s talk about what’s keeping you up at night.

“We’re going into the fourth quarter and we’re not achieving any of the goals we set at the beginning of the year. Our plan was worthless. In this market and this economy, what good is planning anyway?”

This quote is fairly representative of what I'm hearing from many agents. There are really two parts to this question. First, when you plan, your efforts are never wasted. No plan, no matter how well it is developed, will ever work out exactly as conceived – even in a stable economy and a hard market. President Dwight Eisenhower said that plans are useless but that planning is everything. The planning process prepares you to meet challenges and find opportunities when things change. And things always change.

The hidden question here is what can you do when you’re not achieving your goals. It’s time to look at your plan again. It’s not too late to make adjustments to both your expectations and your results.

Identify two things you can do for rest of the year that will have a positive effect on your results. And do them!

If you need help with your planning or your results, let's talk. No strings and no charge. Call me or send an email.

Planning to Succeed

In spite of a tough economy and continued soft pricing, Investors Service Industry Scorecard reported that property/casualty insurance brokers were profitable in 2009. Further, those same brokers have maintained profitability into 2010, again, in spite of marginal or even negative organic growth.  How about your agency? Did you plan for a tough year? Are you exceeding your expectations, or struggling to stay even. As we move into the fourth quarter, are you clear about where you are and where you want to be?

Often, people fail because they lack the persistence to create new plans when plans fail. Your Strategic Plan should always be in a state of evaluation and adjustment. It’s not too late to make this a successful year. And 2011 is just around the corner.

Read our most recent newsletter on Strategic Planning here.

Momentum Matters

Saturday we watched the Marshall University Thundering Herd get beat in overtime by West Virginia. I'm not the football aficionado in the family but even I got caught up in the emotion of this game where the underdog (Marshall) led by 15 points until the last seven minutes of the fourth quarter. The announcers made much of the history of the Marshall team and the "100-year rivalry" with West Virginia. You may remember the 2006 movie "We Are Marshall" about the tragic loss of the entire Marshall team in a 1970 plane crash. But the reality is that no one really expected anything but a win for West Virginia.


What struck me as I watched the game turn around was how dramatically the momentum changed. The Mountaineers quarterback did a great job rallying his team in the fourth quarter but what seemed even more important to the outcome was the fact that the Herd got defensively timid. By the time the regulation clock ran out, Marshall had allowed the West Virginia to score twice and then couldn't score in overtime.


But this isn't just about football. What happened to Marshall happens in business, too. It's very easy to lose momentum - and it's not so easy to get it back. Getting your team on a winning streak takes work. Keeping your team pumped up and scoring takes constant attention. And if there's a shift in the marketplace and the competition appears to gain the momentum, what are you doing to get it back? Well, for certain, that's not the time to get defensive. It's just the time to get back on offense. Those businesses that are struggling to maintain momentum in this economy are the ones who are not playing offense. Now is definitely the time to keep your eye on the ball.


With the uncertainty about future revenue, I've seen a number of businesses pull back on their marketing efforts in an attempt to save money. This may be just the wrong thing to do if you want to maintain the momentum. And successful businesses are taking advantage of the defensiveness of their competition to gain momentum.


Are you playing offense or defense? And how's it working for you?

Producer Compensation – Profitability Drivers

“I’m paying producers too much and it’s causing a problem with bottom line profitability.” Well, maybe. Sometimes it’s not just simply the percentage of commission going to the producer. Sometimes there are other factors that impact profitability.

Part of our Producers as Profit Centers tool looks at servicing costs for each producer book of business. You should expect to see some disparity, especially where CSRs are assigned to business based on producer. Since producer books vary in size, so with CSR books. If those disparities are too great, however, you may need to look at realigning teams to even out the workload. Everyone hurts when some are overworked and some don’t have enough to do.

Sometimes the workload disparity is magnified when there is a big difference in average account size. Account size is probably the most significant of the productivity drivers. Where producers have books made up of mostly small accounts, not only will the book likely be unprofitable but the servicing costs are likely to be high unless a conscious effort is made to treat these accounts differently.

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